Holden threatens to close factory

[aussie muscle]

Holden getting into politics to shore up their future funding?

Libs to support car industry or 2022 commitment is under question – Holden

GM Holden has called on the federal opposition to clarify its automotive manufacturing policy or risk the future of Australia’s motor industry.

Holden and its parent General Motors have committed to building cars in Australia until 2022, however, managing director Mike Devereux today made it clear that a change in government and policy settings could put that deal at risk.

The Holden deal provides for $275 million in support from the federal, Victorian and South Australian governments, in return for $1 billion in GM investment.

Two models based on global architectures are planned for the Elizabeth plant in South Australia. One will be the second-generation Cruze; the other model is yet to be announced.

That second model line will not be the locally developed Commodore large car, which enters its second and final VF generation in 2013.

Holden is one of three car manufacturers still operating in Australia. The others are Toyota, which opens a new engine plant next month, and Ford, which already has a questionable future beyond 2016.

All three have announced workforce lay-offs in 2012.

Speaking at this morning’s launch of the seven-seat Colorado 7 off-roader, Mr Devereux said the 2013 federal election was shaping as a referendum on the future of car manufacturing in Australia unless a bi-partisan approach was adopted on the issue.

He said he clearly understood the government’s policy on the future of local manufacturing, but the opposition’s policy was not clear to him.

“I need to understand very clearly in a forward looking sense what each party’s policy is on auto manufacturing. Are they committed to making things in this country? Are they committed to fulsome reviews?”

Mr Devereux said that the current adversarial political atmosphere and the unclear opposition position made his regional and global superiors uneasy about ongoing commitment to manufacturing in Australia.

“They ask me ‘What do these things actually mean for future industrial policy, what does this mean, what does it infer?’”

Mr Devereux also admitted frustration at the constant criticisms of government support for the car industry by commentators as well as politicians.

He claimed car manufacturing was a job and investment multiplier but admitted the Elizabeth plant was the second most expensive plant in the GM network globally, which has always put it under viability pressure.

“It is harder work for us to make a go of it in this country than just walking away,” Mr Devereux said. “Walking away is actually easier for General Motors.

“The right thing for our brand and for the people who work here is for us to make things in this country. Now we are not doing that to be nice to this country, we are doing it because it is the best thing for our brand and our business in this country.

“That is why we want to make things here. I think it also happens to be good for the country.”

Asked if he was advocating a vote for the Labor government unless the Coalition became a bi-partisan supporter of the car industry, Mr Devereux said: “My hope is that the auto industry is not an election issue and it is a bi-partisan issue in the election next year.

“It needs to be a bi-partisan issue. I think that there will need to be a review of auto policy no matter who is elected into government next year, in the same way as there was a Button review (1980s) and there was a Bracks review (2008).

“I think there needs to be another broad-based review of both manufacturing and auto policy and I think that is absolutely irrespective of which party takes power.

“It is a country issue, not a political issue.”

However, Mr Devereux conceded that unless there was a change of attitude, the future of the local car industry would be a federal election issue in 2013.

“It would seem to me the issue of making things in this country is still on the public agenda, or at least the political agenda, and it looks like it will be an election issue next year.

“In the United States the issue of making things in the USA and the auto industry was certainly a large factor in the re-election of President Barack Obama. It became an election issue, it was front and centre.

“I believe 2013 will be a year where Australia decides whether it wants to have an auto industry or not, and we still have much to do that in regard even though we have a 10-year plan to invest $1 billion of General Motors money.

“But we still have political discourse in a way to me that is still quite illogical when you look at some of the analogies that you have around the world where this particular industry, because of its bedrock nature, because of the multiplier effect … is an issue of national importance to this country and it doesn’t seem to go away with each passing week and the announcement of another supplier being in trouble.

“These are very significant times in this industry, and we will again be front and centre. Not that I want to be, I just want to sell cars. I don’t want to be part of the political debate in the country.

“Every single time there is one single supplier job lost or one OEM job lost, and everybody says ‘should we be doing this, can we afford to be doing this?’ the question I would ask to most Australians is ‘can you afford not to do it?’”

Mr Devereux contrasted the Australian situation with the UK, where he claimed bi-partisan support of government co-investment policy had resulted in $10 billion spent over the last 24 months by multi-national auto manufacturers, including General Motors, and the guarantee of annual production of more than two million cars per annum within three years.

