The prolonged death of Australian Auto Manufacturing

[dirtyclevo]

I think tony abbott has sort of noticed this.

is that why he's pushing the "australia is open for business" ?

whats he mean by that? manufacturing, or to sell everything off?

[2011G6E]

When you've got less people in your country than some big cities overseas, it's sometimes better economic sense to admit that it's just too costly to produce an item...cars for instance...in your own country when you could do what many countries do and pick and choose the best the world has to offer.

Making cars here only really made sense back in the old strongly protected days when they sold to a "captive audience" of gullible buyers who honestly thought that the world couldn't produce a better car than a local Holden or Falcon. Once the barriers started to drop and people were exposed to that foreign stuff, things started to change, and so they should have. Strongly protect any local industry and there's a huge danger they'll become complacent and know that they don't have to try any harder because the public will just do what dad did and his dad did and buy a Holden or Falcon without thinking too hard about it.

There's also the fact that we haven't really had a "local car industry"...we've just had small, very small, local arms of large American corporations.

[Franco Cozzo]

Originally Posted by EF_6

The trick will be surviving these closures and being employed in an industry that gives you stabiltiy.....I'm thinking Broadmeadows will become a mini Detroit when they close those doors.

It will probably be Geelong before it happens to Broadmeadows, because Geelong is a bit isolated and it has already been abandoned by a few businesses in the last few years, unless you want to work in CBD as a white collar worker as they have a very good rail line into Southern Cross Station.

There just isn't too much work out that way at the moment.

Its about 80KM out of Tullamarine which is one of Melbourne's industrial hubs which is a bit far out for people who live in Geelong to travel there.

Broadmeadows is already a ghetto anyway lol.

[gtfpv]

WHAT a sad state of affairs . I'm very sad that i was born in what i consider one of the best countries in the world , to one of the dumbest and one with no back bone or culture .
HOW could this have been done to our beautiful country . the worst part is its drifing down towards the waterfall .

[dirtyclevo]

globalism.

australia's got an identity, but now you have to leave the cities to see it.

[Nic302ef]

im a lil scared for the future of this country too.

One of the major reasons for the local manufacturing in the automotive to begin was it was more cost effective, "was", also the product from over sea's wasnt able to handle our rough roads and extreme heat conditions. Imported products have come a fair way, some..... not all.

[Crazy Dazz]

Originally Posted by 2011G6E

When you've got less people in your country than some big cities overseas, it's sometimes better economic sense to admit that it's just too costly to produce an item...cars for instance...in your own country when you could do what many countries do and pick and choose the best the world has to offer.

Not the point.
As I've said, I'm not advocating a return to the days of producing small numbers of costly unique cars for local consumption.
And, at the end of the day, if it makes the most sense for Australia to not make cars, but to make "X" instead, I'm fine with that.
But WTF IS "X"?
I'm talking about productive employment, and we are losing it every day.
EVERYONE needs to ask themselves these questions:
What is MY job?
Can my job be outsourced overseas? (because if it can, it WILL be.)
If not, will my job still be required and adequately remunerated when unemployment is at 30%, nobody has any money to spend, and the government is bankrupt?

THEN ask those same questions for your kids.

If you work in a service industry (or for the government) you need to understand that you only get paid as long as their are people to pay for the service.

[b0son]

As far as car manufacturing goes, it was the beginning of the end the moment our local manufacturers became foreign-owned. The only cars we were allowed to build here were the ones that couldn't be sourced elsewhere, or that had no market elsewhere. They could have survived a while longer if they'd been allowed to make vehicles that the people wanted, but instead, had to keep pouring ever more development dollars into a platform that had no future.

[2011G6E]

Originally Posted by Crazy Dazz

Not the point.
As I've said, I'm not advocating a return to the days of producing small numbers of costly unique cars for local consumption.
And, at the end of the day, if it makes the most sense for Australia to not make cars, but to make "X" instead, I'm fine with that.
But WTF IS "X"?
I'm talking about productive employment, and we are losing it every day.
EVERYONE needs to ask themselves these questions:
What is MY job?
Can my job be outsourced overseas? (because if it can, it WILL be.)
If not, will my job still be required and adequately remunerated when unemployment is at 30%, nobody has any money to spend, and the government is bankrupt?

