Rudd to rev up car rescue plan

[Jason[98.EL]]

taken from herald sun

THE federal government will today unveil its multibillion-dollar assistance package for the automotive industry.

The 10-year plan, to be launched by Prime Minister Kevin Rudd and Industry Minister Kim Carr, is expected to go further than the $2.5 billion already flagged, News Limited reports.

The package follows a review of the industry conducted by former Victorian premier Steve Bracks.
Released earlier this year, the review recommended a reduction in car tariffs from 10 per cent to 5 per cent by 2010, despite opposition from manufacturers and unions.

It also recommended the production of more environmentally-friendly vehicles, calling for the government's $500-million green car innovation fund to be brought forward to next year and, if successful, doubled to $1 billion.

The industry minister would not be drawn on the cost to taxpayers of the new package, but said car manufacturers would not be offered a blank cheque.

"All program assistance is predicated on post-production milestones being met,'' Senator Carr said.

While the government has sought firm commitments from Holden, Toyota and Ford that cars will continue to be made in Australia, there are fears guarantees may not be iron-clad, Fairfax newspapers report.

There are also concerns about the security of the plan given uncertainty about the future of carmakers around the world, Fairfax reports.

Grimus

[FalconXR6]

Would love to see a written copy of what the gummint considers to be "green" vehicles.

[SB076]

"While the government has sought firm commitments from Holden, Toyota and Ford that cars will continue to be made in Australia, there are fears guarantees may not be iron-clad, Fairfax newspapers report."

Thats the problem there can be no guarantees - to be honest I cant see the fund being that effective - yes it will help the manufacturers retool to make more efficient cars but looking it at, that means Toyota will continue with Hybrids (parts imported from Japan) and Ford/GM will bring in oil burners and maybe at best new technology lpg engines - however this will rely on their US parent companies approval.

The problem with this is that all this technology is mostly overseas and therefore the government funds will end up overseas (indirectly) Maybe the government would be better off offering tax breaks to manufacturers.

For $2.5 Billion the government could probably buy both the local arms of Ford and Holden, given there current state and the US parents need of funds.

[DanielXR8]

Mixed feelings about this, but anyway, taken from the Australian today.

http://www.theaustralian.news.com.au...10-601,00.html


KEVIN Rudd will forge ahead with a multi-billion-dollar car industry assistance package today, amid fears of further job losses and a downturn in the market, but he will warn manufacturers not to expect a blank cheque.

Focusing on fuel-efficient cars, the new stimulus package is expected to go beyond the $2.5 billion in extra funding previously flagged, significantly boosting the Government's proposed green car innovation fund.

The Government will also confirm today it has accepted a reduction in car tariffs from 10 per cent to 5 per cent in 2010, under a new 10-year plan for the industry.

The move follows a push among carmakers to secure an additional $800 million in compensation for the tariff plan, on top of the $2.5 billion suggested by former Victorian premier Steve Bracks.

Deeply concerned about the impact of the global financial crisis on the future of the domestic industry, the Prime Minister has sought private assurances from carmakers' chief executives that promised new investments in Australia will proceed despite the economic slowdown.

Mr Rudd has rejected Coalition warnings that the Government should hold fire until it is known whether US car giants will merge or even collapse and what the details of president-elect Barack Obama's mooted bailout for US carmakers are.

Today's announcement by the Rudd Government is expected to include a $60 million-plus fund to help car-parts suppliers to restructure and fast-track mergers. It follows warnings that, without action, up to 7000 carmaking jobs could be lost by the end of next year.

A separate plan to encourage the big banks to extend credit to car dealers to boost sales, and improve manufacturers' ability to obtain finance, is being worked through by Treasury officials.

In an interview with The Australian, Industry Minister Kim Carr would not be drawn on the cost to taxpayers of the new package, but said car manufacturers would not be offered a blank cheque.

"All program assistance is predicated on post-production milestones being met," Senator Carr said.

"We've got a whole new approach. For instance, the green car innovation fund assumes a 3:1 ratio as a starting point. So the Government puts in $1 for every $3 industry spends.

"What we want to do is build more fuel-efficient cars in Australia. We want to strengthen our international connections to lift exports.

"This can be done even in the context of this current financial crisis because this industry is a huge exporter already and a major spender on research and development."

The Coalition has urged caution in light of the fallout of the global financial crisis.

Opposition finance spokesman Joe Hockey told the Nine Network: "At the moment you have Ford and General Motors and Chrysler going to the new president of the United States asking for a $25 billion rescue package. You have rumours of Chrysler and General Motors merging. Toyota has had a massive drop-off in worldwide sales.

"I don't know that it is necessarily the right thing to hand money immediately to the motor vehicle industry in Australia without knowing whether those key companies are going to be merging or even won't even exist in 12 months' time.

"I think the first thing they should do is find out from the companies what their plans are for their own destiny, rather than us putting good money into an industry that might have to go through significant rationalisation over the next 12 months or two years."

Business yesterday urged the Victorian Government to use its much-delayed manufacturing statement to provide "significant new funding" for Victorian industry and strong support for a "buy local" policy.