“The Regional Selective Assistance Program in the UK is the main driver of foreign direct investment because it is a very fertile ground to invest (in).”

The Coalition's stance on automotive industry policy has generally been supportive, but calls for a $500 million reduction in the federal government's $1.5 billion Automotive Transformation Scheme, which runs between 2011 and 2015 and was to be followed by a further $1 billion between 2016 and 2020.

source: http://www.carsales.com.au/news/2012...-factory-33826

[zilo]

So...if us taxpayers throw $275 million at Holden we will continue having the Cruze?

Sorry GMH ...not good enough....the Cruze is rubbish.

For that sort of money I expect a lot more for my tax dollar.

[Joe5619]

Originally Posted by Ugg

So...if us taxpayers throw $275 million at Holden we will continue having the Cruze?

Sorry GMH ...not good enough....the Cruze is rubbish.

For that sort of money I expect a lot more for my tax dollar.

A) For the 275M the government spends, GM is throwing in 1B!!! The government spent will already pay for itself by 363%!! How can awayone say that is bad????????? That is 1B dollars beening spent in this country!!
B) The current Cruze might be rubbish, but the new one will most likely be a different story!!

[zilo]

Originally Posted by Joe5619

A) For the 275M the government spends, GM is throwing in 1B!!! The government spent will already pay for itself by 363%!! How can awayone say that is bad????????? That is 1B dollars beening spent in this country!!
B) The current Cruze might be rubbish, but the new one will most likely be a different story!!

Simple fact is the profits go overseas and the local component content of GMH product is less and less with every year that goes by.

The Cruze is more than 50% imported components and the components that are local are lame low tech parts like bonnet hinges and windscreen wiper arms.

Unless they plan to develop engines, transmissions or ECU asemblies then they are just a stamping plant and don't deserve to describe themselves as local manufacturers,

It's as obscene as manufacturing the whole damn lot in asia as parts then assembling the whole lot here and just because the parts are marked up by 50% thereby claiming that it has 50% local content.

Originally Posted by MAD

Every person employed by a car maker pays taxes to the gov, every car sold has a portion of tax that goes to the gov, and any profit the car maker makes results in a tax to the gov.

Bit of money in, a lot of money out.

Yeah...and profits back to .......?

Needs to be a bigger commitment to the taxpayer if to hand over $270 million to a multinational that after all is said and done simply sends profits back to America.. .

[Struggo]

Originally Posted by Ugg

Simple fact is the profits go overseas and the local component content of GMH product is less and less with every year that goes by.

The Cruze is more than 50% imported components and the components that are local are lame low tech parts like bonnet hinges and windscreen wiper arms.

Unless they plan to develop engines, transmissions or ECU asemblies then they are just a stamping plant and don't deserve to describe themselves as local manufacturers,

It's as obscene as manufacturing the whole damn lot in asia as parts then assembling the whole lot here and just because the parts are marked up by 50% thereby claiming that it has 50% local content.




Yeah...and profits back to .......?

Needs to be a bigger commitment to the taxpayer if to hand over $270 million to a multinational that after all is said and done simply sends profits back to America.. .

Whilst you post many valid points UGG, Australia has and always will rely on foreign investment.

Foreign investment in Australia is not new. It has been a key factor in Australian economic development since the First Fleet landed in 1788

http://finance.ninemsn.com.au/newsbu...bad-says-henry

http://crawford.anu.edu.au/about_ipp...-australia.php

[Joe5619]

Originally Posted by Ugg

The Cruze is more than 50% imported components and the components that are local are lame low tech parts like bonnet hinges and windscreen wiper arms.

50% of Cruze is better then 0%!!

[zilo]

Originally Posted by Joe5619

50% of Cruze is better then 0%!!

yeah i suppose it's only a 50% misrepresentation.

"Holden has confirmed an initial local content level of between 40 to 50 percent if assessed by retail value, with an aim of increasing Cruze localization over time"


That means that the dealer profit margin is assessed as part of the local content in dollars,( rather than as a manufactured apportionment).


The Cruze should be more aptly named "Koreas best selling car in Australia with a Holden badge."

[Buntz]

Originally Posted by Ugg

Simple fact is the profits go overseas and the local component content of GMH product is less and less with every year that goes by.

The Cruze is more than 50% imported components and the components that are local are lame low tech parts like bonnet hinges and windscreen wiper arms.

