Car groups plead for PM's help

[DanielXR8]

Hmm ominious warning about Ford Australia in this article...

Car groups plead for PM's helpBy Dennis Shanahan
November 09, 2007 12:00am
Article from: Font size: + -
Send this article: Print Email
THE Australian motor industry has warned the Government that the viability of "two, or even three" of the nation's four car-makers is in doubt, threatening the long-term jobs of at least 7000 workers in Melbourne and Adelaide.

Toyota, Ford, Mitsubishi and GM Holden warned the Government last month that head offices in Tokyo and Detroit were under financial pressures and reluctant to commit more investment to Australia.

They wrote to the Government demanding a "serious review" of the $3 billion car assistance plan, the freezing of tariff cuts and "real assistance", including a rebate to develop hybrid "green" cars.

A confidential submission on the car industry to John Howard from the Department of Prime Minister and Cabinet, dated October 3, warns that the reaction of "stressed global parents" of Australian operations "could see the exit of Mitsubishi (in Adelaide) some time in 2008 with serious question marks on Ford being able to survive (as a producer) in Geelong and Broadmeadows (in Melbourne)".

However, despite Labor's pre-election promise to review the pace of tariff cuts, the car-makers said they feared conditions for the industry could deteriorate under a Rudd government. The companies said they were deeply nervous about the possibility of pattern wage bargaining and more militant unions emerging if Labor rolled back the Government's industrial relations laws.

Australian car executives told the Government the prospect "of 'union trouble' or higher wage costs would be a 'poison arrow' for a regional Australian operation trying to convince a parent company to invest hundreds of millions of capital in new models".

The PM&C submission says it is "widely recognised that Australian car manufacturers are facing serious pressure, raising real questions about the long-term viability of at least two, and possibly three, of the companies".

"In essence, the question that the industry is raising is why would a Toyota, Ford or a General Motors in Tokyo or Detroit respectively want to invest millions in upgrading an Australian operation when they are facing higher labour costs, greater union militancy and the threat of more strike action when they can put their money into low-cost and highly efficient Chinese operations?"

Yesterday - after the release of figures showing the unemployment rate at 4.3 per cent - the Prime Minister and Peter Costello declared that job creation was more important "than anything".

"The only policies the Labor Party has about jobs in this campaign are ones that will destroy jobs. They have a policy to bring back the unfair dismissal laws, they have policies on climate change, which are job-destroying, they have policies in relation to skills that will diminish the value of the Australian Technical Colleges by removing them," Mr Howard said. "Labor is the anti-jobs party in this election campaign."

Kevin Rudd accused Mr Howard of embarking on a new campaign of negativity and not looking to the future, while he defended Labor's industrial relations policies.

"Our industrial relations system is based on productivity-based wage increases. We believe that enterprise bargaining provides an effective basis for doing that," he said in Queanbeyan, just outside Canberra.

"Enterprise bargaining constitutes the core of Labor's industrial relations system. And if you look at the greatest surge of productivity growth in the Australian economy in the 1990s, it came off the back of enterprise bargaining being introduced."

The car-makers are just one sector of Australian manufacturing that is under intense pressure and competition from overseas, particularly from new sites in China with large-scale, hi-tech plants and highly skilled, stable and lower-paid workforces. The soaring Australian dollar, which this week hit a 23-year high above US93c, is also hurting exporters.

"It is clear there is a deep nervousness about the possibility of pattern bargaining, despite public assurances by the alternative government to the contrary," the PM&C submission says.

"The proposed abolition of AWAs is not really an issue for the industry as few employees are covered on the shop floor, but the possibility of wage outcomes being set without regard to the economic capacity of the individual enterprise to absorb is a real concern," the report says.

[|||]

are we really any better off supporting these companies?

sure they pay wages to aussies, but if the companies are just propped up by the tax payer anyway maybe we should cut out the middle man and invest in aussie companies instead

[vztrt]

Originally Posted by |||

are we really any better off supporting these companies?

sure they pay wages to aussies, but if the companies are just propped up by the tax payer anyway maybe we should cut out the middle man and invest in aussie companies instead

Problem is if these companies go down in Oz, then the flow on effect will be huge. Most of Aussie suppliers to these companies aren't going to be considered on the world market. Look what happened when the sales of Aussie built cars went down, and the amount of suppliers that went under (some were on the news, but you would be surprised how many actually couldn't efford to survive).