Tim Piper, Victorian director of the Australian Industry Group, said industry, manufacturers, service providers and construction companies were being hit hard by the economic downturn.

"The Government must be seen to be taking initiatives to assist companies," Mr Piper said.

"Many companies are using holiday pay, long service leave, rostered days off and sick pay, to keep people on but these will inevitably end. "We have lost thousands of jobs in manufacturing and it is likely to get worse. The industry is contracting, which is why it is incumbent on government to act."

Ford Australia has already announced plans to slash 1400 jobs while GM Holden has announced 500 job losses.

Critics of the car industry rescue plan argue the Government is throwing good money after bad.

Melbourne Business School professor Paul Kerin said total industry assistance in 2006-07 was $1.255 billion - more than $4000 a vehicle produced.

"It's a waste of taxpayer money. It might help the industry but not Australia as a whole," he said.

"The market should be allowed to work. The industry can't have it both ways. If they demand extra assistance when the dollar is high then they can hardly keep demanding it when the dollar is a lot lower."

[RG]

Threads merged.

[bob^]

Originally Posted by SB076

The problem with this is that all this technology is mostly overseas and therefore the government funds will end up overseas (indirectly)

Correct, and profits will eventually end up overseas too, but wages will continue to be paid and then spent here. Keeps me in a job!

[Romulus]

The government needs to rethink it's tariff reduction program. Why should we reduce our tariffs when other countries don't do the same.

[Bushbasher]

IMO the fundamental flaw in all of this is dropping the tariffs. If they were serious about saving the local industry they'd leave the tariff alone or even marginally increase it again to get people to start buying local again, especially with the way things are going. People will be looking for any way they can to save a dollar and if you can save a dollar by buying local then you would have to seriously consider it.


Bushbasher

[MONSOON]

Originally Posted by TVS Super Pursuit

The government needs to rethink it's tariff reduction program. Why should we reduce our tariffs when other countries don't do the same.

EXACTLY,

It would be alot more useful, if ALL levels of government supported local vehicle manufacturers, when they buy imports they are effectively supporting foriegn jobs over Australian jobs, take the Queensland government, they started buying more imports over local because they were "greener", what a joke, It's about time they all stopped being so unaustralian, & got their priorities straight, forget all this user chooser garbage in Government, they can choose whatever they like as long as it's manufactured in Australia I reckon...

[EgoFG]

Yep, All goverment departments (local/state/fed) should buy Aust products if there is one in the segment. And this should extend beyond the Automotive Industry.

I think the rule should actually be based on the percentage of australian input, and be balanced by a series of 'penalties' for degree of non compliance.

Eg a Mitsubishi Lancer may be 7% Australian due to Management, Logistics, Taxes and marketing.
a Focus (built in AU) may be 66% australian.

The government department must pay a penalty of 1/10 of the non Australian portion into a fund to be used to support Australian manufacturing.
This would add 9.3% to the cost of the lancer, or 3.3% to the cost of the Focus

[Buddy 1]

Great to See

Ok so the Prime Minister is doing his Bit so how about we do Ours!

Buy Aussie Made Vehicles, No Ecuse Re Fuel Economy either as he has Doubled the LPG Rebate.

http://www.drive.com.au/Editorial/Ar...ID=58711&vf=26

[maccamom]

Mr Burela said Ford was committed to a future in Australia and was designing a car in Broadmeadows that would be sold in 50 countries while the low Australian dollar and dropping price of petrol were changing the market.

Which car is this one?

[irlewy86]

Originally Posted by maccamom

Which car is this one?

The "sporty" FWD Falcon and its Kluger look-a-like the FWD Territory

[Tles]

Originally Posted by maccamom

Which car is this one?

Not actually a car, a ute. The Ranger replacement and or the small Focus platform based small ute like a brumby/bantam/jumbuck etc.

[olfella]

Originally Posted by EgoFG

Yep, All goverment departments (local/state/fed) should buy Aust products if there is one in the segment. And this should extend beyond the Automotive Industry.

I think the rule should actually be based on the percentage of australian input, and be balanced by a series of 'penalties' for degree of non compliance.

From memory, the Hawke? government introduced something like this in their purchasing guidelines. Don't know what ever happened since then but they are gone... I think it makes sense.

[Nostalgia]

Apparently it's going to be a $6 Billion Package.........................

Adam.

[DanielXR8]

Originally Posted by Buddy 1

Great to See

Ok so the Prime Minister is doing his Bit so how about we do Ours!

Buy Aussie Made Vehicles, No Ecuse Re Fuel Economy either as he has Doubled the LPG Rebate.

http://www.drive.com.au/Editorial/Ar...ID=58711&vf=26

Does this mean when I get lousy service from my Ford dealer I can now scream to the Dealer Principal "my taxes are keeping you in a job mate!"

[outback_ute]

I agree, I'm not sure I follow the logic of trying to save the local industry but not putting a hold on tariff reduction...

