Ford to shut down in Australia

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From the AFR (and through my Geelong rumour mill):

Ford Australia is expected to announce on Thursday that it will shut its car plants in Melbourne and Geelong in 2016, causing the loss of about 2000 jobs.

The company has scheduled a press conference for 10.45am at its assembly plant at Broadmeadows in Melbourne’s northern suburbs.

From the SMH:

A statement from acting Industry Minister Craig Emerson has just been sent out:

“The Government is aware of reports that Ford is making a significant announcement about the future of its manufacturing operations.

“In these situations our top priority is ensuring workers and their families in regional communities are looked after.

“Workers need to be given every opportunity to find new jobs and regional economies and communities need to be assisted in securing new investment and employment opportunities.

“The Government will have more to say when Ford has made its announcement. But I can assure you making sure the company’s workforce and regional communities are looked after will be our top priority.”

AAP reports Ford is expected to announce a huge cut to its Australian operations from 2016.

Fairfax Radio is reporting that it will close its Broadmeadows and Geelong factories from 2016.

Ford Australia employs about 3100 people in Broadmeadows, Geelong and its five regional offices.

Sell ’em, dirt. Oh, that’s right…

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Comments

  1. Cue the wing nuts for a bit of Australian car-bashing … too expensive, unreliable, good riddance etc

  2. reusachtigeMEMBER

    This will be election destroying news! The masses may no longer buy the stuff but they sure as hell don’t want it lost.

    • dumb_non_economist

      Yes, I’ve always found that somewhat bemusing. We want homemade cars, except to we don’t won’t to buy one.

    • Ortega you’re forgetting! We bashed farming to death decades ago!

      The future lies in sevice industries. A high proportion of service industries with high wages is the desired characteristic for advanced economies.

      We can have high immigration to make the market for the goods;
      pay ourselves high wages because we don’t have to compete with anything; import everything we need;
      build lots of beautiful retail malls; print any money we need. After all we issue our own currency;
      all get rich out of booming Real Estate kept bubbling with ever lower interest rates;

      The environment will be improved. We’ll have no nasty factories or diesel motors spewing fumes. No more waste products from factories and mines.
      It’s ll good!!!!

      We’re fast approaching our ideal state of the nation we have been trying to build for 50 years. Let’s celebrate our arrival into the glorious sunshine of the new economy so sought after by modern economics.

      • dont forget Flawse, the agricultural processing that remains has largely been sold off too

        I read your post yesterday old coq, I think you, like me, could do with upping the prozac intake.

      • Stuff the prozac! Just give me strong drink! I’ve had this nightmare my whole life.
        I think I’d prefer to be non-compos when it plays out!

      • Gunna (I’m a bit off topic) Re the processing being foreign owned.
        As you may be aware it’s a particularly dangerous situation.
        For example our beef industry processing is pretty much all foreign owned yet it amounts to only 1 or 2% of the output of the companies that own it. It would not be too hard to imagine a situation where some bloke, sitting in his mansion in Massachusetts thinks ‘This damned operation in Australia is all too hard for the money involved. I’ll shut it!”

        What really gets my goat is all the politicians etc running around saying how smart we are. Fair dinkum! We have to be the stupidest tribe of no-good stupid morons that have ever walked the face of the earth!

      • Flawse

        “The future lies in service industries. A high proportion of service industries with high wages is the desired characteristic for advanced economies”

        Couldnt agree more but also the healthcare and IT industries and create some innovation…. like I said the other day in some of the posts Australia has some good talent in these areas and they could create more jobs.

      • The crucial thing is: where are the “primary” sources of national-economy income and the “tradables” going to be. If you are going to have a services-based economy, you need to be providing a heck of a lot of those services to offshore clients, to make it a viable basis of an economy.

        London and the UK are near unique in this. Good luck trying to match it. And the UK economy is ending up stuffed anyway due to its policies wrecking every other “tradables” part of the economy BUT heavily-urban-based “services”.

      • LBS If you knew me better you’d have known my sarcasm dial was on extreme high.
        I did see your post and it was a good point. Still we won’t get these sorts of industries with an A$ so extremely artificially inflated. We don’t have to kill everything else to have them. We need these new industries as well as keep what we’ve got (pretty much)!

        The crap about a free and floating exchange rate, free of all capital controls including over-night speculative, has to be killed off once and for all. It is just leading us to our demise.
        Similarly the zero interest (read negative RAT)rate has got to stop. We need to save to have money to invest in our own country.
        Kill RE and build factories, mines and farms.

  3. The closure of the Ford plants in Australia will see an estimated 2000 jobs axed over the coming 24 months. The flow on effects can be expected to take out as many positions again.

    Geelong, which is a canary in a coal mine of the state of Victoria which is a canary in the coal mine of Australia, if ever there was one, is in the position of having its major globally exposed employers :-

    Ford shutting up,

    Shell with the Corio refinery on the market (and the company reportedly very keen to offload it),

    Alcoa which has repeatedly made noises about shutting up Point Henry – about which I have seen data indicating it is the second highest cost plant that Alcoa has worldwide.

    Remember that employment is generally a lagging indicator. The crushing of the Australian globally exposed sector is a direct consequence of the Government (both sides of politics) and RBA policy to fit in the mining boom.

    And those job losses can presumably be expected to felt in real estate and retail (in particular) for some time to come.

      • Mate, I know it sounds crazy (given the untold numbers of empty apartments sitting there around Melbourne at the moment), but I would imagine there will be A grade morons proposing that idea to the clowns which festoon Victorian politics about now.

      • And I’m sure they will have Mathew Guy’s full support. After they buy a ticket to his fundraiser of course.

    • On a completely selfish note, I am more worried about this will affect my beloved Cats!

      Will they were black armbands this weekend?

    • “The crushing of the Australian globally exposed sector is a direct consequence of the Government (both sides of politics) and RBA policy to fit in the mining boom.”