In saying that, saying that car manufacturing in this country is dying and Toyota is probably the only company that may be able to survive.

[colossus]

Maybe these companies should be more competitive, improve quality and make products that people actually want to buy instead of relying on government handouts all the time.

[LeadFoot81]

How can they be competetive in a market flooded by cheap imports??? They simply can't keep up, it's that simple.

Sounds like you dont love your BF GT *that much*

[|||]

Originally Posted by colossus

Maybe these companies should be more competitive, improve quality and make products that people actually want to buy instead of relying on government handouts all the time.

exactly.

to me its the same as an aussie company making crappy quality CRT TVs and expecting the taxpayer to keep them afloat as consumers switch to plasmas and LCDs.

if companies are making products no one wants then they need to change or die.

[nugget378]

Sounds just like a big political article to me.

Yes Rudd is the devil and the unions are his evil demons..:

[vztrt]

Originally Posted by The_Fantastic_Ford

How can they be competetive in a market flooded by cheap imports??? They simply can't keep up, it's that simple.

Sounds like you dont love your BF GT *that much*

They can be competative...its easy...drop the I6, find a 3L V6 and a 2.2L I4.
Remember to get rid of RWD, FWD save alot of money in R&D and manufacturing. Make the car more mid size and call it a "large car". The lighter weight should allow to make the brakes smaller. Dont worry about handling. Sack the styling department, and just keep making the car look bland. Make sure the inside is not user friendly, and do simple things like skimp on the seats. Just follow the pack and make the car a whitegood on wheels, I mean thats what the market wants! _

[irlewy86]

Originally Posted by nugget378

Sounds just like a big political article to me.

Yes Rudd is the devil and the unions are his evil demons..:

Look out its Ruddzilla and he has come to destroy all business he see's before him, oh why didn't we vote for Johhny?

[Auslandau]

Originally Posted by colossus

Maybe these companies should be more competitive, improve quality and make products that people actually want to buy instead of relying on government handouts all the time.

I would say that any and all companies philosophy would be exactly that! Of course they would love to survive without hand outs. I am sure at the board meetings they dont discuss how bad they can make a product or try and be as un competitive as possbile just so they can receive a grant? :

If any of these companies fail, it will be the g'ment of the time to cop all the flack for the loss of 1000's of jobs because they didnt help these large employers to keep people employed! It wont be directed squarely at the companies at fault! How do you compete with cars from Asia and their associated plants which are also helped by their g'ments?



| [/url] |

[4Vman]

Originally Posted by auslandau

I would say that any and all companies philosophy would be exactly that! Of course they would love to survive without hand outs. I am sure at the board meetings they dont discuss how bad they can make a product or try and be as un competitive as possbile just so they can receive a grant? :

If any of these companies fail, it will be the g'ment of the time to cop all the flack for the loss of 1000's of jobs because they didnt help these large employers to keep people employed! It wont be directed squarely at the companies at fault! How do you compete with cars from Asia and their associated plants which are also helped by their g'ments?

You make some very good points, while its one thing to need govt assistance to be competitive you also need to see what companies from the asian region get in form of breaks and assistance...
As the Aussie dollar climbs our local car industry gets shakier and shakier.. then combine that with the ever growing range of brands and products being imported..
IMO we have too many car companies and import models forsale in Australia, some have to go for the good of everyone.
If any of the Companies selling local manufactured vehicles fall over the ripple (or tsunami) will create a domino effect to the wider manufacturing industries that will be frightening.. Remember, the local car manufactureres are largely assembly houses, a fair % of parts come from outside suppliers who collectively employ far more people than the car companies themselves.
People are pleased to see the G6/G8 Pontiac (VE Commodore) as an export vehicle... well let me assure you its going to get an very icey reception in the US from unions and protestors... which combined with the dollar value may impact its long term survival..
Maybe we need to be a bit morer patriotic and protect our OWN local industries a bit more?

