An unfair playing field – the state of our car industry, by FAPM

[turbodewd]

Originally Posted by Crazy Dazz

One of the fundamental problems you have is this:
Blue Collar Industry workers (particular those in Victoria & SA) typically vote Labour, so realistically unless they are prepared to shift their allegiance en mass, the Liberals don’t give a ****.
Unfortunately the Labour party has always drawn its support from two key areas, the aforementioned blue collar workers, and the Gay Vegan Hippies. Unfortunately that slice has now been taken by the Greens, which is why you so often see Labour losing seats on the Primary Vote but winning on Green preferences. So much so that what you now have is effectively a coalition Labour/Green government.

And if there is one thing that Greenies HATE more than cow exports, it is the personal motor car. And in fact industry in general. They are a disgusting bunch of hypocrites, because they will happily see us buying **** made in despicable factories in China, just so long as none get built in Tasmania.

Mate, the ACT govt is a prime example of the new Labor - its got a real Green streak.

Now we all care for the environment, noone wants pollution. But they tend to get zealous in the pursuit of 'green' even when its virtually meaningless. ACT government has a very low % of AU-made cars AND we have a Green-oriented stamp duty system. However this doesnt mean shtt because SUV and pickup sales (Ranger, etc) are higher than ever.

[SB076]

Originally Posted by bobthebilda

Its the same principle that we get really cheap gas out of the north west shelf, or we get reasonable cheap oil out of bass strait, but we dont pay those cheap prices at the bowser. We pay what ever someone else in the world is willing to pay for it. If it costs BHP $50 to get a barrel of oil out of bass strait, we arent going to pay $50 plus costs at the bowser, we are going to be paying whatever BHP thinks they can get on the world stage plus costs. Same with food. If we make a tonne of wheat for $1000, and the farmer can sell it here for A$1000 or to the US at US$1000 it wont be an issue if both at parity. If OZ dollar slumps if half and he can sell it here for A$1000 or US$1000, then the farmer is going to get twice as much ozzy dollars for selling it at $US.

Ok to keep it really straight forward (and yes feel free to adjust for inflation) The Aussie dollar since 2009 has appreciated by approx 60% Have you seen a reduction of all your costs by a similar amount????

Originally Posted by bobthebilda

Your statement does what the pro protection people do, confuse one with the other. The Australian Automotive Industry is not the Australian Manufacturing Industry. Yes we would be truly stuffed if the manufacturing industry ran itself like the automotive industry. Last time I checked, the Australian Engineers association claimed it had over 100,000 members, I suspect a teeny weeny weeny weeny number of those work for the auto manufacturers (or suppliers). And you do realise that for the 15,000 people that are employed by the auto manufacturers and suppliers, there are 12 -14 million other Australians doing similar things on a daily basis. A person opening a box of imported car parts to fit to a cruze, has no greater skills
than a person opening a box of imported t shirts at Big W (they just think they dont have to work as hard)

Again Bob facts are not relevant - 15,000 people work in the auto manufacturers and suppliers???? Where do you get your information from? FAPM has it at over 45,000 and then there are plenty of tier 2 and 3 suppliers who wouldn't be included in those figures. I suspect your teeny weeny weeny weeny claim is very very wrong. Plus you need to understand the relationship between industries and different industry types. If the automotive industry was to leave Australia this would have impacts on a lot of other industries (directly and indirectly) Again - try to get access to a modern manufacturing plant or automotive manufacturer to get an understanding of what actually does happen.

[bobthebilda]

[SB076;4704646]Ok to keep it really straight forward (and yes feel free to adjust for inflation) The Aussie dollar since 2009 has appreciated by approx 60% Have you seen a reduction of all your costs by a similar amount????

Appreciated against what? The $US? I cant remember the last time I purchased something that was made in the US. But if you were using the $US as a generalisation, then it may have appreciated by 60% since 2009 (but that was a very selective year - ie ozzy crashed due to aftermath of GFC). but its only up 20% from 2008, up 25% from 2007.