      No! That’s not true! This is a process 50 years in. It’s a direct consequence of our stupid self-indulgence over 50 years. Sure both sides of politics and the RBA are to blame. However, in the final analysis, they have given us what we wanted.
      This blaming everyone else particularly institutions has to stop. We have chosen to have too high a currency in order to finance cheap consumption, slef-indulgent lifestyles and real estate wealth for 50 years.
      It may not be too much longer to wait for the culmination of that process.

      • ” However, in the final analysis, they have given us what we wanted.”

        Er … can someone point me to the referendum in which we were directly, explicitly asked if we wanted to kill/sell off agriculture, manufacturing etc, via “free” market policies designed to make our industries less globally competitive?

        Don’t forget flawse, most folks don’t have a clue about the long term ramifications of policy decisions. Most have little choice but to either blindly accept (or, rarely, reject) whatever BS they are spoon fed by the conga line of “expert” talking heads parading across their TV screens.

        Yes, we have happily gone along with — embraced, indeed — the short-term self-indulgence rendered possible by the decisions of those “experts”. That does not, in my opinion, make us responsible for the original policy choices, or the consequences. To be responsible requires (a) foreknowledge and understanding of the risks, and (b) the power to actually affect the decisions made.

        The only thing we are responsible for, is our apathetic attitude. In particular, wrt the manifest failures of these grossly over-remunerated tea-leaf readers (“experts”) and public trough-swillers.

      • C.M.BurnsMEMBER

        citizens get the government they deserve.

        stupid people = stupid government and equally in reverse: a stupid government (or more accurately a series of stupid governments) = generations of stupid, selfish, ignorant voters. Which i think is Flawse’ point.

      • Op8
        While I have some sympathy and respect for your opinion in this regard I believe the nation killed off Agriculture with the full knowledge and consent of the majority of Australians. It’s not as if it has just happened. We voted for it election after election. Oh there was verbal diarrhea about it but, when it came to someone having to crimp their lifestyle a bit, we chose to sacrifice rural Australia.
        Again it has been a continual 50 year process. For me anyway the ‘whocoodanode?’ response is just not good enough.

        You’re right of course that it has been the stupidity and, more importantly, self-interest of those who rule us, one form and another, who are largely responsible for this. It has been a bidding process. We elected whoever gave us the highest bid for our immediate gain.

        I wonder though where does the responsibility stop? Shouldn’t we be responsible for taking an interest in the basic processes if we are going to cast a vote?
        I don’t pretend to have the answer to that.

        One thing is for certain. It’s time to stop ALL the BS. It’s time to stop pretending that we are somehow the smartest people in the world and admit we are the stupidest.
        It’s time to stop rewarding our self-indulgence that is financed by everyone else’s prudence and hard work.
        It’s time to stop selling our country off in exchange for modern trinkets and get back to some real production and exercise a bit of self-control and stringency.

        It’s not going to happen.

      • Op8 I’m on a diet of bitter pills this morning !!

        The people of Australia vote in a referendum on rural industries and people every day. Every day they go to a Supermarket and buy the $1 per litre bottle of milk (et al) They KNOW this is killing the dairy industry yet they save their $1 and consciously think …’F..k the farmers i’m the only one that matters!’
        Then WTF do they save for? To spend on a bottle of black sugary water that costs $3 per litre?

        P.S. As posted by someone else on the other Ford post we destroyed the Northern beef industry with the full support and knowledge of all those who live in the Sydney Melbourne Canberra triangle.
        They didn’t give a rats arse about consequences for farmers as long as their self-indulgent image of themselves was maintained.

      • drsmithyMEMBER

        Every day they go to a Supermarket and buy the $1 per litre bottle of milk (et al) They KNOW this is killing the dairy industry yet they save their $1 and consciously think …’F..k the farmers i’m the only one that matters!’
        Actually what most of them are probably thinking is: “groceries are expensive, am I going to be able to pay this week’s bills after I put food on the table”.

        Most people don’t have the luxury of being able to spend lots on food. Maybe we should look at how much of Woolworth’s profits could be paying farmers more, instead.

      • Flawse,

        I have to take drsmithy’s side on this one.

        People are (understandably) far more superficial, and ignorant, when it comes to understanding that “the knee bone is connected to the thigh bone…” than you give them credit for.

        The satisfaction of what is seen as the most immediate, pressing need (ie, keeping the grocery bill down) will always override any thought as to longer term consequences … and possible blowback that might affect them personally.

      • Doc and Op8

        Again warning i’ve taken my bitter pills this morning.

        Frankly this whole poor householder thing is tripe! Yes I know some workers are poorly paid and I’ve employed a few who are in that classification.
        However applying that to the population in general is just plain ridiculous. Most of the people we are talking about , around the cities, work in fairy well paid PS jobs, offices etc and are by almost any standard well off. They think they are being clever buying the $1 milk! They’re getting something else for nothing. Then they go outside and get into a new looking SUV!
        Then when you look half have tatts that they have literally spent thousands on.
        Frankly i’m over it all. It really is time to stop the BS.

      • ” Then they go outside and get into a new looking SUV!”

        And you will probably find that it was bought on credit debt. Like most if not all their other “assets” and “possessions”.

        Mate, I do get your viewpoint, empathise with it, and do not disagree with it. Just saying, I reckon you will find that – despite external appearances – many (most?) folks who have daily made a contribution towards the long decline in Oz ownership of productive industry, have done and continue to do so whilst largely ignorant of the long term consequences of their everyday choices.

        FWIW, and as every regular MB reader knows, I blame the Merchants of Debt … and usury more specifically … as being the ultimate root cause of all these ills.

      • Flawse,

        If MB was to audit your house, would we find you have paid top dollar to buy everything “Australian”?

        The milk example is particularly poor, maybe consumers buying $1/L milk are doing so because that is what it is worth, ie why pay $2.50/L for the same stuff when the extra $1.50 goes to marketing and other BS.
        Also if the milk was so damn valuable Australian farmers would be getting together, powdering it up and exporting it as infant formula. There seems to be constant supply shortages of the stuff, but all we hear is bleating about how farmers can’t get a good price for milk in the domestic market.

