Holden reveals that it has received $2.17 billion in Federal Government assistance

[Resurrection]

http://www.abc.net.au/news/2013-04-0...sidies/4604558

Holden reveals billions in subsidies
AM
By Simon Lauder

Updated 13 minutes ago
Julia Gillard sits in the driving seat of a Holden Photo: Government support: Julia Gillard in the driver's seat of a Holden Cruze during a 2011 visit to Holden's Adelaide plant (AAP)
Related Story: Automotive expert says Holden poised for collapse
Related Story: Holden to shed 170 jobs
Related Story: Holden gets $275m to stay in Australia
Map: Australia

Carmaker General Motors Holden has revealed that it has received $2.17 billion in Federal Government assistance in the past 12 years.

The figure, which is much higher than previously estimates, was released by Holden after a dispute with the Australian Financial Review newspaper.

And it is set to reignite debate about the virtues of government handouts for Australia's automotive industry.

GM Holden's director of government affairs Matt Hobbs says some of the $2.17 billion is yet to be cashed in.
Audio: Holden reveals billions in subsidies (AM)

And he insists the assistance is good value for taxpayers, because the subsidies underwrite tens of billions of dollars in local investment.

"We've received $1.8 billion worth of incentives - both duty reductions and cash - over the last 12 years, and that's allowed us to undertake automotive manufacturing in Australia and spend over $32.7 billion, and $21 billion of that in the supply of those," Mr Hobbs said.

"It's a lot of money to receive but it's a huge amount to spend in the economy and we're very, very proud of the fact that we've been building cars here and spending a lot of money in the economy."

The amount averages out to $150 million a year for Holden.
Australia's automotive industry

The Government's New Car Plan involves $3.4 billion in support for the industry
The Government also provides grants to Ford and Holden to encourage innovation
More than 1 million new vehicles are sold annually
Toyota has the lion's share of the market, selling 18 per cent of new vehicles hitting the road.
Next is Holden with 12.5 per cent, with Ford on 9 per cent.
In the passenger car market, imports outsell locally-produced vehicles by nearly 4 to 1.
Australia's vehicle and components exports are worth $3.25 billion annually.
The Middle East (44 per cent) is Australia's biggest automotive export market.

All figures as of 2011. Read more here.

University of Wollongong economist Henry Ergas says the figure is about 40 to 50 per cent more than previous estimates, and he believes it is a significant waste of taxpayers' money.

"It doesn't seem to help the industry adjust," Mr Ergas said.

"It just keeps it in existence, and there seems to be no prospect of getting it off life support to being internationally competitive and viable."
'Wealth-generating industry'

Mr Ergas says resources are being spent on an industry that cannot survive without subsidies, and argues those funds would be better spent on viable industries.

But Mr Hobbs says Holden would close its Australian plants if the subsidies were cut.

"It's a great deal for the country ... [and] if the assistance wasn't there, we'd go away. We would just do this somewhere else in the world," he said.

But he denies his position is a form of blackmail.

"No, it's about informing people about what our business can bring to this community and then providing what is necessary to bring the investment to this country," he said.

"Other countries fight viciously for it because it's a wealth-generating industry."

A spokesman for Industry Minister Greg Combet says the Government supports manufacturing because it provides jobs, technologies, investment, and other economic benefits.

[mik]

To my way of thinking the subsidies are really only compensation for the sabotageing of the industry with the button plan in the first place.
The button plan was to shrink the local companies down so imports could get get get a foothold , at one stage holden employed over 16000, the most recent numbers I could find where november 2012. With a mere 2100 employed,.
No doubt the numbers for other car industry employee's would have declined by a similar amount.

[FPV GTHO]

They want our industry to be globally competitive without subsidy, but dont realise nobody else has an industry that goes without subsidy.

[Road_Warrior]

I don't think the issue is the Button Car Plan. The issue is that successive governments have done bugger all since the Button Plan to review the system that was put in place in the context of where the car industry is now. Globalisation and rapid market shifts weren't front and centre of the plan then but the reality is that these two things hold sway over whether a car maker lives or dies today.

[Professor Farnsworth]

just a warning for everyone to tread carefully in this thread - this will not become a crap-slinging competition between makes and political parties.

keep the politics out of it.

[turbodewd]

Well if all local/state/territory governments followed the lead of SA and Vic and bought almost exclusively Australian then the local manufacturers wouldnt need as much Fed govt assistance one would think.

Remember Holden, Ford AU and Toyota AU arent monopolies, they compete against huge competition. Loads of brands with loads of models.

[jpd80]

Edit,
found this article:

LINK
Figures released by Holden show it received $2.17 billion in state and federal government assistance over the past 12 years, compared to $1.1 billion for Ford and $1.2 billion for Toyota, News Limited can reveal.