THEN ask those same questions for your kids.

If you work in a service industry (or for the government) you need to understand that you only get paid as long as their are people to pay for the service.

Good points. Love the question "But WTF is X?". Hit the nail right on the head. We're in a perilous position in the world...we're a tiny western first world democracy with a great standard of living, plonked right amongst tightly packed countries with a total of a couple of billion people not that far away from us in the region with a lower standard of living and economies of scale in production that make us look like a joke. There's literally no way we can "compete" fairly with the hordes to our north, despite our governments here over the years smiling and signing "free" trade agreements with them.

Australia does best at things that people now cringe and laugh at..."living off the sheeps back" and digging crap up and sending it overseas. Oh sure, there are technical and scientific things we do in an excellent way as well, but they're small fry.

So what IS "the next big thing" that will create and more importantly maintain high levels of employment? I don't know.

[rdmr]

Originally Posted by 2011G6E

There's also the fact that we haven't really had a "local car industry"...we've just had small, very small, local arms of large American corporations.

Not this **** again. Your so far off the mark it's not funny. I'm outa here.

[CyberWasp]

The 'next big thing' is the Space Industry.
Look at how much the airline / tourist / cargo / hospitality ect ect industries employ.
What country is going to put their hand up and get people into orbit, the moon and mars, generating employment and technology.
Being a country that specialises in mining may not be such a bad thing if the process of mining is taken to the moon or asteroids for rare materials that are not found on earth.
All we need is a leader with vision.
My last sentence was the most fanciful.

[vztrt]

One thing to remember Ford Oz at least is still doing big R&D here. The R&D is where the money is (manufacturing isn't all that much in comparison but it does produce more jobs). If FoA could get another Ranger/Everest contract then that would get interesting.

[SpoolMan]

Here is a 4 Corners story on Australian car manufacturing in my view the best investigative journalism.

End of the Road 45 min
Reporter Stephen Long looks at what the real impact will be as the car industry heads to the end of the road.

http://www.abc.net.au/4corners/stori...14/3982809.htm
Looks at everything, key points, only 8 to 10% of car manufacturing are labor wage costs.
200,000 job losses.
England went down a similar path, now there biggest export is car manufacturing.

[Wretched]

Originally Posted by SpoolMan

Here is a 4 Corners story on Australian car manufacturing in my view the best investigative journalism.

End of the Road 45 min
Reporter Stephen Long looks at what the real impact will be as the car industry heads to the end of the road.

http://www.abc.net.au/4corners/stori...14/3982809.htm
Looks at everything, key points, only 8 to 10% of car manufacturing are labor wage costs.
200,000 job losses.
England went down a similar path, now there biggest export is car manufacturing.

This is also a good doco on how the Brits coped with imports, how their industry collapsed and how they brought it back.

http://www.youtube.com/watch?v=JPhlZYiEkQY

[aussiblue]

I have to ask but how can a death be other than prolonged? Sorry couldn't resist that cheap shot:-) Was it the prolonged death throes perhaps.

OK onto topic. Even as an economist I can't agree with the way we have bowed to the US self interested global free market propaganda while they continued to protect their home farmers and industries.

Similarly I don't agree with allowing cheap tariff free imports from places like China and South Korea where they have suppressed the democratic labour movement to keep costs down (see http://www.ituc-csi.org/internationa...unions?lang=en re Korea). Their prices are artificially low as a result of undemocratic suppression of the free labour movement.

I also disagree with the dual standards where we let China buy into Australia when it's illegal for Australia to buy land in Australia etc.

Again I also disagree with selling of our minerals cheaply for the short term profits of their often foreign owners. We should tax these exports higher; yes sales will decrease in the short term but in the long term we will still have it here to sell later at a higher price for the benefit of future generations.

But unfortunately the average Australians are also are very much to blame. Most Australians look down on Holdens and Falcons seeing them as of inferior quality (they are not) and associated with the bogan fringe (yes but why?). Perhaps its just about older Australians naturally modest personalities and reluctance to self promote and a desire of the younger generation to be more brand conscious and to have the in shoe and car brands. It may be an impact of the cyber age where we are more exposed to overseas marketing and where Falcons and Holdens don't feature but "international" models do. Perhaps also overseas facebook or twitter friends can't relate to Holdens or Falcons and you need to buy a Merc or BMW to impress.

