Call to Arms

[.FoMoCo.]

I think some people here might look back to the OP and reconsider their stance; we have a comparitavely under funded auto industry. Simple fact. The rest of the civilized world thinks their industry is worth hanging on to, why not us? This isn't the local 7/11 store we are talking about here, if it were to cease overnight it would be a national disaster.
Some comments in here I find staggering. The foreign ownership of our farms has now hit 10%. Are we destined to hand over the keys to nearly everyone internationally?
My point Is this: Ford, Holden, and Toyota for that matter are worth keeping for the good it brings this country. Not necessarily for the profits. Some government help is definately a positive thing for the greater good. Where will all our kids with degrees in design and engineering go without jobs in this country? We know the answer, and it is a bitter pill to swallow.

[johnydep]

Originally Posted by .FoMoCo.

I think some people here might look back to the OP and reconsider their stance; we have a comparitavely under funded auto industry. Simple fact. The rest of the civilized world thinks their industry is worth hanging on to, why not us? This isn't the local 7/11 store we are talking about here, if it were to cease overnight it would be a national disaster.
Some comments in here I find staggering. The foreign ownership of our farms has now hit 10%. Are we destined to hand over the keys to nearly everyone internationally?
My point Is this: Ford, Holden, and Toyota for that matter are worth keeping for the good it brings this country. Not necessarily for the profits. Some government help is definately a positive thing for the greater good. Where will all our kids with degrees in design and engineering go without jobs in this country? We know the answer, and it is a bitter pill to swallow.

Under funded? Isn't it up to the industry to majority fund their own R&D, Governments do assist but it must be prioritised. Remember what happened to Chrysler, Mitsubishi, Nissan, Leyland? All funded by Tax payer dollars, just to keep inefficient dying companies open for a bit longer.

You talk about 10% foreign ownership of our farms, have you thought about the 100% ownership of our car industry?

Governments should be looking at where to best invest in high return and long term industry, so that "all our kids with degrees in design and engineering" have quality opportunities.

What are we good at, as a country? That is what Governments all over the world ask themselves, then they target those industries. Which Companies will give us long term growth and stability? A question that should be asked so that larger sums of investment dollars can be distributed; rather than small chunks to all.

[2011G6E]

Originally Posted by johnydep

Under funded? Isn't it up to the industry to majority fund their own R&D, Governments do assist but it must be prioritised. Remember what happened to Chrysler, Mitsubishi, Nissan, Leyland? All funded by Tax payer dollars, just to keep inefficient dying companies open for a bit longer.

You talk about 10% foreign ownership of our farms, have you thought about the 100% ownership of our car industry?

Governments should be looking at where to best invest in high return and long term industry, so that "all our kids with degrees in design and engineering" have quality opportunities.

What are we good at, as a country? That is what Governments all over the world ask themselves, then they target those industries. Which Companies will give us long term growth and stability? A question that should be asked so that larger sums of investment dollars can be distributed; rather than small chunks to all.

All good points. We are a tiny country in population terms...the ones who are often quoted as having big government support are countries with populations in the hundreds of millions, minimum. There's only so much money to go around that had been squeezed out of a small number of taxpayers, and that has to be prioritised.
American-owned car makers should be told to find thier own funding...they've got massive bankrolls in the USA at Ford and GM...if they decide that it's uneconomic to keep building cars from scratch here, so be it. It would be sad, but anyone over a certain age will remember the manufacture of Chrysler, Mitsubishi, and other makes here, which all went under when they became uneconomic. That's life.

[.FoMoCo.]

The figures are per capita. I'll say it again... Per. Capita.
I'm well aware the auto industry is all foreign owned, what I am saying is its the thin edge of the wedge. We have choices to make via legislation and planning that affect our industries.
It looks like there are 2 camps here. One side says its unfixable, the market drives all outcomes, no government intervention is acceptable. The other side prefers to see the government put in to worthwhile industries. Overly sentimental and optimistic? Maybe.
I guess we'll have to agree to disagree on this one.

[johnydep]

Originally Posted by .FoMoCo.