[SB076]

Originally Posted by vztrt

They can be competative...its easy...drop the I6, find a 3L V6 and a 2.2L I4.
Remember to get rid of RWD, FWD save alot of money in R&D and manufacturing. Make the car more mid size and call it a "large car". The lighter weight should allow to make the brakes smaller. Dont worry about handling. Sack the styling department, and just keep making the car look bland. Make sure the inside is not user friendly, and do simple things like skimp on the seats. Just follow the pack and make the car a whitegood on wheels, I mean thats what the market wants! _

Exactly given the relatively small no of vehicles we produce in this country I think all of the companies involved do a reasonable job - as for quality, maybe you should compare the cars produced here to whats made in China.

[FORD3V]

Is Dennis Shanahan a liberal party spokesman?????

Sounds to me like typical liberal party propaganda two weeks out from a federal election.

[VSSII]

This is a multi billion dollar industry not some baby making couple from Western Sydney sitting back asking for government handouts. Australian car sales are a drop in the ocean. In Japan alone Honda sell hundreds of thousands of their small Jazz's. Then they have plants in Malaysia that supply America, Europe and Australia. Thats just one model in their fleet. The whole Australian market is smaller than just one of Honda's cars. And Honda aren't even the largest Japanese manufacturer. You can't compete with that unless you have considerable assistance.
So Honda (as an example) don't make any Falcon sized vehicles that you want you might say. According to this months sales nobody wants them. WHile 4x4 sales increased and the Commodore was the best selling vehicle (mainly fleet sales), Toyota sold more cars than GMH and Ford together.

[fmc351]

Originally Posted by vztrt

They can be competative...its easy...drop the I6, find a 3L V6 and a 2.2L I4.
Remember to get rid of RWD, FWD save alot of money in R&D and manufacturing. Make the car more mid size and call it a "large car". The lighter weight should allow to make the brakes smaller. Dont worry about handling. Sack the styling department, and just keep making the car look bland. Make sure the inside is not user friendly, and do simple things like skimp on the seats. Just follow the pack and make the car a whitegood on wheels, I mean thats what the market wants! _

I still dont see why the taxpayer should be funding global corporations who have openly admitted they cant be bothered investing here.

Didnt Ford US just can the idea of importing Aussie built Onions, I mean Orions?

Originally Posted by nugget378

Sounds just like a big political article to me.

Yes Rudd is the devil and the unions are his evil demons..:

Bingo.

Originally Posted by auslandau

I would say that any and all companies philosophy would be exactly that! Of course they would love to survive without hand outs. I am sure at the board meetings they dont discuss how bad they can make a product or try and be as un competitive as possbile just so they can receive a grant? :

If any of these companies fail, it will be the g'ment of the time to cop all the flack for the loss of 1000's of jobs because they didnt help these large employers to keep people employed! It wont be directed squarely at the companies at fault! How do you compete with cars from Asia and their associated plants which are also helped by their g'ments?

So what you think is, the government offers some big bickies, stacks the market with tariffs, and controls labour, and the board would knock it back if the situation was rosey? Cmon, the boards duty is to share holders, not morality.

Business wanted free trade, what goes around, comes around. They helped set up the market, now they dont like it. For Christs sake, how many of the Asian cars are GM etc?

Youre being lied to, Ford Australia will close without doubt, sooner or later. Theyre just trying to milk the taxpayer first. However, that article, is pure election spin from an interested party to work choices, nothing more.

[Tote]

Originally Posted by vztrt

They can be competative...its easy...drop the I6, find a 3L V6 and a 2.2L I4.
Remember to get rid of RWD, FWD save alot of money in R&D and manufacturing. Make the car more mid size and call it a "large car". The lighter weight should allow to make the brakes smaller. Dont worry about handling. Sack the styling department, and just keep making the car look bland. Make sure the inside is not user friendly, and do simple things like skimp on the seats. Just follow the pack and make the car a whitegood on wheels, I mean thats what the market wants! _

How did you know ford are planning too import the Taurus again???
Tote

[SB076]

Forget the political rubbish but this effects all industries (not just automotive) Basically all kinds of labor are cheaper overseas (as there living conditions are not as good as what they are here) and I beleive its in the governments interest to protect Aussie jobs.

