Small city could be Australia's Silicon Valley, or its Detroit

Thu Mar 6, 2014 1:13am EST
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By Matt Siegel

GEELONG, Australia (Reuters) - Behind closed doors at City Hall, Geelong's eccentric mayor sits searching for an analogy to put into perspective the punishing job losses battering his city.

Darryn Lyons runs his fingers through his blonde mohawk - the man leading this Australian manufacturing hub was once a paparazzo and reality TV star in Britain - before settling on a way to describe how the departure of companies such as Alcoa Inc and Ford Motor Co. will hurt.

"I relate it a little bit to the prehistoric age, really. The dinosaurs have been going throughout the world for the last seven or eight years," he said, referring to the struggle to adapt in the face of growing competition from Asia and then the global financial crisis.

Geelong, 75 km (46 miles) south of Melbourne, is a microcosm of the economic crossroads at which Australia stands. The steps authorities and industry leaders take here - securing next-generation defense contracts or incubating carbon fiber production - will be closely watched to see if the city becomes Australia's Silicon Valley or its Detroit.

Australia largely avoided the turmoil of the global financial crisis by leveraging Chinese demand for its abundant natural resources. The mining boom, however, is slowing and a high Australian dollar has helped drive its manufacturing base overseas.

The announcement last month by U.S. aluminium producer Alcoa that it would close its Point Henry smelter, putting 600 people out of work, was just the latest in what Lyons has called a "tsunami" of manufacturing job losses across the country.

Geelong, home to nearly 180,000 people, is now wrestling with the question facing much of Australia: what happens when there is neither a resources boom nor a substantial manufacturing sector.

FACTORY GHOSTS   Continued...

The Alcoa Aluminium Smelter is pictured before sunrise at Point Henry in Geelong, February 25, 2014. Geelong, south of Melbourne, is a microcosm of the economic crossroads at which Australia stands. REUTERS/Jason Reed