[Sledgehammer]

I think that you should all go and look at the old UK Blair government policy on 'green' vehicles and then see what could happen here. I dont think that the local manufacturers actually have the funds to invest even on a 1-3 basis for green cars.

[mik]

Originally Posted by Sledgehammer

I think that you should all go and look at the old UK Blair government policy on 'green' vehicles and then see what could happen here. I dont think that the local manufacturers actually have the funds to invest even on a 1-3 basis for green cars.

i think your spot on mate a nice gesture, but for cash strapped companies it wont be a big help to them, a bigger help would be to get people buying cars again, another vote for make non local produced cars more expensive to buy.

[Bossxr8]

Doesn't matter how much money Ford get from the government, they will still find a way to screw it up. Until everyone in management from the CEO down gets held accountable for their stuff ups then nothing will change and it will continue to wither away into nothing.

Fords sales and marketing teams should also be held accountable.

And why does the government no longer have a buy Australian policy, that just makes me sick. When did this change, cause I know it used to be the case but not anymore.

[zetec]

http://www.greenvehicleguide.gov.au/...d-c308b77f6e3b

This is what killed large cars.

[Wretched]

I am in favour of the tariff reduction, we have enough taxes as it is.
Incentives are also there for the locals to innovate.
Still I don't hold much hope.
Maybe Ford OZ should seek advice from Ford in Europe.

[Gobes32]

Originally Posted by Buddy 1

Great to See

Ok so the Prime Minister is doing his Bit so how about we do Ours!

Buy Aussie Made Vehicles, No Ecuse Re Fuel Economy either as he has Doubled the LPG Rebate.

http://www.drive.com.au/Editorial/Ar...ID=58711&vf=26

Any one got info on the doubling of the lpg rebate?

[joolz]

Originally Posted by Wretched

I am in favour of the tariff reduction, we have enough taxes as it is.
Incentives are also there for the locals to innovate.
Still I don't hold much hope.
Maybe Ford OZ should seek advice from Ford in Europe.

It only applies if you purchase an import vehicle. The same d in China and wanted to import an FG Falcon where the tarrif is around 35% compared to our measly 10%. Dropping tarrifs or free trade would only benifit us if all the other countries follow suit which id doubt will happen. Raise the tarrifs and save my job along with the other 100,000+ in the australian automotive industry. Oh and we all know Mr Rudd is in love with Toyota and Asia so GM and Ford dont hold your breath for a fair share even though not everyone lives in the city and needs a little car.

[Wretched]

Originally Posted by joolz

It only applies if you purchase an import vehicle. The same d in China and wanted to import an FG Falcon where the tarrif is around 35% compared to our measly 10%. Dropping tarrifs or free trade would only benifit us if all the other countries follow suit which id doubt will happen. Raise the tarrifs and save my job along with the other 100,000+ in the australian automotive industry. Oh and we all know Mr Rudd is in love with Toyota and Asia so GM and Ford dont hold your breath for a fair share even though not everyone lives in the city and needs a little car.

Still don't agree with the tariffs, it shelters the car makers and encourages mediocrity, look how good those Chinese cars are ;) our industry wasn't exactly setting the world on fire with the cars they were producing under higher tariffs.
Plus I pay enough taxes if I want an imported car then that is my choice. The locals here don't cater for everyone's needs/wants and obviously haven't a for a while.

[vztrt]

Originally Posted by Wretched

Still don't agree with the tariffs, it shelters the car makers and encourages mediocrity, look how good those Chinese cars are ;) our industry wasn't exactly setting the world on fire with the cars they were producing under higher tariffs.
Plus I pay enough taxes if I want an imported car then that is my choice. The locals here don't cater for everyone's needs/wants and obviously haven't a for a while.

No but you notice how alot of car makers are building cars in China so they can sell them in that market. But then again Australia doesn't have the same population, also the world knows that Australia is dumb enough to pay a premium on products.

[mik]

i dont think the green guide is all that green ....i reckon my falcon will out last 3 priuses and 2 fiats no problem.

[mik]

Originally Posted by Wretched

Still don't agree with the tariffs, it shelters the car makers and encourages mediocrity, look how good those Chinese cars are ;) our industry wasn't exactly setting the world on fire with the cars they were producing under higher tariffs.
Plus I pay enough taxes if I want an imported car then that is my choice. The locals here don't cater for everyone's needs/wants and obviously haven't a for a while.

primary industry should come first in my book, and as far as mediocrity, you dont think our local cars have come along way? change does`nt happen overnight, if the car makers were making big buks they would`nt be in strife now, personally i think our cars are great value for money , not without faults but still comparable to most cars in their price range over seas imo.

[Buddy 1]

Originally Posted by Wretched

Still don't agree with the tariffs, it shelters the car makers and encourages mediocrity, look how good those Chinese cars are ;) our industry wasn't exactly setting the world on fire with the cars they were producing under higher tariffs.
Plus I pay enough taxes if I want an imported car then that is my choice. The locals here don't cater for everyone's needs/wants and obviously haven't a for a while.

Yeah you just continue to think only about yourself & not worry about what is good for your Country or fellow Citizens You Selfish *****