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Future tense into the wave of hope

Date

Clay Lucas

As Geelong's biggest factories prepare to close their doors, the city has already started to adapt.

Andy Leigh, 25, has recently opened Union St Wine in Geelong.

Andy Leigh, 25, has recently opened Union St Wine in Geelong. Photo: Pat Scala

Back in 1966, if you wanted to build a rowing boat, you used timber. Sykes Racing's first boat that year was made of it. Not long after, they started using fibreglass. Then kevlar. Now, it's carbon fibre.

The rowing boats – which have now been used to win four gold medals at Olympic regattas – start at $9000 and sell for up to $38,000 all around the world, but particularly in America and Japan.

It's only a medium-sized firm – 45 or so people, including highly skilled boat-builders – but within Sykes Racing is a story that might just foretell the future of Geelong.

Jane den Hollander, Deakin University: 'We need to be thinking, What are the new industries that will allow us to add value to the world?'

Jane den Hollander, Deakin University: 'We need to be thinking, What are the new industries that will allow us to add value to the world?' Photo: Pat Scala

"We have pushed the boundaries of materials because competitors want it to be as light as possible and as strong as possible," says managing director Jeff Lawrence, whose company is one of dozens in the region that are dwarfed by the corporate giants now pulling out of Geelong. "Manufacturing is definitely not dead in Australia," says Lawrence. "But it is on a grand scale."

Geelong is about to learn this lesson the hard way. There is little doubt that for thousands of mostly middle-aged and nearly retired men in Victoria's second-biggest city, it will be terrible. Many will probably never work again.

But, according to Lawrence and dozens of others in Geelong that The Sunday Age spoke to, on a boutique level and in a collaborative way, manufacturing in the region will survive. And, many say, will thrive.

Geelong will soon be hit by a tidal wave of job losses from the blue-collar industries that have been the region's backbone since the 1950s. Alcoa will shut its vast Point Henry aluminium smelter and rolling mills this year, with 1000 jobs going. Ford will stop manufacturing cars in two years, perhaps earlier, with at least 600 jobs going (though 1100 will stay at Ford's Broadmeadows design centre).

At Avalon airport, 300 Qantas maintenance jobs went in March. The month before, Shell confirmed it would sell its refinery on Corio Bay to Swiss-based oil trader Vitol, saving jobs for now but leaving lingering uncertainty.

Ford's departure, in particular, cannot be understated: almost 2.5 per cent of the town's 212,000 residents will ultimately lose their job either directly or indirectly, according to a report by Adelaide University and the National Institute of Economic and Industry Research. It found "around 5000 residents of the Greater Geelong area are projected to lose their job" once Ford goes. It also found the impact on gross regional product – the goods and services produced in an area – four years after Ford goes, will be $594 million a year, in the absence of any new investments.

But for all the bad news about manufacturing in Geelong, there is another, quieter story: that this city is, for the most part, doing well.

Most of the town's residents, after all, do not work in manufacturing. Barwon Health, the Education Department, Deakin University, the local council and Woolworths are all larger employers than Ford, which is Geelong's sixth-biggest jobs provider. Also among the top dozen employers are retailers Cotton On and Target. And the Transport Accident Commission, soon to be joined by the Victorian WorkCover Authority and the National Disability Insurance Scheme, have marked Geelong out as a regional centre offering secure white-collar jobs for locals.

This diverse array of employers is a relatively new phenomenon for a regional city like Geelong. Once such cities and towns had to specialise, and Geelong did that spectacularly well.

Set on Corio Bay, its harbour became Victoria's chief exit port for the wool off the sheep's back that was a key source of Australia's early wealth. Next came the gold rush in nearby Ballarat, spurring on Geelong. Then came large-scale manufacturing.

From the 1950s on, it allowed generations of blue-collar workers to thrive and move their families into the middle classes via oil refining at the Shell plant, aluminium smelting at Alcoa, or car making at Ford. Around these giants grew hundreds of small suppliers.

"We were bloody good at manufacturing, we catered for a massively growing Australia," says Deakin University vice-chancellor Jane den Hollander, whose university employs 2000 people in the Geelong region.

But she says the rise of Asia, in particular, has made staying in large-scale manufacturing near impossible. "It is very hard for a country of 23 million people to compete with cities that have that many people," she says.

The largesse of huge corporations and Geelong's relatively minor role in their global chains allowed cities like it to "take our eye off the innovation ball", says den Hollander.