Yes; key and difficult issues we have for any manufacturing is a extremely small home market (lets learn from the US history an encourage increased immigration) and higher that competitors shipping costs - we are a long way away from any large export market.

I think Oz car manufacturers should have focussed more on speciality vehicles that were always going to have relatively low world production numbers - e.g. Mitsubishi might have been more successful if the had made 4WD vans here (for OZ and the relatively low volume export market) rather than large cars. Perhaps Ford and Holden with their RWD expertise (and the latter did to an extent) should have focussed on the world police car a taxi markets and made speciality vehicles to suit them rather than focussing on a shrinking segment of the Oz market.

In any event it's too late and the current Government is moving more to laissez faire (policy of minimum governmental interference in the economic affairs of individuals and society) so it will get worse not better. Not only will the OZ manufacturing industry shrink but the resulting unemployed will be left to fend for themselves.

PS I should admit a bias; as well being an economist and an accountant I was also a very active union delegate and councillor (no not a militant unionist but a moderate who was involved due to my idealist philosophical beliefs of unionism as a fundamental support of democracy - Government's find it more difficult to manipulate union rights than they do the right to vote and unions historically have been significant forces in overthrowing oppressing regimes, dictatorships and the like).

[aussiblue]

But unfortunately the average Australians are also are very much to blame. Most Australians look down on Holdens and Falcons seeing them as of inferior quality (they are not) and associated with the bogan fringe (yes but why?). Perhaps its just about older Australians naturally modest personalities and reluctance to self promote and a desire of the younger generation to be more brand conscious and to have the in shoe and car brands. It may be an impact of the cyber age where we are more exposed to overseas marketing and where Falcons and Holdens don't feature but "international" models do. Perhaps also overseas facebook or twitter friends can't relate to Holdens or Falcons and you need to buy a Merc or BMW to impress.

And after watching the BBC video re the UK v German car industry I have to also therefore conclude perhaps in parts it reflects a failure of our OZ car makers to understand that people buy cars for self image and abstract perceptions and that they didn't match that market with either the advertising or perhaps the product.

If our cars defined us; for many Holden and Falcon is and was perceived (albeit sometimes wrongly or at least subjectively) as about V8 racing, hoons, bogans and accidents and police pursuits involving stolen cars. The local industry's adverts never tried to change that perception and perhaps to do so they even needed to risk moving away from those traditional "no status" Falcon and Commodore names (and also risk losing the shrinking market that identified with an image [perhaps another more positive image] they associated with those brands).

[aussiblue]

This sort of thing in the newspaper every other week http://www.news.com.au/national/west...-1226939642117

A man was seriously injured when he was involved in a high-speed police chase which ended when the car hit a tree in Mirrabooka and rolled onto its roof.

doesn't exactly create a positive image association for the Holden or Falcon brand. Difficult one to address though.

[CyberWasp]

May I ask, what was the turning point in England after they hit rock bottom, to get them back to where they are today?

[BENT_8]

Originally Posted by 2011G6E

Good points. Love the question "But WTF is X?". Hit the nail right on the head. We're in a perilous position in the world...we're a tiny western first world democracy with a great standard of living, plonked right amongst tightly packed countries with a total of a couple of billion people not that far away from us in the region with a lower standard of living and economies of scale in production that make us look like a joke. There's literally no way we can "compete" fairly with the hordes to our north, despite our governments here over the years smiling and signing "free" trade agreements with them.

Australia does best at things that people now cringe and laugh at..."living off the sheeps back" and digging crap up and sending it overseas. Oh sure, there are technical and scientific things we do in an excellent way as well, but they're small fry.

So what IS "the next big thing" that will create and more importantly maintain high levels of employment? I don't know.

Well don't you think an answer to that question should come before we make excuses for our current manufacturing demise.
Isn't that what intelligent people would have, a plan 'B' before plan 'A' is abandoned?

Like I said before, the problem with this country is that everything Australians believe to be right must be because they thought of it.

Your previous post is exactly why the manufacturing industry is free to pack up and leave without fear, because people like you explain the economics of their decision and its importance to an American Corporation whilst failing to recognise the economics and importance of our manufacturing workforce.