        That is without any considerations of cost of living pressures Australians face, where essentials (housing, insurance, healthcare, education etc) are inflating at more than the CPI. But hey at least iPads are getting cheaper so the RBA can pretend there has been no inflation and have another excuse to goose the property market further.

      • For god’s sake V You have 20,000 sellers and two oligopolistic buyers! How can that determine what milk is worth? Deal with reality here! Reality is that dairy farmers are all working for sfa. i’ve posted many times on the difficulty of changing enterprise as far as being a farmer goes.

        I’m not arguing for anything particular in regard to this point just the recognition that we don’t give a rats arse about whether farmers live or die as long as cities can go on living their indulgent lifestyles. That’s the political reality and it will go on until it can’t. We never have given a rats arse about farmers and their families and as near as i can tell from all the self-righteous bullshit we never will.

        FWIW I agree re ipads getting cheaper so we can pretend CPI inflation is low and have low interest rates. Just note that party of that low inflation is exploitation of farmers to an extent that cannot be sustained in the medium term or longer. So again the $1 milk is a piece of bullshit that is allowing the RBA to set low rates to boost housing!

      • Re buying everything Australian.
        First let me state I am an importer and seller of recreational products. So to that extent I contribute to the CAD etc etc etc. Obviously I used to be a farmer a long time ago. I was lucky to be a little bit more mobile than most of my friends.
        As previously posted on many occasions I am always on the look-out for an Aus business to make things here. Frankly given the current industrial, WHS and hostile govt environment (and i don’t mean Lib or Labor – I mean all the stupid lazy b….rds who keep their jobs no matter who is in power)I cannot find one worth the risk and aggravation. I don’t think there is such an animal unless you are a very big player.
        Even then, as evidenced by Ford, it looks like it will not pay. I do drive a 7 year old Mazda 3 because it was the best thing I could find in the size. I don’t think there is an Aus equivalent. Prior to that I drove Falcons and Holdens all my life and as stated I buy 2nd hand of those for the business.
        I have mostly Aus made furniture, mostly bought second hand, to get decent timber etc. My fridge is Aus made…not sure whether they are still made here as that was some 12 or 14 years ago. I rent so the rest of the house is irrelevant.
        Clothes other than knitted stuff it’s nearly impossible to buy anything made here.

        So no it’s not all Aussie made. Guilty if you like! However i do not buy anything ‘Homebrand’ as that just contributes to the power of Woolworths and Coles. I do NOT buy tasteless garbage fruit from chains.
        Note however i am not an Aussie family anymore.

        So that’s me. It’s not meant to prove anything. I’ll answer any question you want.

      • drsmithyMEMBER

        For god’s sake V You have 20,000 sellers and two oligopolistic buyers!
        Exactly.

        So, as I suggested earlier, maybe they are the appropriate target for rage, rather than the average ignorant punter who is just trying to save as much of his money as cost of living goes through the roof.

      • Well don’t get me started on Coles and Wollies either, it astounds me the ACCC are so impotent in investigating basic market distortions that have been created, such as how they protect their patch via challenging the DA of competitors etc. ACCC tob usy producing brochures about correct usage of hot water bottles. The one thing they should be focused on is the lack of retail competition/duopoly in many sectors of the economy.

        But who said there are only two buyers of milk? If farmers were to say stuff you Coles this milk is becoming infant formula for Chinese/Indians, what is going to happen to the price of domestic milk?

    • darklydrawlMEMBER

      Yeah, it is a worry for Victoria for sure. I also wonder about the cascade effect on the other local car manufacturers – and perhaps more importantly, the many thousands that are employed in feeding these companies via the parts supply and logistics chains.

      If nothing else it is going to impact heavily on confidence in Victoria, and especially Geelong.

      Regarding the Shell Refinery at Corio. Indeed Shell would dearly love to shut it down. All the Oil companies can produce hydrocarbon products far cheaper in Asia (Singapore in particular) and still get it shipped here cheaper than local production. No local Aussie refinery can complete – they are all marginal.

      Another Victorian risk is Exxon’s (Mobil) refinery at Altona. That is a marginal prospect at best. I know Exxon were very keen to shut it down years ago and whilst I can’t prove it, I suspect there was a political deal done somewhere to keep it open as the numbers didn’t add up then (and still don’t).

      Exxon did manage to ‘mothball’ Pt Stanvac in Adelaide. It was mothballed rather than ‘closed’ as the cost of keeping a skeleton crew on site indefinitely is still considerably cheaper than having to rehab the entire site so it is save for other uses.

      ‘Mothballing’ was also an easier sell to the SA State Government, who in turn could save some face about potential job loses et al.

      Pity as it is PRIME real estate land just south of Adelaide with gorgeous ocean views et al. But it will probably sit there rusting for the next 50 years.

      • I live just south of Pt Stanvac. The land that could have been flogged as clifftop paradise now houses the desal plant, which itself is in mothballs from new (it rained and now we don’t seem to need it).

        I doubt that Exxon will ever rehab that site. If it ever gets repurposed it will be industrial.

      • darklydrawlMEMBER

        Agree StevieRay. The cost of rehab just wouldn’t be worth it for them.

        Far easier/cheaper to keep it there and pay a few dozen guys to sit around playing cards for most of the week.

    • “The crushing of the Australian globally exposed sector is a direct consequence of the Government (both sides of politics) and RBA policy to fit in the mining boom. “

      +1.

      Know Your Enemy.

    • Don’t forget to turn out the lights down there Gunna. It might be our own Detroit the way it’s going. House in Norlane for $6K? Nah, that’ll never happen. Knowing this country those redundancies will go straight into more speculation. The agents will be successfully advising them to buy another house and double their money by 2023.