Again Bob facts are not relevant - 15,000 people work in the auto manufacturers and suppliers???? Where do you get your information from? FAPM has it at over 45,000 and then there are plenty of tier 2 and 3 suppliers who wouldn't be included in those figures.

The Australian Auto manufacturing industry is currently on track to make 180,000 to 190,000 cars this year. You believe that this results in 45,000 people being employed as a result? 180,000/ 45,000 = 4. your sums are indicating that for each employee employed in the auto manufacturing industry will result in 4 cars being made. Now consider that over 100,000 of those cars will be $15,000 (wholesale priced) cruzes or $20,000 (wholseale priced) camrys (local or exported), then I would conservatively say that the average wholesale price for a car being made in Australia is no more than $25,000. Thus each employee (whose average wage would be north of $50,000), accounts for $100,000 of turnover. No manufacturing industry survives on those figures (sort of doesnt leave alot of money to pay for supplies, rent,electricity etc after you pay the employee).

I suspect your teeny weeny weeny weeny claim is very very wrong. Plus you need to understand the relationship between industries and different industry types. If the automotive industry was to leave Australia this would have impacts on a lot of other industries (directly and indirectly) Again - try to get access to a modern manufacturing plant or automotive manufacturer to get an understanding of what actually does happen.

Thanks for your great insight, but after 26 years working in the manufacturing industry (and sort of still there), and quite a few years in the auto manufacuring industry, I am fully aware that the Auto manufacturing could die tomorrow and apart from a few major headlines in the papers for a few weeks, life will continue as per normal. It would even allow all the "end of worlders" to bring their supplies of canned food out of their bunkers, and to see the light (so to speak)

[Bill M]

Originally Posted by SB076

FAPM has it at over 45,000 and then there are plenty of tier 2 and 3 suppliers who wouldn't be included in those figures. I suspect your teeny weeny weeny weeny claim is very very wrong. Plus you need to understand the relationship between industries and different industry types. If the automotive industry was to leave Australia this would have impacts on a lot of other industries (directly and indirectly) Again - try to get access to a modern manufacturing plant or automotive manufacturer to get an understanding of what actually does happen.

Exactly!

The Engineering concern I worked for recently supplied the automotive sector, defense, mining, bio medical manufacturing and aerospace to name a few.
All these industries have benefited from the Automotive sector and vice versa. It helps to be in it to fully appreciate and understand it. Having moved to another branch of manufacturing
it is not surprising to find many of one's colleagues have done time in the automotive manufacturing sector!

[Bossxr8]

Originally Posted by bobthebilda

The Australian Auto manufacturing industry is currently on track to make 180,000 to 190,000 cars this year. You believe that this results in 45,000 people being employed as a result? 180,000/ 45,000 = 4. your sums are indicating that for each employee employed in the auto manufacturing industry will result in 4 cars being made. Now consider that over 100,000 of those cars will be $15,000 (wholesale priced) cruzes or $20,000 (wholseale priced) camrys (local or exported), then I would conservatively say that the average wholesale price for a car being made in Australia is no more than $25,000. Thus each employee (whose average wage would be north of $50,000), accounts for $100,000 of turnover. No manufacturing industry survives on those figures (sort of doesnt leave alot of money to pay for supplies, rent,electricity etc after you pay the employee).

Not all of those 45,000 actually work for suppliers who build parts for Ford, Holden and Toyota. Many of them also export and do work for other manufacturers. And there's a good chance that if they lose their local supply business they will also lose their export business too if they depend on local supply contracts to keep their doors open.

[Crazy Dazz]

This is a FORD forum, so it’s hardly surprising that we should be focussed on the AUTO industry, but even so it is widely acknowledged as a great “litmus test” for the health of the manufacturing industry as a whole.
I'm not interested in saving JUST the auto industry, I want to see the government save Australian Manufacturing, period. What these ostriches don’t realise is just how much is under threat. I recently worked on a project where concrete blocks were imported from Thailand, and the entire “Port” was built on a barge in China and towed here. It won’t be long before every single item that goes into your home (including the bricks and roof-trusses) will be imported. Need some steal fabricated? Order in online and the Chinese will make it and ship it for a fraction of the cost. One of the consequences is already being felt by the retail sector; if something is made in China, why buy it from an Australian supplier? Even the building trades will eventually suffer because nobody will have the money to build houses. (Except in Perth.)
Sure, you can still opt for a career in the services sector, but who’s going to pay you?