I would also go out on a limb and assume everyone who 'likes' your previous post doesn't rely on manufacturing to feed them either.

[2011G6E]

Originally Posted by rdmr

Not this **** again. Your so far off the mark it's not funny. I'm outa here.

Really...so the "GM" part of "GMH" has disappeared completely has it? "Ford Australia" isn't in any way linked to that big company in the USA that happens to share the same name and also make cars...?

...sure it has...

Originally Posted by CyberWasp

May I ask, what was the turning point in England after they hit rock bottom, to get them back to where they are today?

A couple of things. Thumbing their nose pretty much at the EU helped. Back before that though the unions who were stupidly militant over there (and which cannot in any way be compared to unions here that some people might think are "militant". The English ones were several levels of magnitude above anything we have ever seen here) helped kill their car industry.
However, they had the luck to have very old well respected brands to fall back on...Jag, Aston, some others...and a national psyche that had a long, long history of thinking...and knowing...that they could build the best in the world and beat outrageous odds against them.

Australia is a newcomer on the world stage. We're still reasonably young in the big international scheme of things. Manufacturing everything here worked...and worked well...however you have to realise that this was back when "Jap Crap" was an accurate descriptive and goods took a long time to get here from anywhere, so we pretty much had to make everything here.

Once an international trade in goods got faster and better, and the quality of those imported goods got better, it was the beginning of the end of our tiny industries here.
Basically, we're just not big and powerful enough to throw our weight around on the world stage like some people seem to think we should be able to...but unfortunately we are surrounded by countries that are.

Sorry, but don't shoot the messenger...

[aussiblue]

May I ask, what was the turning point in England after they hit rock bottom, to get them back to where they are today?

Watch the video referred to. As suggested by the video it was complex and varied but in part it is claimed it was due to the:

a) Take over of the British car industry by the Germans and other foreign companies with better management and marketing.
b) New owners who treated the workers with respect, involved them in management and moved away from the old UK class paradigm that treated engineers and factory workers as less than equal yobbos (and then could not understand when subsequently some of the workers behaved as they were thus expected to).
c) Recognition that they no longer had a captive market based on the English empire and they had to market cars and address or change buyers' self image expectations/needs.

So, perhaps not all the lessons are transferable to the Oz situation. Some of the reason for the failure of the original UK industry and the success of the German industry might be though and some of it was about a country that had won a war with the benefit of a industry that made the spitfire etc and had a perception the were invincible V one that had lost and needed to recover. So the motivation to succeed was a factor and perhaps with US and Japanese owned Oz manufactures there are/was no national pride motivators at the top overseas management level. Indeed I guess the decisions about closing Oz manufacturing was initially really about ensuring the success of, or reducing the risk for, US Ford and GM; success of an Oz industry would never have been a prime motivator of either company in their US Head office. If they were companies that were wholly owned and based in Australia the motivation would have been to succeed in OZ or fail completely (which might still have lead to moving manufacturing to Thailand etc.).

[SpoolMan]

Originally Posted by CyberWasp

May I ask, what was the turning point in England after they hit rock bottom, to get them back to where they are today?

Watching the 4 corners story, they needed to manufacture something without some sort of manufacturing the fallout and flow on effect is huge and there Government seen this.
What you see in the story without Government giving a helping hand its hard for any business to create a large amount of jobs in manufacturing, if we don't make something where will our Country's income come from once the mining is done and dusted.
The Nissan Dualis made in Sunderland England and still sold here at budget prices.

[GASWAGON]

Notice in that 4 corners artcile the guy that has been at Holden for 32 years was driving a Toyota Corolla to work.....How does that work???

[rdmr]

Originally Posted by 2011G6E

Really...so the "GM" part of "GMH" has disappeared completely has it? "Ford Australia" isn't in any way linked to that big company in the USA that happens to share the same name and also make cars...?

...sure it has...

We were never outcrops, we still are not. We produce cars that are not produced anywhere else on the planet. Designed here, developed here, fanatically followed here. Australian car companies have done this for decades, whether they be Holden, Ford or other.
Someone may pull the strings at times sure, as those strings are now cut. But we never had to ring detroit on the shop floor at 8am to ask what we were doing at 10am.
We had a car industry mate, still do, so wise the **** up and don't insult those that build the vehicles.

