General Motors international boss Stefan Jacoby says Australia is better without car manufacturing

[Syndrome]

http://www.news.com.au/technology/in...-1227183680228

If that is true, why didn't the US government let GM go bankrupt instead of pumping in all those US taxpayer dollars?

[galaxy xr8]

Gee I got **** canned back in ’09 when I mentioned this exact thing back then about a certain CEO that said the same thing, oh hang on but what would a CEO of a major bank know about it I was told...

I guess he knew more then those that questioned him.

I just found that thread/ post, here it is page 14 post 412.
http://www.fordforums.com.au/showthr...256013&page=14

[MITCHAY]

Funny he says this being far away in Detroit which by all accounts is a mess.

[Bossxr8]

So if he says taking government funding is bad business then maybe GM should refuse any US Government money. The hypocrisy of these GM clowns is beyond belief.

[b0son]

Originally Posted by Syndrome

If that is true, why didn't the US government let GM go bankrupt instead of pumping in all those US taxpayer dollars?

Slightly different scenario ... the US owns GM, we never owned Holden.

[Syndrome]

Originally Posted by b0son

Slightly different scenario ... the US owns GM, we never owned Holden.

GM is (was) a private company. In a true capitalistic environment they should be allowed to fail if they are not profitable.

[Ford17]

The article seems to highlight Holden not being able to get their story straight:

In another startling revelation, Mr Jacoby also claims Mike Devereux, the Holden boss who fought to save Holden’s assembly line for two years and pushed for an increase of more than $200 million in government funding, was in fact in favour of the shutdown.

[CyberWasp]

"Government incentives are no way to run a business"

Didn't the US Government spend 50 Billion to bail out GM in 2009, and lost approx 10 Billion when all was said and done.

If Mr Jacoby was a man of his word he would personally pay back all his income from GM in that time to the US government and close the doors.

Good luck explaining to the board Mr Jacoby when Holden slips down lower than Ford in Car Sales after your decision to close.

[zilo]

The guy is either an idiot or a fanatical patriot who works in the US "national interests".

Yep..the latter me thinks, everyone else should forego their manufacturing so that Americans get jobs.

[eb2fairmont]

realistically holden is in for a bit of a bath once commodore is gone. nothing will replace the sales lost.

[b0son]

Originally Posted by Syndrome

GM is (was) a private company. In a true capitalistic environment they should be allowed to fail if they are not profitable.

There is no 'true' capitalistic environment. When a company is big enough, the social cost of losing that company is greater than the temporary impost on the taxpayer. Remember, the bailouts were loans, not gifts.

[LoudPipes]

I don’t know why people don’t understand the local car industry has wanted to pull out for years, it was a bad business model and it was only the Australian Government’s continuous willingness to throw money at them that kept them here.

As soon as one bit the bullet they all headed for them thar hills.

In fact I feel sure by the minimal effort shown that Ford with the Falcon would like to finish up manufacturing here sooner rather than later.

As far as the parent companies are concerned.

The US Treasury spent about $50 billion dollars to bail out GM and after selling a series of Stocks in the company they’re currently at a loss of about $10 billion. They still have about $826 million invested in the old GM which is worth little.

The Treasury Department is quoted as saying their investment in GM was never to make a profit but to help save the American auto industry. The bail out of Chrysler was for the same reason and they would have bailed out Ford if necessary but as it transpired, it was in difficulty before that and had financially restructured just before the global financial crisis. All three manufacturers were in trouble before the downturn.

[malazn mafia]

By that token the world is a better place without the USA.

[1TUFFUTE]

Some of you guys don't read much.
You do realise Australia was among the very 'lowest' govco supported car industries in the WORLD!

Another REAL simple to understand, smack in the forehead, slap across the face fact about car industries is that they are so valuable to any country because of the revenue,tax and jobs among many other things that they provide for their country!
it is absolutely nothing for a govco to support a car industry!


Do some research......
I mean we could have payed, what 400mil a year to keep the big three here, and continued gaining from the billion dollars in revenue.

Don't quote me
IMHO
I digress

[Hulsty]

Originally Posted by 1TUFFUTE

Some of you guys don't read much.
You do realise Australia was among the very 'lowest' govco supported car industries in the WORLD!

Another REAL simple to understand, smack in the forehead, slap across the face fact about car industries is that they are so valuable to any country because of the revenue,tax and jobs among many other things that they provide for their country!
it is absolutely nothing for a govco to support a car industry!


Do some research......
I mean we could have payed, what 400mil a year to keep the big three here, and continued gaining from the billion dollars in revenue.

Don't quote me
IMHO
I digress

At least some people like yourself understand!, total government revenue will drop once the companies close up! By some peoples logic we should stop supporting private business! So stop giving cash to private schools and hospitals! yeah right........ One eyed campaign against the car companies!

[CQB-241]

Problem is we, as a nation, never owned our industry. The shenanigans with Commonwealth presses and the Feds in 49/50 with Hartnett (in favour of GMH) saw to that.

The loss will be profound, not just in the loss of the feel good factor of living in a country that makes stuff, but in the flow on effect; loss of suppliers, loss of training in high-scale complex technological manufacturing. Did you know that senior production staff from several leading companies, eg Cochlear, came out of the Australian automotive industry?