      • The reason why US Rust Belt cities have cheap dilapidated housing and UK Rust Belt cities have the same dilapidation but still absurdly high prices, is the UK’s “Town and Country Planning” system. This is actually an OBSTACLE to the sort of slow bottom-up rejuvenation taking place in US rust belt cities.

        Aussie’s policies resemble the UK’s. Sorry.

  4. Sad news if it comes to fruition. Weird that Ford has probably given more scope in adapting their locally constructed line-up with the Territory, which I thought had been a hit.

    What is even more sad, I doubt there is an Elon Musk type figure to be found amongst our billionaires….

    • The USA has a near monopoly on Bill Gates, Steve Jobs, Jeff Bezos, Sergey Brin types. There is a reason for that. It is not just an Aussie problem, the Euros have it too.

      • I have a nephew in that class. He did the initial theory for all the internet ‘on demand’ stuff that we now enjoy.
        He’s been in the US for 20 odd years! I doubt there is an answer to it.
        That said he now heads the research team for one of the electronic pieces we carry around and they employ mostly Indians. His explanation is that they UNDERSTAND the maths they are doing as a result of learning basic maths properly in school.

  5. And the flow on to small component manufacturers, sees them gone soon after.

    What will GM n Toyota do for small components?
    say “stuff it it is too hard here?”

    • For some years after the shutdown of the entire “NZ car assembly industry” (always a joke) more people were employed in one factory making alloy wheels for the latest European Ford Escort.

      Why is it so hard to see that you don’t need to play “do-everything first world nation” to keep an economy going?

      • No we just need to sell ’em dirt, buy more houses, and sell services to each other.

  6. The death of manufacturing in this country needs some press. This event – if true – may be the press that’s needed.

    As a senior engineer in the manufacturing industry, I’m here to tell you the need for serious attention on the plight of the sector is desperately needed.

  7. As a life long Falcon fan and having owned six Falcons I am never buying another Ford product. Nor will move my loyalty to Holden products.

    • Mining BoganMEMBER

      I didn’t think Australians bought either anymore anyway. Monster 4WDs in front of schools seem the go. Oh, and little Euros that offer terrible value compared to what they’re worth at home.

      • dumb_non_economist

        Mining Bogan,

        Yeah, but lots of brag value about the foreign car! Oh, I bought it because it’s “safer” and it looks really cute!

      • C.M.BurnsMEMBER

        to be fair as the (biased) owner of a little euro (golf gti, it fairly spanks every locally made car and most that come out of japan and s.korea.

        if Ford/Holden made a car anywhere close to as good they would be in much better shape.

      • C.M.BurnsMEMBER

        don’t however get me started on inner suburban SUVs. Best I sign off now before hulk-smash takes over.

      • Mining BoganMEMBER

        Mr Burns, I agree with you on how good the Golf is but for value for money I’ll keep my seven-year-old Commodore. Fitting four sets of golf clubs in the boot and four fat bogans in the cabin is a major drawcard.

        I mean, we are all amateur economists aren’t we? 😉

      • C.M.BurnsMEMBER

        Mining Bogan,that mental image made me laugh.

        I’d like to say that my partner will end up driving the inevitable people-mover when we do have kids but I fear I may be joining your ranks eventually.

      • Why?! Unless you have more than two kids why would you ever need more than a Corolla-sized vehicle?

        FYI: I don’t play golf and I don’t have to haul four fat bogans around.

        As for cars, I’ve owned a Golf, a Golf with a boot (Jetta) and now a Hyundai i30 diesel. The next car will be another Korean, because it works, it doesn’t break, its economical to run and service, and I get a five year warranty.

        If Australian manufacturers were to offer something similar (the Cruze comes closest) I would definitely consider it.

      • Yeah, but the Japs are now making absolute ass-kicking V8-engined large cars if Aussies really want them. Find one to drive and you will see just how far behind the Aussie car manufacturing industry is.

        The freedom to import used imports in NZ has led to boy racers driving lowered and hotted up Toyota Celsiors that piss all over any similar age and cost Falcon or Commodore in traffic light drags. Custom supercar makers like Invicta are now happily using Jap V8’s. Even the Jap “sixes” have long been capable of insanely high horsepower levels. Some of the young hoons in NZ were long since blowing away the Falcon and Commodore V8’s, in Nissan Skylines and Mazda 929’s. And they handled better too.

        I was a passenger once in a 1989 Honda Legend on a long twisty-road drive, that left a more modern Commodore V8 with an aggressive driver, for dead.

      • drsmithyMEMBER

        to be fair as the (biased) owner of a little euro (golf gti, it fairly spanks every locally made car and most that come out of japan and s.korea.
        +1

        On top of that, VW are one of the few Euro manufacturers who don’t put absurd price premiums on the cars they sell in Australia.

        if Ford/Holden made a car anywhere close to as good they would be in much better shape.
        In fairness, the new Focus is pretty good – but it’s not a Golf (and they don’t make it here).

      • drsmithyMEMBER

        Why?! Unless you have more than two kids why would you ever need more than a Corolla-sized vehicle?

        I imagine if you have two 6’+ teenagers, something bigger than a Corolla might be nice.

        Towing (large) things and going off-road also seem reasonably common endeavours and a bigger vehicle is necessary for both.

      • Towing (large) things and going off-road also seem reasonably common endeavours and a bigger vehicle is necessary for both.

        Contrary to popular belief no-one needs to tow things or go off road. These are most definitely luxuries that Europeans, Asians and most people outside of Australia and North America don’t enjoy.

        My (almost) teenage boy fits perfectly well in the back of the i30. In Europe, where last time I looked people were much the same height they are here, a Corolla-sized car is considered a family car. Anything bigger (e.g. Camry) is a “large” car.

        C.M.Burns: Holden make the Cruze. The old model was hamstrung by a dud engine but the new SRi is a lot better. It might not be the best mid-sized car you can buy, but its far from the worst, and if there’s a further 30% depreciation in the AUD it becomes much, much more attractive compared with fully imported rivals like the Golf, Mazda 3, Focus etc.

        http://www.caradvice.com.au/218722/2013-holden-cruze-sri-review/

      • Do I get a pass here from the anti-suburban SUV crowd when I buy mine later this year (courtesy of gold and AUD shorts)?

