The prolonged death of Australian Auto Manufacturing

[BENT_8]

Originally Posted by gtfpv

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 .

A sad state of affairs indeed.

But hey, a handful of people who did accountancy 101 understand the economics of the decision so it must be a good move for ALL Australians.

At least that's the vibe 'round these parts.

[gtfpv]

Originally Posted by BENT_8

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.

but there are better people out there than us BENT_8 AND THEY WORK FOR LESS . we are greedy and too expensive . It's only right that we should be thrown out on the street and start selling coffee and donuts down at donut king , who also pay too much , soon fairness for donut king owners will come in , and indians will take over it and employ those better people , who work for less , and finally then , the world in australia will be as it should be .

And then as one og our right wing pollies suggested , we'll be able to concentrate on higher activities , like , erm , i dunno , saving some more money and cutting back .

[Bossxr8]

Originally Posted by BENT_8

A sad state of affairs indeed.

But hey, a handful of people who did accountancy 101 understand the economics of the decision so it must be a good move for ALL Australians.

At least that's the vibe 'round these parts.

Absolutely. Anyone who thinks that losing manufacturing jobs here just has to happen, because it makes economic sense, should be shipped off to a third world country and their passport ripped up, and see how they like working for a bowl of rice a day.

Absolute clown shoes.

But as Tony Abbott say's, don't worry, we will all get new jobs, better jobs. At least in his little fantasy world were good paying jobs grow on trees

[BENT_8]

Originally Posted by Bossxr8

Absolutely. Anyone who thinks that losing manufacturing jobs here just has to happen, because it makes economic sense, should be shipped off to a third world country and their passport ripped up, and see how they like working for a bowl of rice a day.

Absolute clown shoes.

But as Tony Abbott say's, don't worry, we will all get new jobs, better jobs. At least in his little fantasy world were good paying jobs grow on trees

When the thread appeared my first thought was how long until the resident accountants clear their throats and regurgitate the 'economic viability' propaganda.
Almost on cue came the 'party line'.

So far removed from what is important to THIS country and people like yourself.

Whilst most people fully understand the economics of the corporate decision, to sprout it around as acceptable to Australian workers is beyond disgraceful.
It is that sentiment that has led us to where we are and will lead us further down that path.

[b0son]

Originally Posted by SpoolMan

Here is a 4 Corners story

Some of the quotes gave me a chuckle ... workers saying 'we've done everything we possibly could to keep the company viable', or only ever mentioning the take home pay but not all the other benefits.

Compare their EBA with a basic manufacturing award, and they are on a pretty good wicket. Fine when the industry is profitable and can afford it. That ship well and truly sailed. The sad reality is as volumes fall, they would need to bring all costs down, including wages/benefits. The unions refuse to entertain that idea. Wages have and always be a 'only way is up' affair, and with profits falling, the outcome of that position is predictable. Management have to take some blame here too, they approved rises they knew they probably couldn't afford. Just dumb.

There's no question cost savings could be found elsewhere... executive pay, dropping the loss-making cruze, etc. But you wont find those savings while your head is buried in the sand, and it certainly seems like both management and workers are guilty of that.

[SpoolMan]

Originally Posted by b0son

S

Compare their EBA with a basic manufacturing award, and they are on a pretty good wicket. ..

Wages make up 8 to 10% of a cars total price, whatever one thinks of there total package it doesn't look that unreasonable.

[b0son]

Originally Posted by SpoolMan

Wages make up 8 to 10% of a cars total price, whatever one thinks of there total package it doesn't look that unreasonable.

It does when it is double the cost of labour in a European car, and 4 times that of an Asian car.

[Romulus]

Originally Posted by b0son

It does when it is double the cost of labour in a European car, and 4 times that of an Asian car.

And therein lies the issue. Why build here when you can build overseas with 1/4 the wages cost.

[bobthebilda]

Originally Posted by SpoolMan

Wages make up 8 to 10% of a cars total price, whatever one thinks of there total package it doesn't look that unreasonable.

Oh, that is complete crap. Even if you take low end figures that the car manufacturing industry in Australia employed 20,000 people ( and most say it is upwards of 50,000), and assign them a wage of $70,000, that equates to $1.4 billion for the 200,000 cars australia made last year. If you then subtract that on average 30% of the car was imported, then it is $1.4 billion on 140,000 cars. Thats around $10,000 per car. Then consider that a great deal of australian cars are $15000 to $18000 wholsaled camry's and cruzes etc, then you can look at the labour $ in an Australian car being well over 50%. No wages figure x total employment / cars produced that you could credibly produce, would show a 8 to 10% figure.