And whilst I don’t want to start another debate, some people in Victoria need to understand the extent to which their lifestyle is subsidised by the Mining, Oil, & Gas Industry. Those industries contribute Billions in taxes and royalties, which is then disproportionately given to the more populous states. Demand for those commodities also drives the dollar up, and subsidises all those cheap imported goods we love. I'm not saying “the boom is going to end,” but over time things will normalise. Life in Perth will go back to “normal” but life in Victoria without a manufacturing industry is going to be tough.

It’s not just the “hard” manufacturing industries either. We still get a lot of our processed food products from SE Australia, but that is changing. Even “fresh” vegetables are now being brought in from SE Asia.

[turbodewd]

bobthebilda,

can you explain to me why the ACT government should be buying a Kluger over a Territory? Or a Kia over a Cruze. I would expect the ACT government buys more than 50% Australian and I dont think they do.

I will remind you that government is not averse to spending money even if the dollars & cents dont explicitly deliver a monetary outcome. So any value argument you concoct falls over. The ACT government spends money on public art and is giving the GWS Giants $20 million over 10 yrs to play at Manuka Oval. $20 million!

[DJM83]

Originally Posted by turbodewd

bobthebilda,

can you explain to me why the ACT government should be buying a Kluger over a Territory? Or a Kia over a Cruze. I would expect the ACT government buys more than 50% Australian and I dont think they do.

I will remind you that government is not averse to spending money even if the dollars & cents dont explicitly deliver a monetary outcome. So any value argument you concoct falls over. The ACT government spends money on public art and is giving the GWS Giants $20 million over 10 yrs to play at Manuka Oval. $20 million!

How do you know the 'investment' in AFL wont bring a decent return?

Maybe the other makes offered a better deal for the purchases, do you know how much it costs them to buy Toyotas instead of Fords? I doubt it. I mean if they can purchase other makes cheaper then why would they purchase Australian cars, i mean id like to see them in Aussie cars but why spend more money than they have to?

[bobthebilda]

Originally Posted by turbodewd

bobthebilda,

can you explain to me why the ACT government should be buying a Kluger over a Territory? Or a Kia over a Cruze. I would expect the ACT government buys more than 50% Australian and I dont think they do.
!

For exactly the same reason that Victorian power generators use the dirtiest of fossil fuels (brown coal), instead of importing better coal from NSW or Queensland. Price.

For the same reason that 90% of Australian car buyers (and I know this may come as a shock, some are actually smarter than ford forum members), buy imported cars. Price and quality.

Probably for the same reason that everyone comes up with the excuse each month to try and explain Fords low sales. Availability.

[302 XC]

Originally Posted by Crazy Dazz

This is a FORD forum, so it’s hardly surprising that we should be focussed on the AUTO industry, but even so it is widely acknowledged as a great “litmus test” for the health of the manufacturing industry as a whole.
I'm not interested in saving JUST the auto industry, I want to see the government save Australian Manufacturing, period. What these ostriches don’t realise is just how much is under threat. I recently worked on a project where concrete blocks were imported from Thailand, and the entire “Port” was built on a barge in China and towed here. It won’t be long before every single item that goes into your home (including the bricks and roof-trusses) will be imported. Need some steal fabricated? Order in online and the Chinese will make it and ship it for a fraction of the cost. One of the consequences is already being felt by the retail sector; if something is made in China, why buy it from an Australian supplier? Even the building trades will eventually suffer because nobody will have the money to build houses. (Except in Perth.)
Sure, you can still opt for a career in the services sector, but who’s going to pay you?