        I do live on acreage, and getting a dog and another little one – and I regularly need to tow things – surely I get a pass because of that?

        And no it wont be a Toorak truck…although melikes the new Range Rover..

      • drsmithyMEMBER

        Contrary to popular belief no-one needs to tow things or go off road.
        Contrary to popular belief, no-one needs anything bigger than a 30m^2 studio apartment, either, but few of us would argue people living in anything bigger should be ostracised.

        These are most definitely luxuries that Europeans, Asians and most people outside of Australia and North America don’t enjoy.
        I’ve holiday quite extensively in Europe, and I can assure you there are shitloads of cars there bigger than a Corolla.

        My (almost) teenage boy fits perfectly well in the back of the i30.

        I’m 6’2. With anyone taller than about 5’10 in the front of my Golf, sitting in the back is unpleasant for all but short journeys.

        In Europe, where last time I looked people were much the same height they are here, a Corolla-sized car is considered a family car.
        You can fit five adults – quite uncomfortably, but legally – in a VW Polo/Mazda2/Toyota Yaris-sized vehicle.

        You asked for reasons why people might need a car bigger than a Corolla. I’ll turn it about: why do you need a car as big as a Corolla ?

      • rob barrattMEMBER

        No one car fits the bill, it’s horses for courses. We have a Toyota Prado with a huge bull bar (didn’t ask for it, it came 2nd hand). We named the Prado “School Bully”. We bought it to tow a caravan for 6 months. We finally bought a house and with it a Suzuki Alto – “the Lawn Mower”, infinity to the gallon. The Prado is semi-retired and only used for bush trips.
        Apart from the obvious, the biggest difference between driving the 2 cars is how other drivers behave toward you….

      • I’ll turn it about: why do you need a car as big as a Corolla ?

        We looked at a Polo, Mazda 2 etc when we bought the i30, and I don’t fit. So I reckon that’s the threshold for normal-sized people. If you have little kids then maybe you can get away with a smaller car for a few years.

        I’m not ostracising anyone, I’m just saying that a mid-sized car will suffice for a family of four. You really don’t need a hulking great SUV or people mover as C.M. Burns suggested above. If you have three kids, then yes, you probably have to look at bigger vehicles.

        Do I get a pass here from the anti-suburban SUV crowd when I buy mine later this year

        No. 🙂

        although melikes the new Range Rover

        Well I like the Tesla Model S — the closest thing to a revolution in personal transportation for 100 years — but its bigger than I need and it will probably be $200K for the model with a decent range the way the AUD is heading.

      • If you actually use a 4×4 for what it was intended for (i.e. going off road), then I think it’s an excusable purchase. It’s when it’s primary purpose is to look good when picking up the kids from school or when driving to the coffee shop in the swanky parts town – that’s when it’s a worry.

      • drsmithyMEMBER

        We looked at a Polo, Mazda 2 etc when we bought the i30, and I don’t fit.
        There you go. That’s why people buy cars bigger than Corollas.

        I’m 6’2 and my wife is 5’11. If we ever have kids, it’s pretty much guaranteed they’ll be 6’+. I wouldn’t want to be sharing my Golf (or a Corolla) with a couple of 6′ passengers in the back for more than maybe 20-30 minutes at a time.

        Having considered this scenario, my two preferred options would be a VW Passat R36 or a Calais V8 Sportswagon – but that’s my inner hoon coming out. 🙂

        If you have little kids then maybe you can get away with a smaller car for a few years.I’m not ostracising anyone, I’m just saying that a mid-sized car will suffice for a family of four. You really don’t need a hulking great SUV or people mover as C.M. Burns suggested above. If you have three kids, then yes, you probably have to look at bigger vehicles.
        Look, I hate Toorak Tractors as much as the next guy, but there are quite good reasons to own a car bigger than a Corolla, and even good reasons (albeit fewer of them) to own SUVs.

      • DrBob127MEMBER

        my wife (6’2″) and I (6’4″) own an SUV for the sole reason that loading kids into their car seats in a sedan is just painful. We need (strongly prefer) a car that is higher off the ground.

        Most of the time my wife uses it while I am happy to bike/train to work.

        Not everyone has ducks disease and considers a Corolla to be a roomy vehicle.

      • I’m loving my Golf GTD – a bit less performance than the GTI but the fuel economy of a diesel. Not uncommon to see under 5L/100km around town, let alone on the highways. Fits two adults and two rugrats and their seats easily.

    • @The Lorax :p

      Dr Smithy:
      If you have little kids then maybe you can get away with a smaller car for a few years…Look, I hate Toorak Tractors as much as the next guy, but there are quite good reasons to own a car bigger than a Corolla, and even good reasons (albeit fewer of them) to own SUVs.”

      Exactly. I guess I don’t care as much as I used to about Toorak Tractors etc, since I’m home 90% of the time, but let’s not kid ourselves that small/medium SUVs can be much more practical than most small/medium cars.

  8. As a person who has bought various Ford products over the last 35 years I can honestly say that they provided me with very fair value and reliability and if I am to be a bit sentimental they were part of the family and Australia.
    I personally know several family owned small tooling workshops here in Sydney who particularly in the past 6-7 years relied on small jobs from Ford (plus Holden,Toyota) to keep their CNC machines(each machine cost +250k) and the last of our locally born talented and skilled Australians with a job.
    I can now see how well the Free Trade Agreement with Thailand is going to be a one way street…mainly.
    Now if any wing nuts out there want to keep bashing Australian made cars….well my neighbour is a service manager for a BMW dealership and I can you there are lots of their customers who have not shared their “sheer driving pleasure” either.

    • Our cars evolved to suit our nation. They were ideal for transporting families over long distances on dodgy roads. In that regard they were outstanding cars.
      We then decided we could all live in an economic fairy land with the perimeter around Sydney and Melbourne.