This equates to Holden receiving an average of $180 million a year compared to Toyota taking $95.8 million a year and Ford getting $87.8 million a year.
Government funding over the past 12 years (2001 to 2012):
Holden: $2.17 billion
Toyota: $1.2 billion
Ford: $1.1 billion

Annual average over the past 12 years (2001 to 2012):
Holden: $180 million
Toyota: $95.8 million
Ford: $87.8 million

Cars made locally in 2012:
Holden: 85,000
Toyota: 101,500
Ford: 37,000

Average taxpayer dollars per car built in 2012:
Holden: $2117
Toyota: $944
Ford: $2372

Our mate Dowling, spreading malicious venom......

[mik]

Originally Posted by Road_Warrior

I don't think the issue is the Button Car Plan. The issue is that successive governments have done bugger all since the Button Plan to review the system that was put in place in the context of where the car industry is now. Globalisation and rapid market shifts weren't front and centre of the plan then but the reality is that these two things hold sway over whether a car maker lives or dies today.

Totally agree mate, nail hit on the head.

[Resurrection]

Originally Posted by Road_Warrior

I don't think the issue is the Button Car Plan. The issue is that successive governments have done bugger all since the Button Plan to review the system that was put in place in the context of where the car industry is now. Globalisation and rapid market shifts weren't front and centre of the plan then but the reality is that these two things hold sway over whether a car maker lives or dies today.

+2.

When the Button plan was written in the 1980s nobody could have predicted the collapse of communisim, the rise of global trading and the emergence of new low cost countries. What has annoyed me for many years is that NO government regardless of political persuasion were willing to revisit the Button plan to see if it required any modification. It seems everybody treated the Button plan as gospel as saw no reason to touch it.

[pearlhead]

Originally Posted by jpd80

Edit,
found this article:



Our mate Dowling, spreading malicious venom......

Hiiiiissssssssssssss, the name that must not be uttered.

[ltd]

It's a chicken and egg argument really.
Did Holden sell more cars because they had a greater subsidy and could do things such as promote and advertise their cars more and therefore as a company have a greater advantage in real dollars?
Or did ford and the falcon do better because the falcon has a higher subsidy in dollars per vehicle? Or were ford at a disadvantage having a lower overall subsidy and therefore couldn't promote or advertise their cars as well as Holden?

[MITCHAY]

I know the general consensus among us motoring enthusiasts is that this is a better proposition for the taxpayer than all the manufacturers left on their own and packing up.

I'm not going to bother debating the difference between what each manufacturer gets because in the end it is about who best bids for the money in my opinion.

Based on my general experience a lot of the public would find this sort of investment in local car manufacturers as outrageous and would have no problem with them fading into history.

However has there been any studies done to reasonably quantify what it would cost the taxpayer if these manufacturers no longer existed?

I'd like to think there were since the government provides the money but I was just wondering if there was a paper on it.

[MethodX]

Good, all car making countries help their industry.

[jpd80]

I would love to see an actual break down of the government funding Ford has supposedly received over the past 12 years,
$1.1 Billion is close to $200 million every two years, I am certain that Ford has never consistently received those amounts.....

Since 2006, i recall:
- $100 million for FG
- $13 million for Euro 4
- $31 million for Castings plant upgrade and SZ Territory
- $40 million for sustainability, Ecoboost, EcoLPI, nd V6 Diesel for Terry
- $50 Million for 2014 Falcon

$that's not even $250 million... in the last seven years....


Does anyone have figures for funding associated with:
- BA series 1
- SX Territory
- BA II
- SY Territory
- BF Series 1
- BF Series II
- SY Series II

[Dr Smith]

Dowling states Holden released their figures but how did he get Toyota and Ford subsidy values?.

[crackers23]

I have been dealing with Holden and Ford manufacturing plants for 15 years. I can honestly say neither will last while they are controlled by their US owners. I supply waste processing equipment, 10 years ago put proposals to Holden that would gain them an extra $2m a year in scrap sales, plus recycling all their machine coolants would have saved maybe $5m a year. Each proposal had an investment return of less than one year.

The management that rejected that proposal does the same in many other areas - that is inefficiency at its best. So they go for govt handouts to save jobs and still sack them. Ford is no better in their casting plant at Geelong, same wasteful processes and won't change.

[Wretched]

Originally Posted by Dr Smith

Dowling states Holden released their figures but how did he get Toyota and Ford subsidy values?.

Freedom of Information?

[Bossxr8]

The income tax payed by the employees to the government basically matches the money Holden received, so in my eyes it basically pays for itself. Why is this even an issue. The government is basically getting out of this with an even balance sheet, if Holden shut down how much money would they be out of pocket in Centrelink payments?

I just need to say these morons that continually try to bring the auto industry down need to go **** themselves.

[Dr Smith]

Originally Posted by Wretched

Freedom of Information?

I couldn't see where he actually spells out that the Fed government released the numbers but seems to imply Holden "opened their books".