And whilst I don’t want to start another debate, some people in Victoria need to understand the extent to which their lifestyle is subsidised by the Mining, Oil, & Gas Industry. Those industries contribute Billions in taxes and royalties, which is then disproportionately given to the more populous states. Demand for those commodities also drives the dollar up, and subsidises all those cheap imported goods we love. I'm not saying “the boom is going to end,” but over time things will normalise. Life in Perth will go back to “normal” but life in Victoria without a manufacturing industry is going to be tough.

It’s not just the “hard” manufacturing industries either. We still get a lot of our processed food products from SE Australia, but that is changing. Even “fresh” vegetables are now being brought in from SE Asia.

90 % of all Australians cant go 1 day in their life without 90 % influence of imported products .....
That's the sad part
Written on my imported laptop,sent via an imported wireless device, while sitting on my imported chair at my imported desk ,while drinking my imported beverage in my imported cup ,while listening to my imported headphones with tunes down loaded by my imported laptop on my imported ipod

[SB076]

Originally Posted by bobthebilda

Appreciated against what? The $US? I cant remember the last time I purchased something that was made in the US. But if you were using the $US as a generalisation, then it may have appreciated by 60% since 2009 (but that was a very selective year - ie ozzy crashed due to aftermath of GFC). but its only up 20% from 2008, up 25% from 2007.

US is always used as the benchmark currency - fine grab what ever figures you want have you seen a decrease in the cost of everything (as you suggested previously) by 20%

Originally Posted by bobthebilda

The Australian Auto manufacturing industry is currently on track to make 180,000 to 190,000 cars this year. You believe that this results in 45,000 people being employed as a result? 180,000/ 45,000 = 4. your sums are indicating that for each employee employed in the auto manufacturing industry will result in 4 cars being made. Now consider that over 100,000 of those cars will be $15,000 (wholesale priced) cruzes or $20,000 (wholseale priced) camrys (local or exported), then I would conservatively say that the average wholesale price for a car being made in Australia is no more than $25,000. Thus each employee (whose average wage would be north of $50,000), accounts for $100,000 of turnover. No manufacturing industry survives on those figures (sort of doesnt leave alot of money to pay for supplies, rent,electricity etc after you pay the employee)

No I stated the Australian Automotive industry employee's 45,000 (figures from FAPM) You have failed to take into account that some of those jobs manufacture components which are exported so your figures are wrong. When it comes to Bob "facts" or FAPM facts I know which I would believe. Would like to know where your figures came from in regards to Wholesale prices??? Since when did Holden make 100,000 cruzes?

Originally Posted by bobthebilda

Thanks for your great insight, but after 26 years working in the manufacturing industry (and sort of still there), and quite a few years in the auto manufacuring industry, I am fully aware that the Auto manufacturing could die tomorrow and apart from a few major headlines in the papers for a few weeks, life will continue as per normal. It would even allow all the "end of worlders" to bring their supplies of canned food out of their bunkers, and to see the light (so to speak)

I am in manufacturing myself and I am surprised that you fail to see the link between the automotive industry and the manufacturing industry. I too am aware the industry could disappear tomorrow - however should that happen Australia will be a poorer place as a result.

[bobthebilda]

SB076;4709616]US is always used as the benchmark currency - fine grab what ever figures you want have you seen a decrease in the cost of everything (as you suggested previously) by 20%

I still dont know how the US dollar being a benchmark currency affects anything, unless the origin of a particular part comes from the US or it comes from a country that has its currency pegged to the $US. Maybe you can explain.

i say

Now consider that over 100,000 of those cars will be $15,000 (wholesale priced) cruzes or $20,000 (wholseale priced) camrys (local or exported),

You say - Since when did Holden make 100,000 cruzes?

I could argue with you all you like, but first we need to get your Dyslexia fixed.

[jpd80]

Just a thought but if Ford actually managed it's global product imports better,
maybe they wouldn't be in such a fix with finding cash to fund Falcon and territory...

[Uncle Tone]

Why can't we just buy the cars that are made here for the same price that they are sold overseas, as in the US?

$55k holden over here is a $40k Chev over there? I still don't understand why that is.

You'll probably find that the car industry would be fine if we could do that.