      So the old style Falcon and Holden became more irrelevant. However we did not stop there. We ensured the death of our factories with five decades of a currency over-valued by about 40%!!!
      The fact that Holden and Falcon have survived under such a currency regime is, in part, a tribute to them.
      Subsidies and Protection played no small role in earlier years to the cost of other industries including manufacturing, farming and mining.

      • Mining BoganMEMBER

        I remember years ago reading an interview with a motoring industry bigwig who was asked what car he would buy purely on value for money. The interviewer was expecting something Euro and clever. Nope.

        Bigwig just said a second hand ford or holden. Tough, reliable and cheap to fix. His words. I remember because those words leapt out at me.

        Things die because we shift our attention to other things 🙁

      • I tell you what mate – when I came back from living OS for ten years about this time last year I had a yack with a mate and asked him exactly the same question, and got exactly the same answer.

        So I bought a 2 YO holden (he said it didnt matter if it was holden or ford) 6 cylinder with about 47K klm on the clock (dual fuel to make sure I dont get creamed by petrol price rises). Resale value will always be crap, but I am pretty sure I will be able to drive it into the ground for a long time to come.

      • darklydrawlMEMBER

        The other big advantage with owning a 2nd hand Falcon or Commodore (I would also add in some Toyotas here, Landcruiser and Corolla for starters) is the huge and easy availability of cheap parts.

        If you breakdown out the back of Port Augusta the local wreckers will almost certainly have the part you need and at a reasonable price too.

        If you are in your imported little number you might be waiting a few days whilst something is shipped to you at considerable expense.

        Perhaps less of an issue these days as most modern cars (even the cheap ones) are generally mechanically reliable now.

      • Second hand Holden and Falcon Wagons, with about 40 to 50k on the clock, are all we buy for the reps here for exactly the reasons you guys outline. I’ve been buying them for $16 to $18 K. Great value. We get rid of them at about 300k and have almost no problems.

      • drsmithyMEMBER

        Bigwig just said a second hand ford or holden. Tough, reliable and cheap to fix. His words. I remember because those words leapt out at me.
        The only evidence you need to drive this home is to look at what cars are taxis.

        Back when I was at Uni I used to drive cabs to make some money.

        The EB (might have been an ED – can’t remember for sure and Falcons aren’t really my thing) I was driving ticked over a million kilometres about a month after I started (I actually watched it happen).

        It then went on to do another 300,000 or so before a combination of an oil leak and faulty warning light led to a seized engine, which the owner used as an excuse to replace it.

        It’s a bit hazy now, but from what I remember the engine was original all the way through (dual fuel as well), but it was on its third transmission and about sixth starter motor.

        With all that said I wouldn’t buy one myself as I prefer my cars a bit smaller and sportier – but still pretty impressive.

      • Alex Heyworth

        Taxi drivers now seem to be turning to Camry/Aurion in Canberra. I have been in a very nice Passat diesel wagon in Brisbane (heated seats were great at 4.30 am). And I understand many of the taxis in Cairns are Prius.

    • cost +250K. Did they buy the machines from an unique distributor?

      Wabeco CNC milling machine CC-F1210 hs with nccad professional software

      -Australian distributor no GST AU$ 32,545 GST AU$ 35,799

      -Germany no VAT 8.530,00 EUR VAT 19% 10.150,70 EUR

      Figure out the ripoff! What do they do for the buyer to justify this price increase?

      The price goes up 3 times for everything here compared with the rest of the world!

      • Yes they borrowed and paid for these Japanese machines (Makino brand) about 20 years ago. They were one of the first Australian tooling companies to adopt 3D Cad Cam technology. It was a wise investment at the time, but since about 2004 it has been a struggle. In fact right now it is all being prepared for an auction off (Grays I think) in a months time.
        Actually one machine cost $450k in about 1997.

    • dumb_non_economist

      Don’t start me off. You only need to look at the warranty record that comes out yearly to see the bs about reliability etc for expensive european cars, it’s a crock of!

      • Yep, it’s more about image than reality. Many folks wouldn’t be seen dead in a Falcon or a Commodore, for no other reason than image. Interesting that a Camry isn’t seen the same way, I guess it is motor racing cultural cringe at work.

        I’ve only ever driven Falcons and Commodores, because they are cheap (total cost of ownership) and reliable. My VN Commodore was still going strong at 450000kms when I traded up to a 2nd hand VT. The VT still runs like a kitten with 300k on the clock. Keep the oil fresh in these cars and they go forever.

        Very sad about Ford, but it can’t go on as it is without sales.

      • rob barrattMEMBER

        True DNE
        I went skiing with a bunch of guys in Europe a while back. Some were connected with Mercedes, they got talking about what happened to reliability when Merc switched OEMs for their gearboxes. Audi also had problems at the time.

        Mind you, I owned a series of Lotuses. LOTUS stands for: Lots Of Trouble, Usually Serious…

      • The bloody university academia with their heads in their….well in the clouds…are really to blame for this damned mess.
        As near as i can tell that situation has just got worse since then.

      • That’s somewhat disingenuous.

        I’ll admit there is structural problems galore, and those structural issues amplified factors which impair the competitiveness of our manufacturing and agriculture sectors.

        But a services economy isn’t restricted to hairdressing and baristas, which you try to imply.

        Services just meaning delivering product which have negligble physical inputs.

        Being a tertiary educator is a service, and was (still is? prob not) our 3rd largest exporter.

        The design team and GMH, which had global sloon design given to them is a service industry.

        Engineering, and mining consulting are all services.

        The idea behind this is that product delivered through physical exertion, whislt back-breaking, is easy, and all contries that aspire to improve themselves will elect this path, because they can, instead of hi-tech services, because for the sole reason, they can’t.

        A perfect example is Gary nairn in Perth. he and his team designs and makes the prototypes for medium sized pleasure vessels in Perth, then manufactures flatpacks in Thailand to ship all over the world. Then he flies a crew of a few Aussie experts, but mostly Thai grunts, to put it together in places like The netherlands and Florida.

