Tough Times Ahead

[cobramania]

I think without a doubt, it's going to be tough times ahead for the entire automotive industry (among others).

Over the past 6 months or so, 3? Ford dealers have closed in Sydney alone, with another one going in the next month, other brand dealers have gone too.

Also with Ford shuting up shop in 2016 if not before, & I'd say Holden won't be far behind, with Toyota following.

Only the strong will survive, but as we've seen, the marketplace has taken it's toll on even the biggest of companies, Ford & GM, so it's going to be near impossible for the little guys to survive unscathed.

Yesterday afternoon a mate of mine walked away from his Smash Repair business of around 30 years. He was a few months behind on rent of his workshop, & cash flow has been tight for some time, but he was trying to trade out of it.

Yesterday it all became too much, & he collected up a few hand tools, took a few customer cars who's jobs were almost finished, shut the doors & walked away.
Leaving the rest of the tools, paints, some parts, 3 or 4 hoists, the spray booth, 2 large diesel generators, & about 5 personal project cars in various states of repair/restoration, for the landlord to sell off & recover the rent + make any profit he wants from the sale.
He'll finish off the customer cars himself using another workshop & payup any small creditors with the last of the insurance payments from the customers, then walk away empty handed.

I'm not sure if he's taken his Variety Club Bash car or left it?
He competes in the Variety Club Bash every year & has done so for about 10 years now. Even if he's kept the car, I doubt he'll have enough money to compete next year, so a very good charitable cause has also lost funds/donations & become a innocent victim.

About 8 other staff will/have lost their jobs as a result. Not good this close to Christmas, but there was nothing else he could do, with costs rising, insurance companies screwing repair prices down, often to below cost so corners have to be cut. Everyones losing out here & no one will win in the end.

Unfortunately I predict come 2017 Aus will be in a major recession, with many out of work, little money around to spend, with the auto industry being just the start, & there's little the current government can do to avoid it.

In my industry also, (Air Conditioning), in the Sydney, Central Coast & Hunter areas, I know of at least 25 A/C installation companies who've shut up shop in the last 3 months with more to come at the end of this summer season (around March/April). Some of the older guys have retired early, younger ones are looking to move on to elsewhere (another industry). My own boss is very seriously (almost confirmed) to be giving it away & retiring at the end of the season.

[mechanic]

I'd be interested in hearing the possible reasons for this scenario.
Several people in the past few weeks have stated similiar opinions to me.

[Franco Cozzo]

A workshop a mate is working at (Auto electrical business), work is the slowest its been since the 1990s when they started.

People just aren't taking their cars in for work at the moment, odd.

We've got lots of work on but accounts on stop everywhere.

[Agile]

Jeez. I was thinking NSW was the best performing state, besides WA. Sad. Here in SA the domestic building industry is at its lowest in thirty years. Every subby is flat out undercutting the next bloke to just get some work which means there is no, and I mean NO fat left in the pricing. When I win a job it is on pay rates of 5 years ago, and falling.My personal income is HALF !! of what it was last year and last year was 30% down on two years ago. We have worked on average 3 days a week this year. Which means not one dollar is being spent where it doesn't need to be spent and that situation just rolls on through the economy. Forget what the pollies tell you, we are in a recession now. Somehow it just doesn't come out in the stats.

Oh, and SA is FLAT BROKE !!!! Worse than when we experienced the State Bank Disaster. Next 5 years look pretty bleak. Save what doe you can if you are a " little guy".

[prydey]

disposable income is tight. some things that were once routine, or normal, are now luxuries that slide down the priority list.

there are many industries that don't make the news. my industry (printing) is also on the slide. we were undercut on a job by $5000 by china. that included flying the client over there to view the job on the press, and shipping. how can you compete with that. its not like the equipment or paper is different.

there just isn't a lot of money changing hands in general at the moment.

[nstg8a]

I work in transport/warehousing and we are busy as, the boss has turned away new clients in the last few months.