The figures are per capita. I'll say it again... Per. Capita.
I'm well aware the auto industry is all foreign owned, what I am saying is its the thin edge of the wedge. We have choices to make via legislation and planning that affect our industries.
It looks like there are 2 camps here. One side says its unfixable, the market drives all outcomes, no government intervention is acceptable. The other side prefers to see the government put in to worthwhile industries. Overly sentimental and optimistic? Maybe.
I guess we'll have to agree to disagree on this one.

Sorry, but that's an overly simplistic description.

We could possibly save the industry by assisting one car manufacturer, we can't save all three.

Will a Government decide which one to assist and save? No. Would the public accept the decision if the Government did? No.

So instead the Governments do the next best thing to ensure votes - offer small amounts of assistance to all.

[Luke Plaizier]

Wow. Talk about over simplifying. "We can save one manufacturer but we can't save all three".

I'd like to see the complex analysis done to come to that conclusion!


Lukeyson

[tweeked]

Ok - make some sense out of these numbers - back to subsidy per car in each country. Australia is very close to Canada, UK and Germany at between $1200 - $1700 contributed by Government to each car.

Sweden is off the chart at $15,000 per car, but they are Volvos and people still dont want them. France is at $4300 and they are not much different from Volvos.

And then the US - now do we see why there cars are so much cheaper? The Gov give $10000 for each car made.


Production Population Sub per capita Total Subsidy Subsidy per car
Australia 243000 23000000 $17.80 $409,400,000.00 $1,684.77
Canada 2091000 35000000 $96.39 $3,373,650,000.00 $1,613.41
France 2227000 65000000 $147.38 $9,579,700,000.00 $4,301.62
Germany 5905000 82000000 $90.37 $7,410,340,000.00 $1,254.93
Sweden 217000 10000000 $334.00 $3,340,000,000.00 $15,391.71
UK 1393000 62000000 $27.00 $1,674,000,000.00 $1,201.72
US 7761000 313000000 $264.00 $82,632,000,000.000 $10,647.08

[johnydep]

Originally Posted by Luke Plaizier

Wow. Talk about over simplifying. "We can save one manufacturer but we can't save all three".

I'd like to see the complex analysis done to come to that conclusion!


Lukeyson

Relax. I never said that I was an expert, however, I have kept involved with the industry for the past 30 years. I also remember the in-depth Government reviews, and what the recommendations were. One Labour Government review of the late 1990's mentioned that we had too many vehicle manufactures to be sustainable in our market.

If we export like Hyundai, VW, etc do then maybe we can have all of them stay in Oz.

[johnydep]

Originally Posted by tweeked

Ok - make some sense out of these numbers - back to subsidy per car in each country. Australia is very close to Canada, UK and Germany at between $1200 - $1700 contributed by Government to each car.

Sweden is off the chart at $15,000 per car, but they are Volvos and people still dont want them. France is at $4300 and they are not much different from Volvos.

And then the US - now do we see why there cars are so much cheaper? The Gov give $10000 for each car made.


Production Population Sub per capita Total Subsidy Subsidy per car
Australia 243000 23000000 $17.80 $409,400,000.00 $1,684.77
Canada 2091000 35000000 $96.39 $3,373,650,000.00 $1,613.41
France 2227000 65000000 $147.38 $9,579,700,000.00 $4,301.62
Germany 5905000 82000000 $90.37 $7,410,340,000.00 $1,254.93
Sweden 217000 10000000 $334.00 $3,340,000,000.00 $15,391.71
UK 1393000 62000000 $27.00 $1,674,000,000.00 $1,201.72
US 7761000 313000000 $264.00 $82,632,000,000.000 $10,647.08

Links please.

[tweeked]

Originally Posted by johnydep

Links please.

http://en.wikipedia.org/wiki/List_of..._by_population

http://en.wikipedia.org/wiki/List_of...cle_production

2011 for population and 2010 for vehicles produced - close enough

[johnydep]

Originally Posted by tweeked

http://en.wikipedia.org/wiki/List_of..._by_population

http://en.wikipedia.org/wiki/List_of...cle_production

2011 for population and 2010 for vehicles produced - close enough

Thanks. Here is some interesting reading from the ABC:

http://www.abc.net.au/unleashed/3778642.html

On The Drum last week, Annabel Crabb pointed out almost every other country pours cash into their automobile industry.