[Pugsley100]

Originally Posted by b0son

There's no question cost savings could be found elsewhere... executive pay, dropping the loss-making cruze, etc. But you wont find those savings while your head is buried in the sand, and it certainly seems like both management and workers are guilty of that.

The savings you mentioned wouldn't have helped. They have economies of scale problems.
Just looking at Thailand where the multinationals have built new factories and set up a car manufacturing hub. They have deliberately built factories with over capacity in a country where car workers live what I would call a subsistence life, crammed into rented apartment accommodation with little money left over to enjoy life.

Thai factories are able to ramp up production as factories close elsewhere around the world but at present are reining in production as generally the car industry is in over supply. There is even long term talk of shifting manufacture from Thailand to other countries as even the Thai workers lowly wage is considered high. There are cheaper workers available in Indonesia and India.
Do you think Australian workers would agree to be paid subsistence rates to compete with a Thai worker who gets, perhaps $160 a week with overtime?

[mcnews]

A friend of mine in the industry that supplies parts to the Aussie auto sector wrote this recently, hope they don't do this to the Ford guys.

---

One minor change that slipped into the budget has gone largely unoticed that could have a huge impact for a lot of automotive companies winding down... like us.

The FEG, whish is the scheme that guarantees payouts in the case of a companies becoming insolvent, is to change from 1 Jan 2015. currently payments covered include redundancy pay of 4 weeks per year of service. The change is to cap it to 16 weeks max, and I may need to help of a lawyer, but it could even be 16 weeks max including redundancy, outstanding holiday, long service, sick leave, etc. This would huuuuggggely change the situation for most long term folk on our site.

The extreme is one of our tube jockeys (CAD guy) who has 43 year up. His current payout would be something like 43 x 4 = 173 weeks pay, + owing leave and long service which could literally be another year or more. + 4 weeks for being over 55, + un taken sick leave - potentially another 1/2 year. So people are genuinely looking at 5 years salary as pay out. Obviously being reduced to 16 weeks changes thing for them, because it turns out every one counts on redundancy money.

For me personally I'd be paid out about a year's salary - actually about 15 months with long service, so the impact to me personally would be maybe 80~100K. So anyway, all this applies to is the government funded guarantee for the worst case. worst case will be we all get 16 weeks.

[b0son]

Originally Posted by Pugsley100

Do you think Australian workers would agree to be paid subsistence rates to compete with a Thai worker who gets, perhaps $160 a week with overtime?

I think at best, they could have bought themselves some more time. I don't think there's anything unreasonable, however, of wages falling to basic Australian manufacturing award levels if that's all the profitability of that industry allows. Take it or leave it.

This was the crux of the dispute at Toyota. Toyota wanted to approach the workers directly to take a vote on wages. I don't doubt that faced with the prospect of no job, many would have accepted it. Instead, the union killed the proposal, and the factory decided to shut its doors instead.

When the workers eventually hold their hands out wanting assistance, I wonder how much of the tens of millions their union is sitting on, will be offered to help .....

[b0son]

Originally Posted by mcnews

So people are genuinely looking at 5 years salary as pay out.

Compare that to a standard award.

5 years is ridiculously generous, and quite frankly, should never have been entertained. I'm surprised if an employee needs an organ, his employer isn't the first one asked to check if they're compatible....

[Wretched]

5 years? holy crap.

[SpoolMan]

Originally Posted by bobthebilda

Oh, that is complete crap..

I didn't make it up, blame 4 corners and the car industry experts and university consultants they interviewed for there numbers.

[mcnews]

Originally Posted by b0son

Compare that to a standard award.

5 years is ridiculously generous, and quite frankly, should never have been entertained. I'm surprised if an employee needs an organ, his employer isn't the first one asked to check if they're compatible....

Oh for sure, I am self employed and all that sounds ludicrous. But of course to get these conditions etc. there have been trade offs in pay rates etc. etc. I mean I have a sparky having to do less than two days working talking about charging me 2 grand, now that I find truly ridiculous.

[b0son]

Originally Posted by mcnews

Oh for sure, I am self employed and all that sounds ludicrous. But of course to get these conditions etc. there have been trade offs in pay rates etc. etc.