Small companies all over Geelong, many of which have relied on Ford or Alcoa for work, are now planning quickly for a future without them. Some are certain to fail, so reliant are they on the big firms for work. But den Hollander says there are "some interesting green shoots emerging".

"We need to be thinking, 'What are the new industries that will allow us to add value to the world?' " she says.

The one company most people in Geelong point to as an example of this value-capture and natural competitive advantage is Carbon Revolution, a high-tech firm that makes ultra-light carbon fibre car wheels, mostly for export. It sells wheels to the US in particular, at a very competitive price against a high Australian dollar. Others point to growing cloud-based computing firm Sky Software, engineers Austeng, or olive oil maker Boundary Bend, as proof that there are good news stories emerging all over the Geelong region.

Geelong's natural advantages are clear, den Hollander says: proximity to water, an hour by car or train to Melbourne, and an airport at Avalon nearby. And it has plenty of space around it to grow. House prices, too, are affordable in a nation where capital city housing is among the world's most expensive; the median house price in March according to the Real Estate Institute of Victoria was $415,000 compared to the metropolitan Melbourne median of $652,000.

Den Hollander says the town has to carefully manage the many older people who have worked at Alcoa and Ford who will soon be out of work. "They are the lifeblood of the town [and they will now] transition to retirement or to another job which probably won't pay as well," she says. "But at the same time we have to encourage the younger ones, stimulate them to do things and make things to create wealth for their children."

Among these younger ones is Andy Leigh. Born and bred in Geelong, the 25-year-old recently opened Union St Wine, a boutique bar and liquor store. He is exactly the sort of young person who, a decade or so before now, would never have considered a life outside Melbourne after finishing his schooling.

"Probably I would have found a way to make [a bar] work in Melbourne, but it was Geelong I was more interested in," says Leigh, who was attracted by the cheap rent in the hollowed-out city centre, hit by the many retail developments that have opened on Geelong's fringes.

"[Central] Geelong is a bit of a ghost town so you can pick the shop you want and it is probably empty," says Leigh, who believes there is now a culture among people living there "who travel to Melbourne, drinking and eating". It has opened up opportunities for people like him. Leigh says the idea Geelong is on the cusp of a crisis is not the reality people like him are living. "There are a lot of really inspired young people; you can feel it when they come in here."

A visit to the recently opened Little Creatures brewery and restaurant provides some proof of what Leigh is saying – constantly full of Geelong hipsters and families, the sprawling complex is booming. "It is like that all the time," says Leigh. "If someone else did that, it would fill as well."

Asked how the old Geelong, of manufacturing and blue-collar work, fits with this emerging new city, Leigh's answer is simple: "It doesn't. Manufacturing doesn't fit, not just in Geelong but to a degree in Australia any more. If manufacturing is the industry that this town relies on, then naturally it's all doom and gloom. But the new Geelong, it won't have these big working factories."

Cheerleader-in-chief for the sort of reinvention of Geelong that Leigh is talking about is Darryn Lyons, mayor since November. Since being elected, Lyons' grandiose proposals have been big on pizazz, but sometimes short on detail. Like his plan for an "iconic Christmas installation" – a floating tree in Corio Bay.

Lyons, who rose to fame running an international paparazzi photo business, has also called repeatedly for a new pier to be built on the waterfront at Yarra Street, so cruise ships can dock and local food suppliers can get rich selling them produce.

"My strategy has always been to get all that provisioning into the future of the cruise ships," he says, predicting this would bring in revenue to the town of between $800,000 and $1 million a day.

"To go on an 18-day cruise you need, you know, 500,000 chickens or whatever that number is I don't know specifically. But we're really [well] placed with our agricultural fruit and veg area here. And the Bellarine and Otway sausages. Eggs, chicken, beef, wagyu – we've got everything."

But, Lyons says, the new focus for the town means that parts of the old Geelong, which supported many families with reliable wages and good jobs for decades, will soon not exist.

"This mayor has recognised the need and ability to change – we need to diversify," Lyons says, referring to himself in the third person. "Certain aspects of manufacturing are going to be behind us."

But "not all manufacturing", he is quick to say, also pointing to the region's growing carbon fibre industry, which he predicts will outgrow cars or aluminium.

Lyons says the media have focused too much on "the old Geelong" of Ford and Alcoa. "The media love the story [that] Alcoa are going. Focusing on Alcoa I understand, because it is such an iconic dinosaur of metal-work and of manufacturing."