[dirtyclevo]

IN THE UK.

the government really pushed for it. i remember it being in there news for months back in 2009-2010. they were doing deals, making plans, commitments etc. etc..

The difference between here and the uk is

the uk wants to make things, and the government is fully behind it. and the majority of british people like buying british made. they have pride in there manufacturing industry.

Australia says its behind australian manufacturing, but you cant see it.

In the last four years car production in the uk has increased by 50%.


this link is what they make in the uk.

http://www.theaa.com/motoring_advice...n-britain.html


I think thats what tony abbott is trying to do with this "open for business" thing.

but everyone's a little weary whether that means, buy all our things/land. or invest here with your company.

Wages in the uk are similiar to ours but there auto industry is booming? so what are we doing wrong? they export the cars they build. meaning large scale manufacturing, not just for the local market.

[BENT_8]

Originally Posted by EF_6

Notice in that 4 corners artcile the guy that has been at Holden for 32 years was driving a Toyota Corolla to work.....How does that work???

Could it be possible that he doesn't buy new cars?

Or perhaps he has a new SS in the shed and drives the second hand corolla to save fuel.

Or perhaps he has down sized as he see's what his future will look like.

I too noticed the Corolla and my first thought was, someone on AFF will make a point of it.

[BENT_8]

I love all the talk of moving manufacturing forward with new advances and technologies.
Someone said to look at space travel.

Can someone please explain why these new industries would choose stay in Australia when they can just up and move to Thailand at anytime too.

The company that was mentioned in the 4 corners article, Redarc.
They took on many of Mitsubishi's redundant workforce on the back of Government incentive.
What stops them from moving offshore at anytime.

Australia, nurturing business ideas for Asian manufacturing since 2013.

[dirtyclevo]

Originally Posted by BENT_8

I love all the talk of moving manufacturing forward with new advances and technologies.
Someone said to look at space travel.

Can someone please explain why these new industries would choose stay in Australia when they can just up and move to Thailand at anytime too.

The company that was mentioned in the 4 corners article, Redarc.
They took on many of Mitsubishi's redundant workforce on the back of Government incentive.
What stops them from moving offshore at anytime.

Australia, nurturing business ideas for Asian manufacturing since 2013.

the best thing about manufacturing in asia from a foreign automakers perspective is that can pay them peanuts. thus more profit.

so with this in mind. why is it doing so well in europe and the usa? because some export majority of there products. or some just have a large sales.

[gtfpv]

Originally Posted by BENT_8

Well don't you think an answer to that question should come before we make excuses for our current manufacturing demise.
Isn't that what intelligent people would have, a plan 'B' before plan 'A' is abandoned?

Like I said before, the problem with this country is that everything Australians believe to be right must be because they thought of it.

Your previous post is exactly why the manufacturing industry is free to pack up and leave without fear, because people like you explain the economics of their decision and its importance to an American Corporation whilst failing to recognise the economics and importance of our manufacturing workforce.

I would also go out on a limb and assume everyone who 'likes' your previous post doesn't rely on manufacturing to feed them either.

YEP I COULDNT AGREE WITH YOU MORE BENT 8 , PEOPLE IN THIS COUNTRY NOW COP A SWIFT KICK UP THE *** , and turn around and justify it .
That attitude means more can be taken away . soon people will be loosing everything and tyurning around and justifying it as it's was a good thing .
The people in this country now want to lose and deserve they should .

[BENT_8]

Originally Posted by dirtyclevo

the best thing about manufacturing in asia from a foreign automakers perspective is that can pay them peanuts. thus more profit.

so with this in mind. why is it doing so well in europe and the usa? because some export majority of there products. or some just have a large sales.

Any company can set up in Asia and profit from it, even an Australian company which is why I ask...

What makes us think that any company will hang around in Australia once it is established, when they can increase profits by moving to Asia.

The precedence has been set, dump Australian jobs in favour of increased profits from Asia.

We are in a unique situation where we have 3 years to warm to the idea of the Auto industry closing.
Within 6 months of the last door closing that sentiment will cool quickly and reality will kick in, no doubt.