[SB076]

Originally Posted by bobthebilda

I still dont know how the US dollar being a benchmark currency affects anything, unless the origin of a particular part comes from the US or it comes from a country that has its currency pegged to the $US. Maybe you can explain.

Choose other currencies if you want, I am not fussed, however the US is still our second largest supplier of imported goods. To add to that Australia's import more oil and oil related products than anything else (oil sold in USD)

I am still curious as to where you get your "facts" from as they are different than that shown by organisations such as FAPM. Yes I missed the "or" in your statement about Cruzes - must admit given some of your other posts regarding wholesale costs of vehicle, the number of people employed in the industry I figured it was about as close to Bob "facts" as all your other posts..

[jpblue1000]

Originally Posted by Uncle Tone

Why can't we just buy the cars that are made here for the same price that they are sold overseas, as in the US?

$55k holden over here is a $40k Chev over there? I still don't understand why that is.

I think you will find as a percentage of income the cars are the same price or very similar. Median income in the us is 50-55K in Australia its 65-70K. thus whats 55K here is really in affordability terms is 40K there.
Thats irrespective of exchange rates

JP

[302 XC]

Originally Posted by jpblue1000

I think you will find as a percentage of income the cars are the same price or very similar. Median income in the us is 50-55K in Australia its 65-70K. thus whats 55K here is really in affordability terms is 40K there.
Thats irrespective of exchange rates

JP

That could be true if the average wage was that amount here,go take the over paid mining workers salary from the average ,and youll be shocked what the real mans wage is
I only know a very small minority non mining workers who get anywhere near 65 K a year
Its funny nearly 10 years ago the company I worked for was buying BHP steel sheets cheaper from OS than from BHP direct
That I couldn't understand
Goes on a boat,sails half way round the world,gets unloaded, reloaded, back on a ship sails half way round the world again,is cheaper than a few thousand road Ks

[jpblue1000]

Originally Posted by 302 XC

That could be true if the average wage was that amount here,go take the over paid mining workers salary from the average ,and youll be shocked what the real mans wage is

That why Median was quoted it allows for statistical extremes, and the numbers are from both countries recent published data.

JP

[tranquilized]

Originally Posted by 302 XC

Written on my imported laptop,sent via an imported wireless device, while sitting on my imported chair at my imported desk ,while drinking my imported beverage in my imported cup ,while listening to my imported headphones with tunes down loaded by my imported laptop on my imported ipod

Are the tunes imported as well? Plenty of great music gets "manufactured" here, but thats probably a bit off topic...

[phillyc]

What is the true cost of an imported car?

Well, the biggest elephant in the room is the current account deficit. Each time you buy something imported over a locally made product you are adding to the current account deficit. As long as I have been alive we have been adding to the deficit on a yearly basis. We pay interest on this to foreign entities. If we never pay it off we continue to pay interest forever.

So, that $30k car that you buy probably cost $23k at the border. By the time you get rid of it in 3 years time the damage to Australia is $27k and rising. Then you repeat the process. The interest builds on those purchases ad finitum. All the while, money gets drained from the Australian economy instead of going into the economy and creating opportunity for other Australians and taxation revenue for government.

It's frankly disgraceful that in times of such incredible mineral exports we are still racking up international debt. I feel that Australia has a bright future, it isn't too late. Many people feel that life in Australia is getting harder. You can add to that or help make it better.

Buy Australian made where you can. Your future may depend on it.

[Crazy Dazz]

Originally Posted by 302 XC

That could be true if the average wage was that amount here,go take the over paid mining workers salary from the average ,and youll be shocked what the real mans wage is
I only know a very small minority non mining workers who get anywhere near 65 K a year
Its funny nearly 10 years ago the company I worked for was buying BHP steel sheets cheaper from OS than from BHP direct
That I couldn't understand
Goes on a boat,sails half way round the world,gets unloaded, reloaded, back on a ship sails half way round the world again,is cheaper than a few thousand road Ks

Except there’s a good chance the BHP steel wasn’t made in Australia.

[jpd80]

RHD Titanium Mondeo in UK sells for 22,000 pounds, a very similar version here is $49,000.