We've just taken on Costco as a client, my god they are doing nothing for the local economy unless its cheaper than overseas suppliers.

The entire shop fit out is coming to us in containers from Asia, virtually nothing will be sourced locally.

[TC200six]

Originally Posted by Big Damo

A workshop a mate is working at (Auto electrical business), work is the slowest its been since the 1990s when they started.

People just aren't taking their cars in for work at the moment, odd.

We've got lots of work on but accounts on stop everywhere.

I know a mobile EFI specialist that garages use and he was saying that some workshops are having days with no work booked in during the last few weeks. It's not just automotive, the owner of a cafe near where I live says business last year was the slowest in all the 10 years he's been there and has reduced business hours because of it.

[Rodge]

& about 5 personal project cars in various states of repair/restoration...

That bit stood out like a sore thumb. A reasonable percentage of small business owners indulge their passion(s) more than is sometimes in their best interests.
I know of one small local panelbeating business where the owner spends over $60,000 per annum racing rally cars, then complains that times are tight and gives his few staff Jack Shyte in the way of a Christmas bonus. Some of the inefficiencies I see as an accountant with small business's really amaze me. People making $150,000 per annum and claim they're flat broke and can't afford to pay their tax More often than people would imagine, a business owner can be really good at what it is they do for a business and completly hopeless managing their finances.

I wonder how many of these business owners are sucking out large monthly drawings to pay for their jumbo house mortgages ?

[Bluehoon]

It's a bigger problem than realised.
At work we're coming into the busiest time of the year and we're not even starting to see signs of life let alone getting busy.

It's a worry and appears to be across many sectors. Consumer spending is at a stand still and in effort to start it, everything keeps getting outsourced to drop the price.

It's unsustainable and we're in for a reality check. Clear out your debts and work on a cash only basis - we're headed for tough times.

[stevz]

I think our ridiculously overcooked property market is to blame for a lot of this. When people need to mortgage themselves up to the tune of $600,000 for an average suburban home, it's obvious that there isn't going to be much disposable income left after servicing the mortgage payments.
Yet here we have again all the headlines screaming 'property boom' and people falling over themselves to pay ridiculously inflated prices - can people really be that stupid?
I personally believe that this country is headed for one hell of a major recession and with it will collapse the property market. There will be a lot of people in negative equity when this happens and only then will they start to see what pain really is. It's only a matter of when, not if...mark my words.

[superyob]

Originally Posted by cobramania

I think without a doubt, it's going to be tough times ahead for the entire automotive industry (among others).

Over the past 6 months or so, 3? Ford dealers have closed in Sydney alone, with another one going in the next month, other brand dealers have gone too.

Also with Ford shuting up shop in 2016 if not before, & I'd say Holden won't be far behind, with Toyota following.

Only the strong will survive, but as we've seen, the marketplace has taken it's toll on even the biggest of companies, Ford & GM, so it's going to be near impossible for the little guys to survive unscathed.

Yesterday afternoon a mate of mine walked away from his Smash Repair business of around 30 years. He was a few months behind on rent of his workshop, & cash flow has been tight for some time, but he was trying to trade out of it.

Yesterday it all became too much, & he collected up a few hand tools, took a few customer cars who's jobs were almost finished, shut the doors & walked away.
Leaving the rest of the tools, paints, some parts, 3 or 4 hoists, the spray booth, 2 large diesel generators, & about 5 personal project cars in various states of repair/restoration, for the landlord to sell off & recover the rent + make any profit he wants from the sale.
He'll finish off the customer cars himself using another workshop & payup any small creditors with the last of the insurance payments from the customers, then walk away empty handed.

I'm not sure if he's taken his Variety Club Bash car or left it?
He competes in the Variety Club Bash every year & has done so for about 10 years now. Even if he's kept the car, I doubt he'll have enough money to compete next year, so a very good charitable cause has also lost funds/donations & become a innocent victim.