From ABC News http://www.abc.net.au/news/2013-04-0...sidies/4604558:

The figure, which is much higher than previous estimates, was released by Holden after a dispute with the Australian Financial Review newspaper.

so I can't see where Ford/Toyota gave out there grants/subsidies.

[Wretched]

According to this site the figures can be acquired from FOI.

Yesterday The Australian Financial Review reported that the Commonwealth Industry Department blocked access to data about levels of car industry subsidies.

According to the department, the information requested under Freedom of Information legislation would not "contribute in any meaningful way to informing debate on a matter of public importance".

It should be available too via FOI it is public money being used and Holden is a public company.

[Road_Warrior]

FOI legislation only applies to getting information out of government departments, maybe someone FOI'ed the relevant government department (whichever one that is) to get the information.

[bobthebilda]

Originally Posted by jpd80

I would love to see an actual break down of the government funding Ford has supposedly received over the past 12 years,
$1.1 Billion is close to $200 million every two years, I am certain that Ford has never consistently received those amounts.....

Since 2006, i recall:
- $100 million for FG
- $13 million for Euro 4
- $31 million for Castings plant upgrade and SZ Territory
- $40 million for sustainability, Ecoboost, EcoLPI, nd V6 Diesel for Terry
- $50 Million for 2014 Falcon

$that's not even $250 million... in the last seven years....


Does anyone have figures for funding associated with:
- BA series 1
- SX Territory
- BA II
- SY Territory
- BF Series 1
- BF Series II
- SY Series II

The quoted figures include more than just cash. It also includes things like ford being able to import parts and not paying tariffs on those parts.

[pmacc]

Originally Posted by MethodX

Good, all car making countries help their industry.

Yep in the US each of the companies looks for which US state will give them the best tax breakes, then there is the department of energy which hands out green subsidies like we do.

In europe there are subsidies by each country to keep manufacturing. off the top of my head, Fiat, PSA, Renault, GM Europe and Ford Europe have all had subsidies in recent years and then there is green car funding from the EU

problem is most people dont know what is going on out in the world and only listen to whatever fluff pieces the 6pm news brings and read papers which have to run campaigns against something just so they can sell enough papers to stay afloat

[Road_Warrior]

There are some more figures missing from this lop-sided industry opinion piece. And that is of course the financial contribution Holden makes to the economy, the government's tax coffers, and to the manufacturing sector:

http://www.goauto.com.au/mellor/mell...257B410002DA42

Holden’s figures show the car-maker has spent $21 billion on locally made parts for its cars since 2001.

It shows labour costs have totalled $5.9 billion, while engineering and design costs have totalled $3.1 billion.

Capital investment has totalled $2.7 billion, the car-maker says. Over the same time, Holden claims it has paid $1.4 billion in income taxes.

$21 billion on procurement (that's the parts and raw materials used to make cars)
$5.9 billion on labor costs (wages, super, compo etc)
$3.1 billion on engineering and R&D
$2.7 billion on capital investment (new facilities and tooling/plant I would say)
$1.4 billion on tax to the guberment -

That's $34.1 billion dollars over 12 years of money they have put into the Australian economy and people are complaining about, what, 5% of that?? $34 billion is a SHITELOAD of money. That is $2.8 billion per year. That is more than what most state (or federal) governments spend on any single thing, aside from say Defence.

[buggerlugs]

http://www.news.com.au/business/comp...-1226611137074

[jpd80]

Originally Posted by bobthebilda

The quoted figures include more than just cash. It also includes things like ford being able to import parts and not paying tariffs on those parts.

I would think that most manufacturing, mining and primary producers importing parts for wealth creation would be exempt from taxes and tarriffs.

While it might look the same to you, an exemption from taxes and tariffs is not the same as a subsidy, hence the term "Assistance".

Taking that "Assistance" over a 12 years is quite mischievous in that it doesn't underscore
the progressive withdraw of that assistance in the past seven years, and the elimination of tariffs.

It is painfully obvious to everyone in the manufacturing sector that government assistance
is becoming less and less every year as Australia recedes to being a mine and a farm...

[smoo]

Holden receives 2.17 billion over 12 years.

Asylum seeker costs this year alone, 2.8 billion

[Sinead Phipps]

For those querying where our figures have come from, we release our levels of Government grants and other subsidies (such as ATS) as part of our annual statutory accounts each year. The figure of $1.1 billion is accurate for the 10 years to the end of 2011 calendar year.

[XWGT]

And if Ford PR were half smart they would disclose their number today and tuck behind Holden who will be taking the brunt of the **** storm for the next week. Issue then over and done with with minimum damage.

Cmon Ford PR, shock me. Just once :-)

[Sinead Phipps]

Read the post immediately above yours XWGT. We didn't / don't have to disclose our number as we release it each and every year as part of our accounts.