Giving foreign companies bulk cash which was often siphoned off to "purchase" " technological transfer" from the parent was a broken model and has cost the community billions. Actually having Government REFUSE to buy anything but Australian made (or at least assembled) may have saved the industry. The level of production by the remaining 3 to keep the component industry viable is 200-220000 per year. All levels of government in Australia take up about a quarter of car and light commercial sales each year in a pool that exceeds 1 million units.....

[Ford17]

The demise of local car manufacturing has had a lot to do with government intervention, which occurs in a free market, but not completely laissez-faire, economy.

While other countries support, protect and nurture their car industry investment, the Australian government effectively dismantled tariff protection by reducing it from 45% to 5% over the past 25 years.

Other countries which still impose import tariffs on non-domestic cars to protect their local manufacturing are: India @ 60-100%, Thailand @ 80%, Brazil @ 35%, and China @ 25%.

The government assistance packages were really only in lieu of the reduced tariff protection, and were always subject to scrutiny, and uncertainty depending on whichever government was in power.

So GM is right, in the sense that that assistance - with which came accompanied by uncertainty and scrutiny - was hardly a model to base their business on.
Just a pity they weren't so forthright in saying so when the heat was on, which this article uncovered.

[DoreSlamR]

Originally Posted by eb2fairmont

realistically holden is in for a bit of a bath once commodore is gone. nothing will replace the sales lost.

Don't worry, there are plenty of GM Daewoo's to fill the void..

[b0son]

Originally Posted by 1TUFFUTE

I mean we could have payed, what 400mil a year to keep the big three here

And the rest. They were playing economic chicken, threatening to pull out unless more and more funds were committed. Only a couple years before the pull-out announcement, Holden had committed to 10 more years, yet 2 years later, they wanted even more money. It had to end at some point.

[Road_Warrior]

The issue is that grants and direct financial assistance weren't supported by rational policy. These lop-sided FTA's are one example. Combine those FTA's with progressive cutting of tariffs meant that nothing was able to survive long term.

Why didn't the Australian government pursue Thailand over their import taxes on Aussie cars after we signed the FTA with them? Same deal with the FTA with the US when an Aussie shipbuilder wanted to compete for US Navy contracts. Oh noooo we can't have that!

Much media hoo-haa was made by the usual suspects over the government funds Holden had received over a 10 year period, but there was total silence over the amount of money Holden spent in Australia in the same period. Which incidentally was 10 times the amount they were given by govco. Wouldn't you rather that money be spent in your own economy than someone else's?

[Gobes32]

Originally Posted by Road_Warrior

Why didn't the Australian government pursue Thailand over their import taxes on Aussie cars after we signed the FTA with them? Same deal with the FTA with the US when an Aussie shipbuilder wanted to compete for US Navy contracts. Oh noooo we can't have that!

Of all the silly decisions made by govco in regards to manufacturing, this is the one that hurts the most. Why do we pretend we didn't get screwed over on these FTA's?

[Bill M]

Originally Posted by galaxy xr8

Gee I got **** canned back in ’09 when I mentioned this exact thing back then about a certain CEO that said the same thing, oh hang on but what would a CEO of a major bank know about it I was told...

I guess he knew more then those that questioned him.

I just found that thread/ post, here it is page 14 post 412.
http://www.fordforums.com.au/showthr...256013&page=14

The banking sector?
Another group that needed bailouts or at least Govt. guarantees to support them.
These are the same bunch that played a significant role in the lead up to the 2008-2009 financial crisis! I would not place too much emphasis on the utterances of one CEO.

[Bill M]

Interesting that Stefan Jacoby thinks he knows what is good for Australia

[Syndrome]

Originally Posted by Bill M

Interesting that Stefan Jacoby thinks he knows what is good for Australia

Septics only ever do what is good for them.

[Pepscobra]

Don't Swedan (Volvo) and Germany still heavily assist their local manufacturing industry?
It's easy to think that if they are not self suffient, they should be left to fail, but it is much more complicated than that. Government assistance to these industries has always been considered as an 'investment' in employment and training.

[Wretched]

Originally Posted by LoudPipes

]I don’t know why people don’t understand the local car industry has wanted to pull out for years, it was a bad business model and it was only the Australian Government’s continuous willingness to throw money at them that kept them here.

This is true. The decision to completely shutdown not only manufacturing but design and implementation of particular cars is not something decide overnight (except Toyota). Whilst it is disappointing to see the end of an era it is something that was inevitable. There are so many variables at play here as to the cause but with sales of local cars over the last few years dwindling to nothing the cost benefit wasn't there for the companies.

At the end of the day these companies are there to make money and if they are not making it in particular areas for periods of time then restructures need to happen. Whilst government subsidies were helping to a point I wonder if they were just delaying the inevitable? With no export plans or expansion plans to justify manufacturing here what are Ford and GMH supposed to do? "Australia has subsidised the manufacturing of vehicles to an extraordinary extent -- $US1885 per vehicle, compared with Sweden ($US297), Germany ($US206) and the US ($US166)" and it would only get higher if we continued the way we're going.