But that doesn't mean that we need to keep supporting ours. Right now, the rest of the world supports the car industry for the same reason we do - because during the second half of the 20th century, manufacturing unions built extremely close relationships with political parties. Those relationships have paid off handsomely in subsidy, protection, and parliamentary representation.

There's nothing special about automobiles that demands government support. They're not particularly challenging to make. They're not particularly central to the economic structure. They're not particularly hard to buy from overseas. Their manufacturing is not particularly high-tech, at least compared to any other industry. Yet they are particularly well connected. And that's it. That's why we support them.

[Luke Plaizier]

Many other countries have a public healthcare system, but that doesn't mean that we need to keep ours.

Many other countries put public money into private education, but that doesn't mean we need to put any into ours.

Many other countries provide incentives and discounts for farmers, but that doesnt mean we need to provide any for ours.


That's a pretty awesome argument. I like it a lot! Let's see, where else can we use that......


Lukeyson

[Bossxr8]

Originally Posted by johnydep

Relax. I never said that I was an expert, however, I have kept involved with the industry for the past 30 years. I also remember the in-depth Government reviews, and what the recommendations were. One Labour Government review of the late 1990's mentioned that we had too many vehicle manufactures to be sustainable in our market.

If we export like Hyundai, VW, etc do then maybe we can have all of them stay in Oz.

We can't export with the aussie dollar so high, it automatically prices any aussie built car out of the market. Simple as that.

Different story if the aussie dollar was around 60-70c US.

[aualright]

Originally Posted by Luke Plaizier

Many other countries have a public healthcare system, but that doesn't mean that we need to keep ours.

Many other countries put public money into private education, but that doesn't mean we need to put any into ours.

Many other countries provide incentives and discounts for farmers, but that doesnt mean we need to provide any for ours.


That's a pretty awesome argument. I like it a lot! Let's see, where else can we use that......


Lukeyson

You're on the money here, pardon the pun. Govt's aren't here to make super profits, although some form of surplus adds security. The govt is here to support their people, using taxpayer's money to do so.

I would prefer them spend money on industry, health and education rather than middle class welfare we have seen over the past decade, eg. Childcare rebates.

****

[johnydep]

Originally Posted by Luke Plaizier

Many other countries have a public healthcare system, but that doesn't mean that we need to keep ours.

Many other countries put public money into private education, but that doesn't mean we need to put any into ours.

Many other countries provide incentives and discounts for farmers, but that doesnt mean we need to provide any for ours.


That's a pretty awesome argument. I like it a lot! Let's see, where else can we use that......


Lukeyson

Whoa hold on tiger, with that reasoning you're saying that our Government should take on everything. Lets take the emotion out of the argument. I know it's hard I have mates that lost their jobs at Mitsubishi when it closed down, they are now much happier in a job that they don't have to always look over their shoulder wondering what will happen tomorrow.

I don't want to see our car industry shut down, I'm just looking at the facts and there are 40 years that I know of where our industry has always struggled against another country. First it was Japan, then it Korea, Europe and now China and Thailand.

Yes the Government can increase tariffs, import taxes, subsidies, hand outs, etc. But think about; how much will the end product cost?

With an industry that is fully protected from competition, why would they have to be competitive?

Add onto that the amount of extra tax we would have to fork out so that the Governments can help prop up an industry.

We build good quality cars, they're relatively cheap to maintain and repair. I always tell my customers on an average income to buy the local product because it will be cheaper in the long run.

However, I can not agree with you that it's OK for the Government to pump money into an industry, without a proper long term plan.

Why did Ford build a plant in Thailand? With their history in Australia and the amount of help we have given, they should have invested in Australia. Set up the same factory to export to the rest of the world. Same goes for Holden.

The only way we can have a long term viable automotive industry is if we export in huge numbers.

If the car manufacturers want money from us, give us a reason. The Government should/must negotiate to ensure this, like Korea did with Hyundai.

[johnydep]

Originally Posted by Bossxr8

We can't export with the aussie dollar so high, it automatically prices any aussie built car out of the market. Simple as that.

Different story if the aussie dollar was around 60-70c US.