About 8 other staff will/have lost their jobs as a result. Not good this close to Christmas, but there was nothing else he could do, with costs rising, insurance companies screwing repair prices down, often to below cost so corners have to be cut. Everyones losing out here & no one will win in the end.

Unfortunately I predict come 2017 Aus will be in a major recession, with many out of work, little money around to spend, with the auto industry being just the start, & there's little the current government can do to avoid it.

In my industry also, (Air Conditioning), in the Sydney, Central Coast & Hunter areas, I know of at least 25 A/C installation companies who've shut up shop in the last 3 months with more to come at the end of this summer season (around March/April). Some of the older guys have retired early, younger ones are looking to move on to elsewhere (another industry). My own boss is very seriously (almost confirmed) to be giving it away & retiring at the end of the season.

I vaguely remember some financial 'guru' on TV a few years back saying that 2020 was going to be a disastrous year, but I don't remember why...

[Robdogg]

Was vaguely watching some abc program this morning and they said the export business accounted for 60% of GDP in the 1960's but now it's like 10% and farming was around 2% of that and most of the rest was from mining. Got a mate that worked at pilkington (glass manufacturer) that has now closed down because it's cheaper for glass customers to buy and ship and deliver to their door from china than it is the just buy local. I know of a lot a businesses just scraping by and I know some that are borrowing money to cover wages/expenses hoping things will get better but as most people know unfortunately australia is going down hill fast and I wouldn't be surprised if it goes like some European countries where they barter because most won't have money or the money they have won't be enough to buy bread.


Sent from my iPhone using Tapatalk

[Rodge]

I think N.Z. might be starting to look slightly better positioned on the world trade front.
People have to eat and the N.Z. dairy industry alone supplies enough Milk products to feed 100 million people, not too bad for a nation of 4.5 million people. But you never know, one thing is for sure and that is that the mining industry is cyclical, what is down now will come back into demand at some stage...

[mr smith]

Originally Posted by cobramania

Unfortunately I predict come 2017 Aus will be in a major recession, with many out of work, little money around to spend, with the auto industry being just the start, & there's little the current government can do to avoid it.

Yup, we have had a shed load of people chasing up quotes and you can sense the desperation. Management are not going through with many jobs though and I get the feeling they are weighing up the near future of our operations.
I fully expect my current job to disappear by 2015.
The ball is already rolling down the hill and gaining momentum.

[roberts]

Originally Posted by stevz

I think our ridiculously overcooked property market is to blame for a lot of this. When people need to mortgage themselves up to the tune of $600,000 for an average suburban home, it's obvious that there isn't going to be much disposable income left after servicing the mortgage payments.
Yet here we have again all the headlines screaming 'property boom' and people falling over themselves to pay ridiculously inflated prices - can people really be that stupid?
I personally believe that this country is headed for one hell of a major recession and with it will collapse the property market. There will be a lot of people in negative equity when this happens and only then will they start to see what pain really is. It's only a matter of when, not if...mark my words.

until somebody address the elephant in the room, which is negative gearing things will only get worst. I believe in 1987 was the last advertised change to this middle class welfare system and it was quickly shot down by the real estate industry makes sense for them to protect there interests, so whilst saving the exorbitant deposit for a home people aren't spending money in the rest of the economy, the higher houses go the more that needs to be saved. The only people that win from this are the real estate industry and the banking industry, it does serve as a carrot to keep people employed but if your only in a job to pay the mortgage how efficient will you be if you are unhappy and trapped in the position. Houses are overvalued by 60%, it is one big asset bubble that is only being fueled by lower interest rates and will continue till interest rates are at 0%, when rates start to go up pop goes the dream.

[mr smith]

Originally Posted by stevz

Yet here we have again all the headlines screaming 'property boom' and people falling over themselves to pay ridiculously inflated prices - can people really be that stupid?
I.

