T

he Australian government is wrapping up a two- year experiment in regional economic development that might be of interest to areas facing plant closures and the sudden availability of hundreds or thousands of formerly employed workers. Mitsubishi Motors Corp. announced in May 2004 that it would cease engine production at one plant near Adelaide, South Australia, and downsize at another in Tonsley Park, also near Adelaide. The move was part of a global restructuring effort at the Japanese automotive concern that to the greater Adelaide economy meant the potential loss of up to 2,300 jobs.
   "Our modeling indicates that the flow on job losses of around 1,600 from the closure of Lonsdale are likely to be concentrated in motor vehicles components and other manufacturing (430 jobs), property and business services (430) and trade (370) sectors of the economy," noted John Spoehr, executive director of the Centre for Labour Research at the University of Adelaide at the time. "Past experience suggests that it will be difficult for those who lose their jobs to find alternative employment. It will be essential to provide Mitsubishi workers with a significant package of assistance that includes support for retraining."
   Within days of Mitsubishi's announcement, the federal Australian government and South Australia came forward with a A$50- million (US$37- million) structural adjustment package consisting of labor market program assistance for displaced workers and new investment in job opportunities in the area. The bulk of the assistance – US$33.2 million – was the Structural Adjustment Fund for South Australia (SAFSA). Applications for SAFSA grants were due June 30, 2006, and all funds were to be disbursed by June 30, 2007.
   Companies could apply for SAFSA funds with which to invest in the region if the object of their proposals met certain criteria, including: ability to bring about sustainable new employment, additional investment by other industries or suppliers and non- duplication of existing production capacity; long- term viability without subsidy; consistency with South Australia's competitive advantages and strategic economic priorities; and others. Ideally, funded projects would be in Adelaide's southern suburbs, which were most adversely affected by the job cuts.
   At press time, eight project proposals had been approved, and several others were under consideration at the federal and state levels. The projects now completed or in the build phase (with investment figures in US$) are:
   Fibre Logic Pty Ltd. Received $4.4 million towards its $15.5- million investment to establish a continuous glass reinforced pipe manufacturing operation. The project was slated to create 126 jobs and help meet demand for new and replacement water transportation systems. Construction of the new facility is taking place on the Mitsubishi premises.
   Cubic Pacific was awarded $702,000 for the addition of a plastic- printing system at its new $7.4- million facility in Edinburgh Park.
   Resourceco Pty Ltd. is using 2.2 million in SAFSA funds towards its $7.4- million project to expand its range of resource recovery, recycling and crushing services at operations north of Adelaide and at a new waste transfer and sorting facility at Lonsdale.
   Alloy Technologies will put $1.3 million of the grant money toward a $5- million project to develop a state- of- the- art light metals foundry in Adelaide. The foundry's finished products will be used in the defense, automotive and telecommunications sectors. About 30 jobs will be created at first with

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more forecast as demand for the products ramps up.
   Redarc Electronics received $1.4 million for a $3- million expansion of its electronics business. The company makes power and voltage management products for use in the automotive, agricultural, marine, defense, communications and mining sectors. Thirty- five new jobs are being created, with the potential for 30 more.
   Intercast & Forge Pty Ltd. is expanding its cast metals molding line at the Wingfield Cast Metals Precinct with $1.9 million in SAFSA funds. The whole project involves an investment of $14 million. The company supplies 55 percent of Australia's demand for ferrous casting products, primarily in the automotive and rail industries.
   PBR Australia Ltd. is expanding an operation at Lonsdale that makes automotive brake components for South Australia's car makers. This $13.5- million project will get $1.1 million in SAFSA assistance and will create 40 jobs at the former Mitsubishi plant.
   And Ingham Enterprises is putting $5.2 million of the grant money towards the cost of building a $75.4- million meat- processing facility that will create 250 jobs.    Toyota's lean manufacturing practices are as relevant today as they were when first introduced decades ago. Among other places, they now are being applied in a practical way in New Zealand, thanks to a program introduced recently by New Zealand Trade and Enterprise that is modeled on Toyota's plan, which is based on a notion of continual improvement known as "kaizen."
   Companies already demonstrating a mastery of the kaizen concept and interest in its application to internal efficiency gains are Clearite Bathrooms, RPM International, Stainless Design and Auto Plastics.
   "We have been able to lift our throughput by 62 percent in one month and remain in full control of the process throughout," says John Cook, managing director at Stainless Design.
   Adds Clinton Yeats, New Zealand Trade and Enterprise's project manager, "This demonstrates a process whereby lean manufacturing practices can be successfully leveraged into the New Zealand manufacturing sector."