Large corporations are already outsourcing local work to overseas and its not just manufacturing, telemarketing, engineering and accounting is being outsourced due to cost - due to the strong economy at the moment unemployment is low, however this can and will change.

[Powdered Toast Man]

Originally Posted by 4Vman

You make some very good points, while its one thing to need govt assistance to be competitive you also need to see what companies from the asian region get in form of breaks and assistance...
As the Aussie dollar climbs our local car industry gets shakier and shakier.. then combine that with the ever growing range of brands and products being imported..
IMO we have too many car companies and import models forsale in Australia, some have to go for the good of everyone.
If any of the Companies selling local manufactured vehicles fall over the ripple (or tsunami) will create a domino effect to the wider manufacturing industries that will be frightening.. Remember, the local car manufactureres are largely assembly houses, a fair % of parts come from outside suppliers who collectively employ far more people than the car companies themselves.

Amen. I think it was quoted somewhere that for every worker at a car company that loses their job 3 at the suppliers lose theirs. So if one car maker closes it could mean that 3 times as many supplier workers lose their jobs too.

They need to stop reducing the tarifs on imports so the aussie built cars can be more price competitive in the market. Sure they're not exactly what people want but if you limit the availablity then they will buy what they can. Sounds like a bad way to live but it's what is needed to keep the aussie manufacturers alive at the moment. I'm not really worried about no longer having an aussie designed or built car available to buy but I am thinking of all the workers.

The aussie dollar is worth too much. We wanted to be globally competitive but I think we have shot ourselves in the foot. I can't remember the aussie dollar being worth so much in my entire life. We don't represent a good investment anymore.

[fmc351]

Originally Posted by SB076

Forget the political rubbish but this effects all industries (not just automotive) Basically all kinds of labor are cheaper overseas (as there living conditions are not as good as what they are here) and I beleive its in the governments interest to protect Aussie jobs.

Large corporations are already outsourcing local work to overseas and its not just manufacturing, telemarketing, engineering and accounting is being outsourced due to cost - due to the strong economy at the moment unemployment is low, however this can and will change.

Unemployment isnt low. The figures are fudged. Do you really consider someone as employed when they only get 1 days work a week?

What youre asking for is protection, which is against free trade agreements. Which give you your cheap mobile phone, the cheaper tyres, cheap rims, the cheaper clothing, the cheaper well just about anything they can make in China or any other country with cheap labour. A simpler , and workable system, is no free trade agreements.

Now, how many of you want it both ways?

What people seem to forget, is the flow on effect (the same thing being mentioned here) of any downward pressure on wages. Most just see the first layer. When that industries wages are lower, there is downward pressure on other industries, followed by less disposable income for more and more people. Meaning all you self employed people need to drop your prices to get their business, they just cant afford you.

[vztrt]

Originally Posted by fmc351

I still dont see why the taxpayer should be funding global corporations who have openly admitted they cant be bothered investing here.

Didnt Ford US just can the idea of importing Aussie built Onions, I mean Orions?

The handouts were apart of the deal with the four car manufactures to drop tarrifs. The government does get together with these companies and discuss their plan, as they play a big part in the countries economy.

Ford US would never have imported Orion in the first place (or really small quantaties) as the Unions have the car manufactures by the balls. If orion was exported it would have been to the middle east, which is a more viable market. Ford did go for the LWB market contract over there but didn't get it (the only reason Holden still has the statesman). Now with the strong dollar, there is little to no profit in doing it. Exporting cars in this counrty isn't going to bring in a large profit, but being able to share the R&D costs (cause thats where most money is spent) such as having a world platform model and getting the vehicle built in different countries is a better and more viable option. One example is the I6 will be replaced with a V6, this will cut the R&D costs.