They still get paid well above a manufacturing award rate. They haven't been screwed over by any stretch of the imagination. FFS, the employer has to pay for them to get union rep training, and the union gets to dictate how many of said employees get to be reps.

I mean I have a sparky having to do less than two days working talking about charging me 2 grand, now that I find truly ridiculous.

And you can put the job out to tender if you desire. That's competition. Could Holden simply lock their employees out and replace them all with new workers that were happy to work for less?

[Romulus]

Originally Posted by b0son

When the workers eventually hold their hands out wanting assistance, I wonder how much of the tens of millions their union is sitting on, will be offered to help .....

The silence from the union is deafening when it comes to this being answered......

[aussiblue]

I wonder how much of the tens of millions their union is sitting on, will be offered to h

The silence from the union is deafening when it comes to this being answered......

Probably because it is too insulting to justify a response. I have no association with the AMWU, but the accounts of the union are public documents available here http://www.e-airc.gov.au/188v/financial. Yes; at 30 June 2013 it had some $107 million in accumulated reserves but when you look at that against its annual incomes and expenditures ($53.9M and $49.5M) it seems to me to just represent sound conservative financial management noting the union has a legal obligation to remain solvent. Given the state of the industrial scene it operates in it also makes sense to maintain a fighting fund.

Are you implying that somehow unions officers are benefitting to the detriment of members? Noting the Australian Manufacturing Workers' Union represents over 100 000 workers in all areas of manufacturing, including:
•food and confectionery;
•metal and engineering;
•printing and packaging;
•technical, supervisory and administrative areas; and
•vehicle building.
so they can hardly apply all there funds to just one segment of their membership.

[SpoolMan]

Guy's this isn't a thread on union conduct.

The prolonged death of Australian Auto Manufacturing.

[aussiblue]

Guy's this isn't a thread on union conduct.

Yes I know, but I guess as some people will argue that the union(s) is (are) wholly or partially to blame for the demise of the Oz automotive manufacturing industry, the debate is going to stray into these areas and similarly, as some will argue its about economic policy, it will stray into politics as well. And while I will disagree with some of the opinions I support peoples right to have and express these opinions.

[Bossxr8]

Why is it always the same clowns banging the same anti-union drum. Even if every auto worker took a 10% pay rise it would make sweet FA difference, it's the general public and the government/fleets not buying cars that is the cause of the tiny economy of scale problems that have killed off the 3 locals, nothing to do with wages.

It's a simple fact that overseas factories have much larger capacities, cheaper electricity, no OH&S and other government red tape and weak environmental laws. These simple factors ensure their cost per unit will be significantly lower than here in Oz. Not to mention the workers making bugger all pay.

[new2ford]

Originally Posted by b0son

It does when it is double the cost of labour in a European car, and 4 times that of an Asian car.

You can't expect wages to be lower when the cost of living is so high. In fact, Australian wages are proportionally lower than in some European car manufacturing countries.

When I was looking at figures a couple of years ago two examples (round figures) off the top of my head were:

Germany - Australian disposable income 50% higher, Australian cost of living 90% higher
Czech Republic - Australian disposable income 100% higher, Australian cost of living 150% higher.

I've lived in both countries and it's my impression those figures would be about right. I didn't have a close look at comparative car prices but I had the impression that an equivalent car manufactured in those countries was about 100% more expensive in Australia. Some overseas exporters (of many products) must do very well out of Australia.

On the other hand (casual observation), a bottle of typical Jacobs Creek Australian wine in a Czech supermarket was about $7 but it was competing with top quality French and German wines selling for about $2-3 a bottle.

Only examples but I'm sure part of a big picture.

[Crazy Dazz]

There are undoubtedly industries in this country where unionised workers cling to outdated ideas, to the detriment of all concerned. But there are also industries where the workers have little or no militant union protection and work damn hard for meagre pay.
And ALL these jobs are under threat.

Have these unions contributed to these problems? Perhaps in a roundabout way they have, but at the end of the day its chickenfeed compared to the real problems.
Criticising Holden workers is really a bit ****-about. Even if they agreed to work for half the money, it MIGHT have kept the doors open another 6~12 months. Considering they are facing the axe, followed by unemployment, I can understand why they would be reluctant to take pay cuts.

Australia willingly trades with countries that ignore even the most basic human and workers' rights. I've WORKED in Asia, and the HSE violations alone are the stuff of nightmares. Add that to the pitiful wages and how are we supposed to compete?