Unless they plan to develop engines, transmissions or ECU asemblies then they are just a stamping plant and don't deserve to describe themselves as local manufacturers,

It's as obscene as manufacturing the whole damn lot in asia as parts then assembling the whole lot here and just because the parts are marked up by 50% thereby claiming that it has 50% local content.




Yeah...and profits back to .......?

Needs to be a bigger commitment to the taxpayer if to hand over $270 million to a multinational that after all is said and done simply sends profits back to America.. .

So it's the manufacturers fault that they can't source more local parts from Australia?

Why are you talking nonsense?

__________________________________________

Mike Devereux is absolutely correct. And probably the only guy in the industry with the balls to say it. The government isn't doing enough to sustain the companies of this nation and co-invest with them to make goods we can sell to other nations. And it's the reason we see more and more parts suppliers and manufacturers going out of business. But what happens when resources slow down? What happens when China see's all the stuff they've been building has been totally unnecessary... and doesn't buy our Iron ore, or gas. Who will pay the nations bills? Well... we certainly won't be able to make anything, but we will have a nation of skilled managers with nothing to manage.

[Nikked]

Cruze is better the unemployment....

[minheim]

No Holden no local made fords or Toyotas either. I want to live in a country that can make things not just dig holes

[stang65]

The above is true, pretty much saying get rid of the car industry and there will be ALOT of unemployed people depending on your taxes. I would rather pay to support an industry with my taxes than have to support unemployed with my taxes.

[Papa Smurf]

Strange, GMH already shut down the Pagewood plant years ago, even after getting so many tax breaks and cheap land.

Stang65:
I would rather pay to support an industry with my taxes than have to support unemployed with my taxes

I agree but you have to convince politicians and ordinary people to spend their $$$ on Aussie products and get the local producers to up their quality.

[Winter XR8]

I would rather my tax money going to support Holden then spending $1billion+ on boat people!

[TC200six]

No mention about this on Nine News or Sky News Facebook pages, yet when something is going down at Ford, they always make it big news.

[PridenJoy]

The Holden GM is right and I actually agree with everything he said above.

[JPFS1]

The program budget extends far beyond just our borders. It's not a 1B spend just in Australia. It's not just a Holden development. You can bet, just like Ford, that they have engineers working on their global platforms in places like Asia, S.America, N.America etc.

[irish2]

The simple fact (for the simpletons who will inevitably rock in), is that if we make nothing in this country we are 100% dictated to by our dollar. When the dollar goes back to 50c American, offshore made cars' prices (and everything else imported) will sky rocket.

[MAD]

Every person employed by a car maker pays taxes to the gov, every car sold has a portion of tax that goes to the gov, and any profit the car maker makes results in a tax to the gov.

Bit of money in, a lot of money out.

[Nikked]

opposed to all those mining companies that keep 100% of their profits in Australia?

[nstg8a]

Who cares where the profits go, as long as people stay employed.

If you want a pice of the cake buy some shares.

[zilo]

Originally Posted by nstg8a

Who cares where the profits go, as long as people stay employed.

If you want a pice of the cake buy some shares.

$275 million is enough to pay all the GMH assembly line workers enough to never be on centrelink and retire right now, play golf etc....

Much better option than delaying the inevitable.

[Nikked]

Originally Posted by Ugg

$275 million is enough to pay all the GMH assembly line workers enough to never be on centrelink and retire right now, play golf etc....

Much better option than delaying the inevitable.

Ok....lets say...


-Holden employ 2000 throughout their operations...
-On average, they pay $100 tax

that's $200 000

Now, in one year that's $10 400 000...

Now, over ten years...$104 000 000...


Are you still saying its a bad investment?


Think about the flow on, apprentice training, transport operators...Not to mention, that 1 Australian car sold, is one import car not stolen...ie, your precious profit. 1 Australian car sold is more profit for Australia, then an import...You're talking about shutting down manufacturers that have continually invested in Australia for almost 100 years. That is commitment that needs to stay.


Still thing its a poor investment?

Go down to Fisher mans Bend or Elizabeth and tell them your theory...i dare ya...

[zilo]

Originally Posted by Nikked

Ok....lets say...


-Holden employ 2000 throughout their operations...
-On average, they pay $100 tax

that's $200 000...

Not directly in manufacturing they dont buddy boy.
If when they adopt a full import model then it would will be half that.