But the "new, smart, 21st-century tourism city and smart manufacturing hubs don't correlate with Alcoa jobs," says Lyons, noting that he has friends who work at Point Henry, who are "actually happy in a lot of ways to turn over a new leaf".

Brett Noonan, it is safe to say, is not among Lyons' cohort of happy, soon to be redundant, Alcoa workers. Noonan, known universally as Jabba, says all this talk of a "new Geelong" is a joke, and that the downturn that is about to hit the city is going to shock locals. "People have got no idea what's coming. No idea."

Noonan ridicules Lyons' idea of cruise ships being any sort of answer to the town's coming economic crisis. "Cruise ships are going to create jobs? What a load of bullshit. Or they want me to re-train – what am I going to re-train as, a f**king barista?"

Even if Lyons is overhyping Geelong's post-manufacturing future, he and others also know that with a state election looming and both the Coalition and Labor desperate to win the marginal seats of Geelong, South Barwon and Bellarine, the city is poised to get some major handouts.

The key scheme established to help Geelong recover from the departure of thousands of jobs is the Geelong Region Innovation and Investment Fund, announced last May by then prime minister Julia Gillard after Ford said it would stop making cars in Australia. Designed to attract new manufacturing jobs, it has given grants to four companies so far, with an announcement on a fifth grant due soon.

Elaine Carbines is a former Victorian MP and now the chief executive of G21, one of several groups that have emerged to push for more public funding for the region. "We are facing very challenging times," says Carbines, "but we've expected them for some time, and we've been working on how we transform our economy." She says there has been frustration at how slowly funding announcements are coming from the innovation fund. "And we don't think $24.5 million is enough."

Carbines says the November state election means announcements will start to be made more frequently soon. "We would expect to get more than a few crumbs," she says.

The coming widespread job losses won't be the first time Geelong has gone through dramatic financial upheaval. In the winter of 1990, Australia's second-biggest building society, Pyramid, collapsed, costing many Geelong residents their savings. It was a precursor to a recession that gripped the nation from 1991, and towns such as Geelong were hit hardest because Victoria was the manufacturing hub of the nation.

But a crisis like that gives a town's leaders a special type of resilience. Locally based charity Give Where You Live chief executive Bill Mithen says the Pyramid years toughened up what was already a tough town. "One thing that Geelong has built in the last two decades is a really strong resilience," says Mithen.

Mithen says the arrival of public service employers such as the Transport Accident Commission and others have meant there are now "quite a large number of jobs that mean young people will be able to go to school, go to university, and then go into a job in this city. That is a fantastic thing to have happened."

 

A new calling

Brett

Among the Ford workers to have used the car maker's imminent departure as a launching point for the career he always really wanted is Luke McSeveny, of Lara. Married with two children under three, the 31-year-old engineer spent eight years at Ford's engine plant bringing automation to the production line.

McSeveny departed in February and is now studying theology to become a Presbyterian minister.

He says that when Ford closes in 2016, many production line workers who have only very specific car-making skills - ''the type of jobs they are used to is all about just their physical body achieving an outcome repetitively'' - will have ''significant challenges''.

''They will have to leave the region or just do whatever they can get their hands on,'' he says.

Most will be facing casual, insecure work. And for those who do find full-time jobs ''it will be a lot less money'' than the average $50,000 most took home.

Geelong cruising for a bruising

Brett

Brett Noonan, known as Jabba, says Mayor Darryn Lyons' vision for a cruise ship-led recovery for Geelong is rubbish.

The soon-to-be-unemployed Alcoa worker says many in Geelong haven't cottoned on to the disastrous effects on the city of losing hundreds of well-paid jobs (many Alcoa workers clear $80,000 because of shift work and the extreme nature of many of their roles). ''Give it six or 12 months, when there are 4000 or 5000 people with no jobs, who had high-end jobs, not shit jobs, who had put a lot of money into the community, and see what happens.''

Another long-time Alcoa worker, Kelvin Brewer, say small businesses in Geelong are already feeling a downturn from the loss of jobs at Aloca and other heavy manufacturers. ''People are saving their money,'' says Brewer.

''There are about 1000 here [at Alcoa], but there's probably three other people employed for every person here,'' says Brewer, who believes staff with a trade (electricians, fitters, boilermakers) will find work once the smelter shuts. ''But for 90 per cent of us, we've been here making aluminium for decades. There's not a lot of call for that.''

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