[SB076]

Originally Posted by fmc351

Unemployment isnt low. The figures are fudged. Do you really consider someone as employed when they only get 1 days work a week?

What youre asking for is protection, which is against free trade agreements. Which give you your cheap mobile phone, the cheaper tyres, cheap rims, the cheaper clothing, the cheaper well just about anything they can make in China or any other country with cheap labour. A simpler , and workable system, is no free trade agreements.

Now, how many of you want it both ways?

What people seem to forget, is the flow on effect (the same thing being mentioned here) of any downward pressure on wages. Most just see the first layer. When that industries wages are lower, there is downward pressure on other industries, followed by less disposable income for more and more people. Meaning all you self employed people need to drop your prices to get their business, they just cant afford you.

Governments around the world protect their industries through various guises, why should Australia be any different? Free trade was supposed to create a level playing field for all countries however I fail to see how it has accomplished this and I doubt a level playing field will ever exist. I do understand your point about having it both ways however I still beleive that protection is necessary and if this is against free trade so be it. I also agree with your last paragraph.

[fmc351]

Originally Posted by SB076

Governments around the world protect their industries through various guises, why should Australia be any different? Free trade was supposed to create a level playing field for all countries however I fail to see how it has accomplished this and I doubt a level playing field will ever exist. I do understand your point about having it both ways however I still beleive that protection is necessary and if this is against free trade so be it. I also agree with your last paragraph.

Im not for free trade, never was. When government and business tell you its good, look for the dagger.

[4Vman]

Originally Posted by fmc351

Unemployment isnt low. The figures are fudged. Do you really consider someone as employed when they only get 1 days work a week?

What youre asking for is protection, which is against free trade agreements. Which give you your cheap mobile phone, the cheaper tyres, cheap rims, the cheaper clothing, the cheaper well just about anything they can make in China or any other country with cheap labour. A simpler , and workable system, is no free trade agreements.

Now, how many of you want it both ways?

What people seem to forget, is the flow on effect (the same thing being mentioned here) of any downward pressure on wages. Most just see the first layer. When that industries wages are lower, there is downward pressure on other industries, followed by less disposable income for more and more people. Meaning all you self employed people need to drop your prices to get their business, they just cant afford you.

What if someone only wants to work 1 or 2 days a week? i.e single parent?
People keep on trying to discredit the unemployment figures yet every day i talk to people who complain they can't fill positions within their businesses and i know 3 people who work for employment agencies who CANNOT get enough candidates to fill positions... can you explain that if unemployment figures are fudged?

Back on topic.. There needs to be some temporary intervention in the car industry to correct the balance of localy manufactured V Imported vehicles.
This will help the local manufactures get back on their feet to look at improving their global offering..

[fmc351]

Originally Posted by 4Vman

What if someone only wants to work 1 or 2 days a week? i.e single parent?
whatever the point is, they dont figure into the unemployment stats. Which means that those stats are not accurate. Its like suggesting HP can be ascertained by measuring bore and stroke. Kinda leaves a lot out, yet the government like to spout it as a measure of the economy. Both sides will do it, its not political, just fact..
People keep on trying to discredit the unemployment figures yet every day i talk to people who complain they can't fill positions within their businesses and i know 3 people who work for employment agencies who CANNOT get enough candidates to fill positions... can you explain that if unemployment figures are fudged?
What, you want me to explain anecdotal evidence of circumstances Im unaware of? They dont try to discredit them, the disbelievers are just blind. Its been said so many times, and admitted to.
Back on topic.. There needs to be some temporary intervention in the car industry to correct the balance of localy manufactured V Imported vehicles.
This will help the local manufactures get back on their feet to look at improving their global offering..

LOL. If they cant compete now, they never will. Youre just pouring taxpayers dollars into Ford et al. pockets to fight off the inevitable. It isnt like this is the first time taxpayers dollars have been spent on it, and wont be the last. The answer is elsewhere. Free trade is killing the country, and employment in manufacturing is going offshore.