Didn't seem to hurt the German and Japanese automotive industry too much over the past 30 - 40 years.

Look at the successful companies like BMW and Hyundai; they started with a cheap product and slowly value added until they had a reliable high quality product that people didn't mind paying for.

Japan did it through the 1950's - 1970's. Their cars were cheap and everyone knew it, but with every model they worked on the reliability, repair costs and then value added.

We should have been doing this when the Button Plan was introduced. Have we missed the boat?

[Bossxr8]

Originally Posted by johnydep

Didn't seem to hurt the German and Japanese automotive industry too much over the past 30 - 40 years.

Look at the successful companies like BMW and Hyundai; they started with a cheap product and slowly value added until they had a reliable high quality product that people didn't mind paying for.

Japan did it through the 1950's - 1970's. Their cars were cheap and everyone knew it, but with every model they worked on the reliability, repair costs and then value added.

We should have been doing this when the Button Plan was introduced. Have we missed the boat?

Can't see how the Germans and the Koreans had problems with a high aussie dollar.

And the Hyundais were just cheap and nasty sold only on price. Falcon is nothing like that. Can't see Falcon being exported to other countries with a $12,990 drive away price like the Excel.

And since when has BMW been a cheap product, even after WWII they were a prestige brand.

[johnydep]

Originally Posted by Bossxr8

Can't see how the Germans and the Koreans had problems with a high aussie dollar.

And the Hyundais were just cheap and nasty sold only on price. Falcon is nothing like that. Can't see Falcon being exported to other countries with a $12,990 drive away price like the Excel.

And since when has BMW been a cheap product, even after WWII they were a prestige brand.

The German and Japanese also had issues with their currency, they got through it.

Yes the Hyundai was a cheap product but people were happy with the price, lots were sold which helped the company fund new models and improved quality & value adding. Have you had a good look at the latest Hyundai's?

The BMW of the 50's was not the luxury car that you know of today, they we're cheap sporty transport that found a niche & worked with it.

These are all things that our industry should have done years ago, and if they want to survive need to work it out & do it now.

[Luke Plaizier]

So the essential propositionbeing put forward here is that any government putting money into an industry, or protecting an industry, is not a cool idea.

Given that the WTO is supposedly giving us an 'open' international market (yet from outward appearances it would seem that Australia is the only country doing so) and in many ways countries are pitching themselves against other countries in this 'competition', if Australia just drops every industry, and doesn't decide to keep a few, isn't that just handing the 'victory' to these other countries with trade barriers or government assistance in excess of what Australia provides?

Australia has been trying to get an FTA (Should that stand for 'F%& The Aussies' given the Thailand FTA outcome?) with China for years now. What if China never agrees, and just simply continues with the large import tariffs or ludicrous local-partnership and IP exchange requirements for local production plants. Do we just keep Australia completely open and let them wipe us all out of jobs?

On the other hand, if the trade barriers to China and/or the rest of the Asia Pacific region open up to real FTA participation in the next 5 to 10 years, wouldn't it be a pity that the average Australian had lobbied to shut down Australian plants just a few years before the markets all opened up and Australia could finally compete on the export market on an equal footing.

I wish the Average Australian would put as much effort into lobbying foreign governments to stop financial assistance to THEIR local car manufacturers, and open their markets for 'us' to sell our stuff to 'them', as they do to stop the Australian government from doing so, and insist on letting 'them' sell stuff to 'us'.

And hence we circle back to the OP.


Lukeyson

[.FoMoCo.]

Here, here, lukeyson. Well said. There is no doubt the FTA system is deeply flawed. It seems it was based on a concept of governments playing fair with each other. Human nature will never allow this to work. Altruism is not at the centre of fiscal policy.
Given this reality, it is no surprise countries are taking advantages over other nations wherever possible. For example - China keeping It's currency artificially low despite protests from the US and other nations to give them a break. The average Thai worker lives on money that is really criminally low. That's the real reason plants are being built there.
And I totally reject the idea that the Australian Fords have had no value added to them over the years. The FG is a great car, leaps and bounds ahead of ten years ago. The falcon is a world class car.

[johnydep]

Want to help local industry? Lobby your local MP to scrap the carbon tax!