        His intellectual expertise, a service, is what we should be aspiring to do.

        Our educational, vocational and training systems would be best served offering every Australian such an opportunity, instead of tax cuts so you can leverage up more, and pay more for an investment property.

        But this is both hard, and requires vigilance to maintain qualitative leadership, and as long as a boomer can fleece a Gen Y or new immigrant to with high rents, then guess what opion will be taken.

      • RP As usual you start off with your personal insults towards me. Then you head off on your own tack here in order to try to display your self-awarded superiority and to argue whatever it is you want to argue.

        The whole service industry thing was, and still is, connected to the idea that the external account and CAD’s don’t matter. I’m aware that some service industry is directed towards the external account. I’m aware that some is directed towards servicing mining. (As an aside i’m also aware that a lot of it in the form of lawyers see their main role in as being to impede production while holding everything up in courts and enhancing their own wealth.)

        As you would have been fully aware my comments are not directed at service products that service real things. Nor was the stupid tripe that was being taught at Universities thinking about those issues. We were to have service industries just for the sake of having service industries. That certainly still appears to be the main tenet.

        Service industries are great provided they have something to service and they don’t seek to pay themselves many multiples of the salaries of those they are supposed to be servicing. The amount of ‘service industry’ you can have should depend on the industry you have to service. It should not depend on ever-growing Current Account Deficits and debt to maintain itself.

        The problem is that this country is now based on building more and more shops, coffee shops, restaurants, particularly in Sydney and Melbourne, to go with all the new apartments to house an increased population mainly supplied by migration.
        That’s what most people see as the source of growth. That’s what the likes of Malcolm Turnbull see as ‘growth’ and, reasonably, one expects he is not alone given the economic and social policies this nation pursues.
        Yes it increases GDP but only at the cost of increased foreign debt and sale of assets to foreign interests

      • drsmithyMEMBER

        Services just meaning delivering product which have negligble physical inputs.
        And the single biggest reason we need to focus on this is because within the next 50 years, robotics will have advanced to the point that the need for most human physical labour is negligible.

      • RP As usual you start off with your personal insults towards me.

        Well I do apologise, I don’t mean it to be an outright slur, and i don’t mean to offend.

        Then you head off on your own tack here in order to try to display your self-awarded superiority and to argue whatever it is you want to argue.

        My own tack? what I said was empirical.

        The whole service industry thing was, and still is, connected to the idea that the external account and CAD’s don’t matter.

        No it wasn’t.

        And if I can’label what is now above me as disingenuous, then how would you like it described? Particularly if you believe what you say
        The best I can think of then is ignorant, and that’s even more calluos than disingenuous.

        I’m aware that some service industry is directed towards the external account. I’m aware that some is directed towards servicing mining. (As an aside i’m also aware that a lot of it in the form of lawyers see their main role in as being to impede production while holding everything up in courts and enhancing their own wealth.)

        So then your argument should be against incentive astructures, not service industries.

        As you would have been fully aware my comments are not directed at service products that service real things. Nor was the stupid tripe that was being taught at Universities thinking about those issues. We were to have service industries just for the sake of having service industries. That certainly still appears to be the main tenet.

        Then articulate it better.

        We can have an economy of 100% accountants, fund managers, teachers, design engineers.. all service industries, and stil be running a current account surplus.

        At the moment you’re rants appear that there is a noble virtue in toiling on soil, and our efforts to move away from it are at fault.

        A high income will never be derived from agriculture.

        Service industries are great provided they have something to service and they don’t seek to pay themselves many multiples of the salaries of those they are supposed to be servicing.

        Yes, export the services, correct.

        But that is an incentive structure, not compositon of service vs manufacturing/agriculture.

        The amount of ‘service industry’ you can have should depend on the industry you have to service.

        We don’t have to service ‘our’ industry. There is an entire planet of industry to service. No limit exists for us.

        It should not depend on ever-growing Current Account Deficits and debt to maintain itself.

        That issue does not arise out of a disproportionately large service sector, if one exists.

        Singapore doesn’t have much agriculture or mining, Argentina 100 years ago didn’t have much of a service industry but had CAD issues.

        Your rants about ‘too much services jobs’, which infers repealing them in favour of more argiculture and mining are by default your methodoogy of fixing things, and that is what I rally against.

        Your information is.. well i can’t use that word.

        The problem is that this country is now based on building more and more shops, coffee shops, restaurants, particularly in Sydney and Melbourne, to go with all the new apartments to house an increased population mainly supplied by migration.

        yes, because there are too many incentives given to developers, and too few given to people who wants low barriers to entry, such as low cost land.

        Regional Australia hasn’t helped itself when it prices land more than $5,000 an hectare even in large regional cities.

        Look at places like Margaret River and Byron Bay and the cost of their land, they’re equally as guilty of the sins of Sydney and Melbourne

        That’s what most people see as the source of growth. That’s what the likes of Malcolm Turnbull see as ‘growth’ and, reasonably, one expects he is not alone given the economic and social policies this nation pursues.

        Then they’re idiots, and I don’t view that as growth, and we have idiots at the helm. But the crime of idiocy is not something the economics profession hould have to answer for in regards to service industries.

        Yes it increases GDP but only at the cost of increased foreign debt and sale of assets to foreign interests

        As i said, we can all be committed to providing services, and they can be sold to foreigners. The economics profession would probably agree with that premise.

        If we’re not, and we’re directing uor resources and energy towards appeasing the bottom feeders of society such as mortgage brokers and property developers as the alternative, then as I said, the issue is behaviuoral through our incentives and our views on wealth, not the composition of our service sector, or what value it brings.

      • All I can say to you is that you don’t read what’s said. You just read what you want to read, interpret it the way you want, so you can pretend you’ve some sort of superior knowledge.