The economics is simple. Manufacturing jobs will go, the people in those fields will need to retrain into other areas. The people already in those areas will move to new areas as competition makes business harder, competition brings prices down. Sooner or later, there will be people going into your field, bringing your prices down. Youll move on, field is too specialised, thats nice. Its not true for most Australians though. A storeman is a storeman, a courier is a courier. (OK, not quite, but you get the point). If all of a sudden there is a flood of storeman, Id hate to be employed in that field. If i was a builder, Id be concerned that less and less people can afford my services as the issue spreads to other jobs than storeman. Which flows onto sparkies and plumbers. Which in the end, flows onto accountants and shop keepers, butchers, you see where this is going.

The balance will always remain the same, we just shuffle the deck. We get cheaper goods by importing, but then we need to lower wages to compete. Defeats the initial purpose. The only thing that happens, is we get stuck with FWD V6 Korean Fords that have build quality of a Kia as we no longer control the Aussie car market.

I dont have an issue with keeping Ford or Gm in Aus, its how we go about it. Injecting tax funds into it is chasing your tail. We need to look at the root cause.

[sleekism]

Originally Posted by |||

are we really any better off supporting these companies?

sure they pay wages to aussies, but if the companies are just propped up by the tax payer anyway maybe we should cut out the middle man and invest in aussie companies instead

Well I think while the original Button plan had good intentions but it failed to predict that the Australian dollar would rise to such enormous levels. Also the tariff discount that SUV imports received is flawed.

People try and say people are downsizing but in reality more four wheel drives are being sold than ever before magnified by the flawed system that gives lower tariffs for SUV imports. The Government should have been offering assistance for the locals to develop SUV's. Thank God Ford had the foresight to introduce the Territory but in all honesty it came ten years too late. Ideaally all four locals should have been producing their own Territory's.

This can't be reversed but the fact remains that it would be very unwise to destroy the local industry. Australia is steering towards an economic crisis. The Howard Government encouraged a housing boom which has the result of overinflating house prices and putting millions dangerously in debt. Witness what happened in America with the mortgage crisis.

I believe we should keep the industry simply because of the business cycle. What is going to happen when the dollar falls back down to 60 cents to the US. Are we willing to pay one third more for our imported vehicles.

I really don't care whether it's Labor or Liberal they should be helping the locals. Maybe instead of the current system simply make the purchase of a locally built vehicle with at least 50% local content tax deductible??

[aualright]

Originally Posted by nugget378

Sounds just like a big political article to me.

Yes Rudd is the devil and the unions are his evil demons..:

Shanahan is a typical "fishnet stockings under the pinstripe suit" conservative. In fact, the Australian newspaper is shamelessly conservative.

****

[nugget378]

Originally Posted by aualright

Shanahan is a typical "fishnet stockings under the pinstripe suit" conservative. In fact, the Australian newspaper is shamelessly conservative.

****

It stood out like flouro painted dogs bollocks to me,and ive never heard of shanahan or read the Australian in my life.

Another example of our great impartial media towing the conservative line,its quite understandable,after all newspapers are owned by business men with fingers in a great many pie's no doubt.

What gets me,is how many swallow there crap hook line and sinker.

Its quite amusing actually,the Libs are the ones spouting all this free market stuff,yet will throw blame as a smokescreen when they have to go against their own dogma to protect business men.
Using the guise of protecting workers jobs no less,
but blaming those very same workers through their own union for the problem..

[Tles]

Because the Japanese property market tanked several years ago there is now a huge pool of housewives in particular who are borrowing funds or using the household reserves to trade on currency, Aussie dollars seems to have been a favourite. Just a few housewives from the land of the rising Toyota driving up our dollar with their several hundred billion dollars in investment funds, often borrowed on their credit cards say 10,000 at 2.5% per annum. If I could borrow at that I would too.

[RPO83]

I was going to discuss the AISAG and their research into the automotive industry and government grants but this thread has turned into a pile of garbage like a few other political bashing threads have become.

[dave351cid]

top news headline on the yahoo news home page states that the motor industry denies the existance of any such letters.

smells a lot like political bull pit coming up to election time. another scare campain.