What say ye!

[Luke Plaizier]

You know, that's an amazing parallel being drawn there, nice one, even if it's a bit of a tangent.

I actually do support a carbon tax. But once again I have trouble with only Australia supporting it while other countries don't, in much the same way that Australia supports open trade while other countries currently don't. The current plan is for high-emissions companies to get some form of compensation in the short term until the rest of the world catches up and implements a Carbon Trading scheme as well right? That to me sounds a little like the monetary support provided to the Auto industry.

In my view, the better outcome would be ALL countries supporting a Carbon Trading Scheme, and Open Trading, and not just Australia, while Australia supports it's current manufacturers in the interim, rather than Australia backing out of both now.


Lukeyson

[johnydep]

Originally Posted by Luke Plaizier

You know, that's an amazing parallel being drawn there, nice one, even if it's a bit of a tangent.

I actually do support a carbon tax. But once again I have trouble with only Australia supporting it while other countries don't, in much the same way that Australia supports open trade while other countries currently don't. The current plan is for high-emissions companies to get some form of compensation in the short term until the rest of the world catches up and implements a Carbon Trading scheme as well right? That to me sounds a little like the monetary support provided to the Auto industry.

In my view, the better outcome would be ALL countries supporting a Carbon Trading Scheme, and Open Trading, and not just Australia, while Australia supports it's current manufacturers in the interim, rather than Australia backing out of both now.

Lukeyson

Can you see the dilemma of calling for the Government to protect our auto industry with Tariffs and subsidies, while supporting a Carbon Tax?

It's reverse protectionism! We'll be assisting other countries that have no or a very low Carbon Tax.

Even with the Government handing out money to assist companies with the CarbonTax (which makes no sense) it will be another cost on business, and the assistance won't last until all Countries have an equal Tax amount.

Oxymoron?

[Luke Plaizier]

Yep, I can see the dilemma. And I'm of the opinion it's just a short term issue. I'm not sure where the analysis comes from that the assistance won't last until the other countries in the region adopt the same strategy, but I can appreciate that we wouldn't want it to go on for too long.

It's nothing that won't be fixed by having ALL countries in our region subscribe to Carbon Emissions Trading and Open Trade Agreements.

Here's the Wikipedia write up on the progress being made to open up trade between all the Pacific Nations. It makes it look like we're only a few years away from a pretty wide spread agreement.

http://en.wikipedia.org/wiki/Trans-P...ic_Partnership


Lukeyson

[johnydep]

Lukeyson, if you believe that then you believe that Free Trade will eventually work.

Free Trade agreements went into full swing under the Hawke/Keating government, it was always a long term plan, with subsidies to business; how much of those subsidies still exist?

Do you really think a world equal Carbon Tax will happen in the next few years?

Sorry, but an Australian Carbon Tax is another added disadvantage to our industry.

As for Wiki; it's a great free resource but it's not a true reflection.

[SVR73]

Originally Posted by GT-E

Why subsidise an industry that is non-viable. I support made in australia, but cannot understand why we are designing and building cars that are have very little demand. While I know I will get flamed because of this viewpoint, surely there are better places to spend money to encourage industry that can stand on their own 2 feet and make money, not be a "Manufacturing Dole Bludger" and make all of us pay for their inability to make a profit.

I would rather see my tax dollars going into developing new technologies. Just look at Mitsubishi, they were subsidised, given grants and tax brakes and still buggered off.
Unfortunately I see our local car makers dying a slow death as we all switch to more efficient car makers.

I agree with you. if a car maker or a car industry in a country isnt viable then thats too bad.
I'm not buying a new car ever again unless they start making attractive looking cars with quality materials in them. love large sedans and coupes and always will. so sticking with what I've got.

[Luke Plaizier]

Originally Posted by johnydep

Sorry, but an Australian Carbon Tax is another added disadvantage to our industry.

As for Wiki; it's a great free resource but it's not a true reflection.

OK, fair enough, I can't argue with that.

I'm probably being selfish in hoping that a Carbon tax will help make sure there's a planet for my kids and their kids to live on. But if the other countries don't do it, then you're right, there's no point in Australia doing it either.

Now, what was this thread about again?


Lukeyson