Then you have the ridiculous tax burden that companies in Australia face. Land tax, payroll tax, fringe benefits tax, and if you dare to make a profit 30% income tax as well. It's a sick joke. Most countries, including those like the USA, offer INCENTIVES for companies to build factories and create employment. Australian governments just attack like leeches.

The whole notion of "free trade" is a nonsense:
The USA economy is built on "debt." Put very simply this allows people to "invest" in the USA by buying Treasury Bills. So who buys these trillions of dollars in treasury bills? The Arabs, Japanese, and now Chinese. They sell their own currency short, thus building up multiple billions in USD reserves. This keeps their currency at a fraction of what it should be, making their exports dirt cheap. (They then use those reserves to allow their state-owned companies to buy up mines across the globe.)
Despite this wholesale bastardisation of the system, Australia still insists that this is "free trade."

[NAK302]

Originally Posted by Bossxr8

Absolutely. Anyone who thinks that losing manufacturing jobs here just has to happen, because it makes economic sense, should be shipped off to a third world country and their passport ripped up, and see how they like working for a bowl of rice a day.

Absolute clown shoes.

But as Tony Abbott say's, don't worry, we will all get new jobs, better jobs. At least in his little fantasy world were good paying jobs grow on trees

Australia is a 3rd world country in my view.

[Romulus]

Originally Posted by Bossxr8

It's a simple fact that overseas factories have much larger capacities, cheaper electricity, no OH&S and other government red tape and weak environmental laws. These simple factors ensure their cost per unit will be significantly lower than here in Oz. Not to mention the workers making bugger all pay.

That being the case, why doesn't the government either;

a. Ensure a level playing field by banning vehicles manufactured under lower conditions to those imposed on Oz manufacturers
b. Lower the standard and regulations to the same level and standards as those we compete with overseas.

Anyone who thinks FTA's are a good deal for Oz are kidding themselves.

[BENT_8]

Originally Posted by F6 Concorde

That being the case, why doesn't the government either;

a. Ensure a level playing field by banning vehicles manufactured under lower conditions to those imposed on Oz manufacturers
b. Lower the standard and regulations to the same level and standards as those we compete with overseas.

Anyone who thinks FTA's are a good deal for Oz are kidding themselves.

Because its a vicious circle.
If the government banned these cars then average Joe would complain that your dictating what he can buy.
The old 'its not my fault Holford don't make my AWD urban tractor full of all the latest gizmo's in Australia, I should be free to buy whatever I want.'

And in there lies the problem.
When someone points at the 70's-80's Australia car scene and refers to proud Australians who gladly bought the local product as people who knew no better it makes me sick.
Like its fair game to turn your back on OUR product because modern Australia is so much smarter than the generations before...please.

We build a vehicle to fit nearly every requirement, be it medium, large, suv, ute, wagon, V8, i6, 6T, V6, 4T, LPG, Diesel, E85 and probably more, but we don't make a Mazda 3, 6 or bloody Navara so our industry is screwed.

Australia will go to the dogs, not because of welfare, but because Australians believe their own bullshit.

[Romulus]

Any further proof the government isn't interested in supporting local industry can be seen here.

http://www.news.com.au/national/brea...-1226945510973

[Crazy Dazz]

Originally Posted by F6 Concorde

Any further proof the government isn't interested in supporting local industry can be seen here.

http://www.news.com.au/national/brea...-1226945510973

Not really, the AWD program has been another fiasco like the Collins, and HIGHLIGHTS the same problem that has afflicted the car industry.
I believe Australia SHOULD have had a car industry, and a SHIP industry.
Not a couple of factories producing unviable numbers of limited market cars, but an actual industry producing a few hundred thousand for export.
Similarly we should have a shipbuilding INDUSTRY, not just try to cobble together a team every time the Navy needs a new ship.

[Road_Warrior]

Originally Posted by F6 Concorde

Any further proof the government isn't interested in supporting local industry can be seen here.

http://www.news.com.au/national/brea...-1226945510973

Perhaps if ASC got their sheizen together and delivered projects on time, on budget and without diabolical construction flaws, then the government would be encouraged to invest more in Australian shipyards. Consider this a "warning shot across the bows", pun intended, for the shipbuilders to get their act together before they get another contract.

I'm all for supporting Australian industry, but not at unlimited costs, and while I won't stand for any further erosion of our industrial and manufacturing base, I also won't stand for companies being paid hundreds of millions to deliver highly important projects that turn out to be half arsed.