The shutdowns will have an affect but there has been a fairly lengthy lead time for many to transition into other work. As to the impact of the shutdown on other industries, a lot speculation right now. In the mean time the governments and private industry should be looking at ramping up other projects that will be able to absorb some of the impact and provide some further business to the manufacturing industry. We should also be looking at other industries where we can use our land to our advantage to offset the income drop and establish other industries to use the engineering know how (alternative energies, etc).

These shutdowns are a short term loss but if Australia actually gets off its butt and does something to address the impact we'd be able to minimise that impact. We just don't have the proactive forsight to go out and innovate and build, we're too much in the "she'll be right mate" mindset. Now we rank low in many fields that we should be doing better. It is our own fault.

[b0son]

Originally Posted by Pepscobra

Don't Swedan (Volvo) and Germany still heavily assist their local manufacturing industry?

They export, its a wise investment. We didn't, or at least, not nearly enough to justify increasing funding.

[LoudPipes]

I can’t say I’ll ever agree with the Government role in the car industry’s departure and not just for the loss of jobs as there is a long list of manufacturing, service and produce companies and industries that have also not been supported and their employees are no less important than those in the car industry.

What I do find alarming is the future loss of intellectual, technical and engineering skills associated with it and those of the supporting industries. In fact the know how of all industries lost to Australia.

The dumbing down of Australia and its increasing slide down the intellectual ladder compared to our neighbours, allies and competition should be of concern to all Australians.

Last year not one cent, zero, nothing, **** all, zilch was invested in wind energy in Australia.

Can you believe it, in a country with such wide open terra and surrounding oceans not one cent was invested here in this renewable resource as a means to find profitable working solutions for the future.

While the world searches for alternatives to fossil fuel energy we have Governments that keep dirty coal and the mining industries at the top of the agenda at the expense of supporting research and investment in renewable energy and higher education for the masses.

When the world finds solutions Australian will be left behind with almost no industry and if we lose natural heritage sites such as the Great Barrier Reef to climate change then no tourist industry to boot.

So this is not just a problem aligned or unique to vehicle manufacturing, this is the short sightedness of Australians who constantly allow our pollies to govern for the next election and not the future.

I can’t remember much of a protest at the loss of the car industry outside of a bit of complaining in the media and on forums but nothing that could be said that Australians really stood up and cared.

Here’s the link to an article 2 days ago on the lack of renewable energy investment in Australia, we have now fallen behind Panama, Sri Lanka and Myanmar and we are now ranked 39th in the world and if it does happen, we are a country that climate change will hit hard.

http://www.smh.com.au/environment/climate-change/australias-largescale-renewable-investment-dives-in-2014-20150112-12mbis.html

[superyob]

Originally Posted by LoudPipes

I can’t say I’ll ever agree with the Government role in the car industry’s departure and not just for the loss of jobs as there is a long list of manufacturing, service and produce companies and industries that have also not been supported and their employees are no less important than those in the car industry.

What I do find alarming is the future loss of intellectual, technical and engineering skills associated with it and those of the supporting industries. In fact the know how of all industries lost to Australia.

The dumbing down of Australia and its increasing slide down the intellectual ladder compared to our neighbours, allies and competition should be of concern to all Australians.

Last year not one cent, zero, nothing, **** all, zilch was invested in wind energy in Australia.

Can you believe it, in a country with such wide open terra and surrounding oceans not one cent was invested here in this renewable resource as a means to find profitable working solutions for the future.

While the world searches for alternatives to fossil fuel energy we have Governments that keep dirty coal and the mining industries at the top of the agenda at the expense of supporting research and investment in renewable energy and higher education for the masses.

When the world finds solutions Australian will be left behind with almost no industry and if we lose natural heritage sites such as the Great Barrier Reef to climate change then no tourist industry to boot.

So this is not just a problem aligned or unique to vehicle manufacturing, this is the short sightedness of Australians who constantly allow our pollies to govern for the next election and not the future.

I can’t remember much of a protest at the loss of the car industry outside of a bit of complaining in the media and on forums but nothing that could be said that Australians really stood up and cared.

Here’s the link to an article 2 days ago on the lack of renewable energy investment in Australia, we have now fallen behind Panama, Sri Lanka and Myanmar and we are now ranked 39th in the world and if it does happen, we are a country that climate change will hit hard.

http://www.smh.com.au/environment/climate-change/australias-largescale-renewable-investment-dives-in-2014-20150112-12mbis.html

While I do agree with what you say, are the bolded parts fact, assumption or hearsay? Can you provide non-wikipedian evidence?

Disregard climate change please, I have no idea how to unbolden it!

[Road_Warrior]

Originally Posted by Wretched

These shutdowns are a short term loss but if Australia actually gets off its butt and does something to address the impact we'd be able to minimise that impact.

Not going to happen. Look at what is happening right now to naval shipbuilding. Look at what has happened to our heavy engineering capacity for resources projects for the North-West Shelf. We're even importing bananas.

We're destined to be a quarry with side businesses of drycleaning, coffee shops, and tourism charters and no one seems to give a stuff.