        I think you need to look up the meaning of disingenuous. If someone calls me disingenuous in real life they better be prepared to go the distance! I don’t accept apologies for that sort of statement about me.

      • P.S. Re the economics profession.

        Nobody anywhere was talking about problems in the external account and associated policy before I started with it. I remember you from Keen days.

        There is not one university academic been warning of problems in the external account. They all believe, as does your favourite Professor, that neither CAD’s nor Foreign debt matter.
        It was the theme at Universities in 1970. i’ve seen no evidence from any major economist nor any academic that any of them gave the external account a second thought. The economics profession as a whole has been part of this process.
        The standard answer I got from any of them Westpac, RBA, and I’ve listened to most of the rest, is that ‘but Australia is a Current Account Deficit country’

        What sort of a bloody economic argument is that. Please point me to any concerted persistent advocate of attention to the Current Account and the dangers thereto from any Australian academic of any standing?

        Just so it is clear for you. the type of out of balance service sector that we have is the result of policy! How the hell else would it arise for goodness sake?
        You can call it ‘incentive’ if you like. I actually don’t care what it’s called nor am I going to presume everyone here is so dumb they can’t get from A to C while assuming B was included. You either prefer not to understand that or can’t. take your pick.

        Frankly, to me, it is just myopic short-sighted ignorant policy to sell your country off just so you can have more apartments and restaurants! Economics professors may disagree. That’s fine! They’ve only ever hung around the rarefied air of universities.

      • Flawse
        I enjoy your curmudgeonly tirades against the CAD, service sector, lawyers, public servants, unions, lefties, urban dwellers, public servants, latte drinkers, university lecturers, lawyers, et al, as much as the next guy.

        But RP has clearly read what you have said, evidenced by his methodical and logical responses to every one of your points.

    • Spot on, I commented above, before I got down to here: The crucial thing is: where are the “primary” sources of national-economy income and the “tradables” going to be. If you are going to have a services-based economy, you need to be providing a heck of a lot of those services to offshore clients, to make it a viable basis of an economy.

      London and the UK are near unique in this. Good luck trying to match it. And the UK economy is ending up stuffed anyway due to its policies wrecking every other “tradables” part of the economy BUT heavily-urban-based “services”.

  9. I wonder what Glen did when he woke up this morning?
    I guess he got up, peed in his imported toilet bowl; went out and made a cup of imported coffee in his flash imported coffee machine and poured it into his imported china cup; walked out on to his deck and admired all the imported boats in the Harbour; and thought
    ‘What a wonderful country I’ve helped create!’

    • Well, Capt’ Glen can always claim that during his time he helped Aussie exports (*) with his polymer note printing subsidiary

      (*) – achieved by bribing various central bankers in tinpot banana republics.

    • Thanks Flawse I enjoyed that,cheers.
      You know,many a time when I see on TV these suited up with pristine shirts and flash ties type politicians and they are spruiking their s–t about how good they are for us and the country, I say to myself…
      Wonder where your shirt and tie and undies were made, even your suits and shoes….I bet that apart from some Italien made suits most of the clobber they are wearing was made in Asia.

    • Nice one flawse.

      Last month (before the AUD drop) I scored a pristine old Harley in California. Seller a great bloke with young family, needing cash to build a home.

      They’re rural folk (like me), love nature, so I wanted to send each family member a modest Australiana gift in thanks. Do you think I could find anything in a major retail shopping centre that’s actually made in Australia?

      Really takes some of the shine out of the act of giving something from Down Under, when the lovely fine bone china cup for his missus, beautifully decorated with a Laughing Jackass by a renowned Australian artist, has “Made in China” on the bottom.

    • Yeah but as Glenn told us, a tonne of iron ore buys a lot more plasma tellys these days!

    • The tearing down of protection would have been the right thing to do. The policy of running a currency 40% over-valued was not!

      • Reducing tariffs was the right thing to do but whether reducing to 5% was too much or not is open to debate.

        The article is from 2007 and the issues are still the same.

      • Reducing tariffs unilaterally has resulted in this – Thailand, the likely destination for Ford’s Australian manufacturing, has stupendously high tariffs on imported cars even with our Free Trade Agreement.

  10. I think the number of job losses is under estimated. Factor in the subbies and smaller business that will fall with the loss of a couple of thousand jobs.

    Personally I dislike the Ford product and to some degree the type of people who drive them. Their latest attempt at the tradie 4×4 is poor and traction control as well as cruise control is glitchy

  11. It was inevitable.

    Australia has no business making cars in the modern global economy.

    All those billions in car industry assistance were pissed away (for votes of course).

    • Jonesie

      I’m wearing my angry hat! 🙂 Screw (politely put) the global economy.
      Sure maybe we should not be making cars. However that is a commercial decision that should have been made with a dollar value about 40% less than it has been.
      It’s not possible to make proper commercial decisions under the current regime.

      • Back in the early 2000s when the AUD was low, Holden exported more Commodores than it sold locally. IMO flawse is spot on; it’s the currency at work with a healthy dash of anti-bogan cultural cringe to make the subsequently cheaper imports attractive.

    • C.M.BurnsMEMBER

      long-term geopolitics and economic “rationality” are not good bedfellows.

      in G-P terms a nation doesn’t keep heavy manufacturing for the good times and to be economically viable. It keeps it for the bad times (read war). This goes double (triple?) for a nation like Australia that is so geographically isolated from many of our strongest/longest allies.

  12. My dearest Flawse, got to agree with in principle here. But fear not laddie.

    This is the arse about country. We’ve all heard about creative destruction. This is about destructive creation.

    Lately in Iceland, with a complete shellacking of currency/purchasing power value their tomato growing in green houses is viable for consumption as imports are prohibitive.

    Who the smartarses destroy to reinvent the wheel is of no consideration to the overlords of international finance and international global conglomerates. A slice of the action, any slice, tending towards risk free, is the name of the game.

    BTW colonial manufacturing whether under the name of collaboration or otherwise was and is never the answer in the long run. WTO =WTF.