Geelong’s Industrial Transition: Cars to Wind Turbines

New research presented in Geelong today looks at how Denmark leads the way in industrial transition and opportunities for Australia.

Danish wind energy company Vestas is operating at the old Ford car factory site in Geelong, Victoria. This represents not just a change of industry but an opportunity to improve the way Australian regions manage industrial transition.

Key findings:

  • In October 2016 the Ford car factory in Geelong closed, causing the loss of 600 jobs.
  • In February 2019, Danish energy company Vestas signed a deal to establish a wind turbine assembly and testing venture in the old Ford car factory site
  • In Denmark, the Danish Government makes every effort to ensure that workers are able to find a job that is appropriate to them. During this transition process, workers have an adequate, steady income and access to necessary retraining. This is known as ‘flexicurity’ (flexible security)
  • Denmark spends nearly eight times as much as Australia does on active labour market programs, and Danish workers maintain an income of up to 93% of their previous income during the transition between jobs
  • In contrast, Australian unemployment payments are grossly inadequate and redundancy payments (though mandated under Federal law) are for a maximum of 16 weeks (for nine years of service). Temporary and casual workers receive even less support.

“Denmark dramatically dents the number of jobless mature-age workers by doing much more than Australia does to help displaced workers get new skills,” said Professor Andrew Scott, convenor of the Australia Institute’s Nordic Policy Centre.

“Denmark’s world leadership in retraining for new jobs means that the labour force participation rate for people aged 55 and over is more than 73% in Denmark whereas it is less than 67% in Australia

“To achieve Danish levels of workplace participation rates requires increased and better tailored investment in quality skills retraining, particularly in regions hard hit by job loss where workers aged in their 50s and older have been especially dislocated.

L-R next to the carbon fibre manufacturing line at Deakin University which is in a research collaboration with Danish company Vestas for stronger wind turbines for further renewable energy jobs: Mr Neville Gall, Senior Project Manager, Vestas; Mr Tom Nørring, Danish Ambassador; Professor Andrew Scott, Deakin University and Nordic Policy Centre; Ms Ebony Bennett, Deputy Director, The Australia Institute

According to the new ABS figures released last week, there are 2,566,600 people aged 55 and over in the Australian labour force (ABS, Labour Force, Australia, 14 November 2019, Table 22). If Australia could raise its participation to Danish rates, then more than one quarter of a million more Australians in this age group would enter the labour force.

“This would be both to their financial benefit and to Australia’s through the extra taxation revenue generated,” said Professor Scott.

“Geelong is one region to have experienced a significant dislocation of workers. This investment from Vestas highlights how Danish job ‘flexicurity’ in adapting to new jobs assembling wind turbines in the old Ford car manufacturing plant can help respond to this dislocation.

“Vestas is in a research collaboration with Deakin University to build stronger wind turbines as part of expanding for more jobs.”

On 22 November, leading advocates for jobs in the Geelong region including the Geelong Manufacturing Council, the Gordon Institute Skilling the Bay project and the G21 Alliance will participate in a regional jobs symposium held by Deakin University with The Australia Institute Nordic Policy Centre on how regions can achieve better job transitions learning from Denmark.

The Danish Ambassador to Australia, the Deakin University Deputy Vice-Chancellor (Research) and a senior executive of the Vestas corporation will also join the discussion and help shape the policy direction to follow.

Read the full report.

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