After currency conversion and transport the car should be around $40,000 here, imagine if it was...

[DJM83]

Then my new ST would have been a little cheaper.

[302 XC]

Originally Posted by jpd80

RHD Titanium Mondeo in UK sells for 22,000 pounds, a very similar version here is $49,000.

After currency conversion and transport the car should be around $40,000 here, imagine if it was...

40 grand for a mondeo ,or $49,990 for an SR5 hilux 4x4 dual cab turbo diesel
$34,888 gets a navara 4x4 dual cab turbo diesel
Both driveaway ,recently advertised prices
Wonder why dual cab 4x4s are the biggest selling thing at the moment,price

[tezxr8man]

Originally Posted by phillyc

What is the true cost of an imported car?

Well, the biggest elephant in the room is the current account deficit. Each time you buy something imported over a locally made product you are adding to the current account deficit. As long as I have been alive we have been adding to the deficit on a yearly basis. We pay interest on this to foreign entities. If we never pay it off we continue to pay interest forever.

So, that $30k car that you buy probably cost $23k at the border. By the time you get rid of it in 3 years time the damage to Australia is $27k and rising. Then you repeat the process. The interest builds on those purchases ad finitum. All the while, money gets drained from the Australian economy instead of going into the economy and creating opportunity for other Australians and taxation revenue for government.

It's frankly disgraceful that in times of such incredible mineral exports we are still racking up international debt. I feel that Australia has a bright future, it isn't too late. Many people feel that life in Australia is getting harder. You can add to that or help make it better.

Buy Australian made where you can. Your future may depend on it.

I wish everyone had this common sense

[RedHotGT]

Damn you and your logic and facts...................................

That stuff never works with the government...........

[302 XC]

Originally Posted by tezxr8man

I wish everyone had this common sense

$$$ ,out trumps common sense ,every time
I just bought a new John Deere ride on mower ,17.5 HP,42 " cut with a free $350 trailer for $2600
The cheapest aussie made ride on that came close was nearly a grand dearer and no free trailer,with a smaller engine at best ....

Its no different to cars, the imported stuff is sometimes better built ,and most times better value for money
People only care for what it costs from the hip pocket,nothin else matters

[Flat Top]

use the tariff to give export incentives to equal up the weighted exchange rate?? carry on with ATS to co invest in capital programs

[Elks]

Originally Posted by 302 XC

40 grand for a mondeo ,or $49,990 for an SR5 hilux 4x4 dual cab turbo diesel
$34,888 gets a navara 4x4 dual cab turbo diesel
Both driveaway ,recently advertised prices
Wonder why dual cab 4x4s are the biggest selling thing at the moment,price

There is no wonder. Our government effectively subsidises the sale of these IMPORTED twin cab utes.

2 or 3 years ago, at the behest of the Greens. The govt changed the FBT rate to a flat 20% of the cost of the vehicle supplied. Previously it was on a sliding scale, which most commonly was applied at 11%. It could also Sometimes 6% and low usage vehicles got 20%.

So a $40,000 G6 had an additional $4400 per annum wrapped into the lease cost. However this is now 20% so that's $8,000 per annum. That's as much as the lease itself.

However Commercial vehicles are exempt from FBT which means you can lease a $57k leather lined Ranger for less than a $40k Territory. Don't get me wrong some of the latest twin cab utes are great vehicles, and well worth owning. But throw in a subsidy and its no wonder that four of the top ten vehicles in this country are pickups. With twin cabs being the best sellers.

It is complete madness that we are subsidising the destruction of our own industry. Exemptions should only apply to single cab tray back vehicles or one tonne vans. Or better still. Australian made vehicles.

Are you still wondering why we have a sudden boom in twin cab utes?

[turbodewd]

Elks

I noticed this recently and its madness.

To be able to lease a twin cab ute with ZERO FBT is a massive market distortion. Its absurd beyond belief.

Ive looked into this and, if I wasnt so Falcon-loyal, would get a Ranger twincab on a lease in a flash. FBT free!!!!!!!!!!!

CRazy madness beyond belief!