Originally Posted by Nikked

Now, in one year that's $10 400 000...

Now, over ten years...$104 000 000......

Now in 1 year that would be wrong, in ten years even wronger.
They might invest more capital for more robots, but more staff?

Nah..

Originally Posted by Nikked

Are you still saying its a bad investment? ...

Still think it's a long term investment?

Originally Posted by Nikked

Think about the flow on, apprentice training, transport operators...Not to mention, that 1 Australian car sold, is one import car not stolen...ie, your precious profit. 1 Australian car sold is more profit for Australia, then an import...You're talking about shutting down manufacturers that have continually invested in Australia for almost 100 years. That is commitment that needs to stay....

Apprentices still have to fix them, the imported cars still have to be transported, the cruze is not an australian car it is an import.

A manufacturer that can't justify it's existence except through subsidies from the taxpayer should either wind up or be nationalised by the govt.
Not just be the recipient of handouts.

Originally Posted by Nikked

Still thing its a poor investment? ...

Want me to subsidise Woolworths and Bunnings just cause they employ people?

Originally Posted by Nikked

Go down to Fisher mans Bend or Elizabeth and tell them your theory...i dare ya...

maybe I should go to korea and tell them what they already know?

[ray38l]

Originally Posted by Ugg

Not directly in manufacturing they dont buddy boy.
If when they adopt a full import model then it would will be half that.



Now in 1 year that would be wrong, in ten years even wronger.
They might invest more capital for more robots, but more staff?

Nah..




Still think it's a long term investment?




Apprentices still have to fix them, the imported cars still have to be transported, the cruze is not an australian car it is an import.

A manufacturer that can't justify it's existence except through subsidies from the taxpayer should either wind up or be nationalised by the govt.
Not just be the recipient of handouts.






Want me to subsidise Woolworths and Bunnings just cause they employ people?



maybe I should go to korea and tell them what they already know?

you obviously have no idea what businesses get subsidies. think Rio tinto, Bhp biliton and every other mining company that operates in this country and you are only scratching the surface.
I'm sure if Woolworth's, bunnings or Coles were struggling the government would provide financial assistance to keep them in business.
its basic maths 250 million to get a billion dollar investment back. to put it easier for the slow ones around here if someone asked for $250 with the guarantee that you will get $1000 back would you turn it down?

[sprint347dave]

I will NEVER buy a holden,,,let the place close,,i dont care,,,,and you can blame there marketing department,,,that stupid add where there was a SS swearving around kids toys in a driveway,,late 90s early 00s i think

[MethodX]

Originally Posted by sprint347dave

I will NEVER buy a holden,,,let the place close,,i dont care,,,,and you can blame there marketing department,,,that stupid add where there was a SS swearving around kids toys in a driveway,,late 90s early 00s i think

Fords had its share of annoying ads or just none at all.
the latest crop seem to be aimed to the vw.mazda crowd... sickening.

Anyway, the cruze is improving.
And better there is some manufacturing here... some tariffs would be nice.

[tezxr8man]

Originally Posted by MethodX

Fords had its share of annoying ads or just none at all.
the latest crop seem to be aimed to the vw.mazda crowd... sickening.

Anyway, the cruze is improving.
And better there is some manufacturing here... some tariffs would be nice.

for sure, we need the tariffs, everyone else has them for us

[Nikked]

Well well well...


Gov-co as $2billion+ diesel fuel rebate to the mining sector. TMR


...and they are worried about a lazy 200 mill for the motor industry?


I think it is down right despicable of the government to use the loss of innocent jobs (related to Joe Hockey's slamming of Ford's layoffs, despite the gov package) as ammo for parliamentary agenda. The Average Australian won't have a clue about the motoring sector, they just see "our tax dollars" and a pothole in their road and think the government is wasting money...

...the same government that reduced tariffs further, introduced a one-side free trade agreement...sent a carbon tax that cost the industry 400m a year...

/rant.

[Nikked]

Found these figures again...but not from the original source...

This is Per person, per year IIRC. Government subsidies of the auto industry.

Australia $17.80
Germany $90.37,
Sweden $334
US $264.

[Buntz]

Originally Posted by Nikked

Found these figures again...but not from the original source...

This is Per person, per year IIRC. Government subsidies of the auto industry.

Australia $17.80
Germany $90.37,
Sweden $334
US $264.

Disgraceful.