The punters are that stupid.

That said a mate in the industry was telling me that a massive amount of the properties for sale are under bank instructions but not advertised as such because they fear it will scare the public if they know the true sentiment out there.
I feel the media are at it again to cash in. Any guess what the biggest earners are in the paper world, the real estate section.
Lots of money to be made selling advertising space boosted by a "boom"

[prydey]

Originally Posted by stevz

I think our ridiculously overcooked property market is to blame for a lot of this. When people need to mortgage themselves up to the tune of $600,000 for an average suburban home,

to a point. people don't have to buy or spend that sort of coin. too many people want to start out life where their parents are currently at. you know, nice house, nice car, lots of luxuries, hobbies etc etc. no one wants to leave home and buy a house within their means that looks like a run down shanty. everyone wants to have it now.

well, now, its starting to take its toll and many are feeling the pinch. overtime dries up so those that rely on it start to point fingers at the economy or inflation etc. cost of living goes up, rates go up etc etc, but because so many are living so close to their limit, or beyond their limit, it impacts hard.

once companies start dropping prices in a bid to maintain volume, its a race to the bottom. its not sustainable.

[mr smith]

Wage cuts are needed, unfortunately there will be pain in our realignment with the rest of the world.

[XR Martin]

Across the road from our work is a large engineering/welding/fabrication business.
A few years ago they bought the site next door to it and expanded into there as they were so busy. I reckon the amount of employeers there would have numbered over 30.

Today they are real quiet, some days they dont even open, and even on a good day there wouldnt be more than 10 guys there.

And this is in the Canberra area where things have always generally been good...

[roberts]

Originally Posted by prydey

to a point. people don't have to buy or spend that sort of coin. too many people want to start out life where their parents are currently at. you know, nice house, nice car, lots of luxuries, hobbies etc etc. no one wants to leave home and buy a house within their means that looks like a run down shanty. everyone wants to have it now.

well, now, its starting to take its toll and many are feeling the pinch. overtime dries up so those that rely on it start to point fingers at the economy or inflation etc. cost of living goes up, rates go up etc etc, but because so many are living so close to their limit, or beyond their limit, it impacts hard.

once companies start dropping prices in a bid to maintain volume, its a race to the bottom. its not sustainable.

you are correct, but the thing is most of the run down shanties get snapped up by investor looking to flip it and make a quick buck, they don't care about condition because they never live there. Its hard to buy a run down place move in then start doing the repairs it is possible but hard, most of the derelict houses go to auction, so you bidding against people that have negative gearing in the back pocket and other assets, that will out bid just because they can.

[roberts]

Originally Posted by mr smith

The punters are that stupid.

That said a mate in the industry was telling me that a massive amount of the properties for sale are under bank instructions but not advertised as such because they fear it will scare the public if they know the true sentiment out there.
I feel the media are at it again to cash in. Any guess what the biggest earners are in the paper world, the real estate section.
Lots of money to be made selling advertising space boosted by a "boom"

this doesnt surprise me, the bank never losses. If they keep churning punters through mortgages and they default its either covered by mortgage lenders insurance or the bad debt gets moved to a debt collector, i would be suprised if a bank every shows a loss.

[prydey]

the 'run down shanty' comment was more to do with in comparison to a $600k house, not literally a house that needs money spent on it to be able to live comfortably in it.

in adelaide you can still buy houses around $200k. they may not be in the 'good' suburbs, and may not have nice big rooms and big yard or pool etc, but they are tidy and will do the job. no one HAS to have a big tv, or a tv in every room and foxtel. no one HAS to have 5 star kitchens, show house style adornments etc. ask your parents what their first house looked like, and how they lived and made ends meet. it might shock a few of you. until many accept this and realise that life doesn't 'owe' them a living, the situation will only get worse.

inflation won't slow down while everyone is trying to outdo the next bloke.

[csv8]

Government charges are out of control
GEOFF Trewin is worried that some staff at his Rocky Harley-Davidson store may soon be out of a job after he was hit with an $81,000 bill.

The bill was from the Rockhampton Regional Council for infrastructure charges for his business renovations, despite not making any changes to infrastructure.

"I don't want to be in a position where I have to cut costs because of ridiculous council charges that don't make sense," he said.



Last year he built a Stellarossa coffee shop in his business.

Geoff claims a council town planner told him he could complete a self-assessment.

After encountering a problem with the plumbing he went back to the council and was told he needed to make an application for a material change of use.

After putting in a submission Geoff was charged more than $6000 for council to read the document, and then given a bill for $81,567 for infrastructure charges.

"The infrastructure was built here 80 years ago … it used to service army and mining vehicles," Geoff said.

"Almost two thirds of the building was servicing heavy vehicles; now we're using a very small percentage to service motorcycles. There's actually a far less impact on the infrastructure now."

Council chief executive Evan Pardon said infrastructure charges applied to uses, not construction, and consequently a change of use would attract an infrastructure charge irrespective of whether any building works occurred.

Mr Pardon said Geoff was actually charged $172,818 and given a $91,251 credit.

Venture Improvement director Ray Conder said the charges were an impediment to business in the region.

"The charges coming through are not relative to the type of development going on," he said.

"These charges mean only large businesses can meet the commitment."
http://www.themorningbulletin.com.au...rewin/2086226/

[Dash_XR]

I just bought a house, I probably shouldn't of read this thread lol.

People are paying stupid prices for houses cause everyone want's a Mc Mansion 2 minutes from the city. You can still buy a nice new 4 2 2 for under 400 in Melbourne you just have to sit in traffic for a couple hours every day if you work 9-5. The difference between my rent and mortgage (better house same suburb) is $50 extra a week.

I don't think staying out of the market is wise at the moment, just be a bit more realistic with what you can afford if **** does hit the fan.

That cosco things pretty low but, that shouldn't be allowed/tolerated.

[Robdogg]

Originally Posted by XR6 Martin

Across the road from our work is a large engineering/welding/fabrication business.
A few years ago they bought the site next door to it and expanded into there as they were so busy. I reckon the amount of employeers there would have numbered over 30.

Today they are real quiet, some days they dont even open, and even on a good day there wouldnt be more than 10 guys there.

And this is in the Canberra area where things have always generally been good...

I've got a mate who's in the same industry and most of his work now is to design components or machinery etc and when it's all finished the companies buy it along with the rights to it then send it overseas to copy then mass produce it because it's cheaper.


Sent from my iPhone using Tapatalk

[Syndrome]

The global economy is like watching a train crash in slow motion. Australia is not immune from what is occurring.

[flooded one]

I worry about the future of Australia a fair bit. I blame most of it on greed

[prydey]

Originally Posted by Syndrome

The global economy is like watching a train crash in slow motion. Australia is not immune from what is occurring.

i've heard many say that australia didn't survive the GFC, we just postponed it a little. probably true. we staved it off for a while but can't avoid it forever.

[Syndrome]

Originally Posted by prydey

i've heard many say that australia didn't survive the GFC, we just postponed it a little. probably true. we staved it off for a while but can't avoid it forever.

Why did the government pump money into the RBA and also lift out debt ceiling? What are they preparing for?

[BennyH]

I am a landscaper in Melbourne, I have a passion for my job, however when times get tight understandably jazzing up ones garden and getting some paving done is the last thing on many peoples minds. People obviously tend to divert away from these 'wants' and towards the 'needs' when financially stricken. I think that landscaping reflects quite well the financial situation that many are in. We had 6 inquiries last week and completely booked out until March next year, we can no longer accept any more work. Money is still certainly splashing about for these wants, with the majority of clients being normal middle class people. For me the current economy is relatively strong, I hope this is the case for others as well.