Shall we jettison the car industry?

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At the AFR, Bill Carmichael thinks so:

We have learned what “a stronger economy” means from the reforms of the 1980s and 1990s, which contributed substantially to the prosperity we have since enjoyed. Those reforms strengthened the economy not by enabling us to do the same things better (i.e. through improved productive efficiency), but because we moved from things we did less well to those we do better (i.e. by improved allocative efficiency). 

The second policy message from that experience is that the strength of the economy depends on the response of individual enterprises as impediments to competition are removed.

But not the conclusion:

In this policy environment it is not surprising that car companies are queuing up for more handouts and demanding special treatment on the grounds that they create unique “external” benefits for activities elsewhere in the economy, that other governments protect their own car manufacturers and that employment in Australian manufacturing depends on the multiplier effect generated by car production and that without it the rest of the manufacturing sector would collapse. These are familiar arguments, without substance. The claim that it produces unique benefits throughout the economy (and that the rest of manufacturing would collapse without it) has been discredited by Bill Scales, who chaired Senator Button’s Automotive Industry Authority during the 1980s.

It is widely accepted that vehicle manufacturing employs 50k people directly and 200k indirectly (I can’t confirm it). Across the country manufacturing only employs 920k people now. In terms of the intellectual property and skills for a sustainable manufacturing sector, letting the sector would, therefore, be an enormous blow.

Australian manufacturing’s value added contribution to output is down now to about 7%, the lowest in the OECD tied with Luxembourg. While the theories of productivity enhancement are all sound, letting cars go would be a grand experiment in post-industrial economics. Given manufacturing is the single most important sector in generating productivity gains, one has ask if the national economy wouldn’t suddenly be confronting peak efficiency. I am aware, of course, that subsiding the car industry may not help this either!

The Australian has more:

INDUSTRY Minister Ian Macfarlane admits there is a chance Australian car manufacturing cannot be saved amid divisions within cabinet over whether to put extra taxpayers’ money into the beleaguered industry.

Mr Macfarlane said it was possible Holden would decide to shut down its manufacturing operations in Australia, and this in turn would jeopardise Toyota’s presence.

“There is a possibility,” he said. “There’s a possibility that the industry is not able to be saved in terms of the level of support it might require.”

…”There’s a diversity of views,” Mr Macfarlane said. “We need a process, we need to have the arguments, and I need to show my colleagues exactly who does what in this space all around the world.

“What we have got to do is have a sound, robust process, which I will use to convince those in our cabinet that aren’t supporters of another car plan (that) we should put in place another car plan.”

Opposition industry spokesman Kim Carr said the government was “playing chicken” with international car companies and risking the livelihoods of 200,000 Australians who depended on the automotive industry.

He said there was not a car on the road that had been made without government assistance.

“We know that, comparatively, Australia’s support for carmaking is far less generous than internationally,” Senator Carr said. “In Australia, the cost per capita of government support is around $17 – much lower than the $90 per person in Germany or the $264 per person in the US.”

Carr has a point and the Productivity Commission Report will be a useful yardstick. Though Macfarlane’s game of good cop, bad cop is good business practice when in negotiations, whether successful or not.

The Australian has another piece too, from Bill Scales who argues that the Productivity Commission Report into these matters is flawed because it:

does not ask the commission to examine whether there are economy-wide benefits from providing high levels of ongoing support for this particular industry…what is the point of subsidising one industry if it’s at the detriment of all other industries in our country?…it will be sending a clear message that high-profile lobbying pays and that their next CEO might best be not an engineer or a marketer but a lobbyist…But if it decides that the success of any company in Australia in the 21st century is best determined by it being internationally efficient, operating within efficient labour markets in a competitive environment, using higher-quality national infrastructure, then Australia has a very bright future indeed.

Again, in principle I agree. But like all other tradables right now, it troubles me that our elites argue for making long run decisions about industrial structure when our competitiveness is being smashed by a grossly inflated currency that has not been addressed in the least. Local car industry output has been crushed by the high dollar:

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As export dollars per month have tumbled (millions per month)

ABS-5368.0-InternationalTradeInGoodsServicesAustralia-MerchandiseExportsBroadEconomicCategoryFobValue-PassengerMotorCarsExclPartsAccessories-A1829275A.svg

Yet the dollar is not the result of market forces but trade wars.

I don’t have any answers on this issue. Only questions. And that makes me very uncomfortable when someone puts a simplistic argument about the triumph of efficiency. Australia needs a comprehensive plan to restore its competitiveness across the board. Then, perhaps, it would make sense to let market forces have their way in the car sector.

Comments

  1. Look like the gov will waste more in interest to “capitalise” the RBA than supporting a strategic sector of the economy.

  2. mine-otour in a china shop

    If we want it to continue we have to pay for it – most people want something for nothing.

    In a high cost of business country though it is like burning money on he BBQ. Perhaps we should address the other costs issues first – high labour costs (because of high house prices), high energy costs, high raw material costs, high insurance costs, the list goes on and on. Perhaps if we tackle costs seriosuly the money spent will be less?

    Poor old Luxembourg at the bottom – using it as an international comparison is difficult though, given all the financial services companies “based there” swelling services “activity” in a small open econmomy via accountancy transfers…

  3. The Spin
    Protecting the local car industry has positive flow on effects for the rest of the manufacturing sector and benefits us all.

    The Reality
    Continuing to waste billions of scarce public funds in subsidies and concessions gifted to inefficient foreign-owned car makers, grossly misallocates investment, encourages rent-seeking oxygen-thieving lobbyists, penalises efficient manufacturers and ultimately costs us all.

  4. HnH I agree with your point re trashing manufacturing without first addressing $Aus & other pressures, this must be addressed & pretty urgently I think. But if we also are going to continue to prop up the industry we must make sure our “co-investment” is well spent. We have been propping up the industry for a very long time & this has occurred during times of low $Aus & the industry still came back for more. GMH also reminds me of Mitsubishi/Chrysler that kept getting more & more concessions & promised all sorts of things, but in the end it went anyway. One gets the same vibe from GMH. Will they’ll go anyway? Then what?

    • Sool The A$ has been overvalued for 50 years.
      I agree that if we are subsidising the car industry based on 50 years of an overvalued dollar why haven’t we been subsidising other manufacturers and farmers? Why just pick one?

  5. It needs to go !! In 20 years time we will still be debating this issue when we could have niche, advanced technology manufacturing in place still utilising Australian steel mills. The car industry would have been phased out over those 20 years (preferably 10) while innovation growth in manufacturing is fully supported by gov’t.
    Our govt’s are so short term it’s embarrassing. Think Tasmanian logging – still there, although crumbling, with no strategic changeover to other industry. I recall years ago the Tas gov’t went to Ireland to look at a model for change – they were “stumped” and of course shrugged and continued a dead industry. Should have gone to Israel or Scandinavia.

    • “advanced technology manufacturing ”

      This is the old baloney furphy trotted out to cover all and any argument about production or productivity. We aren’t doing it and the rest of the world are now so far in front of us that it’s not possible.

      • I still believe it could be possible to have advanced manufacturing in Australia BUT we’d first need some consensus on why we need any manufacturing at all.

        Pollies aren’t generally good pickers because they’re too focused on pleasing an existing constituent to ever place a significant bet on something that does not yet exist in Australia. A few months back I spoke with several influential Pollies in rural areas about supporting new business development through things like tax breaks and land grants, they were generally receptive BUT always had two questions
        1) How many Jobs?
        2) How many jobs for their local unemployed?

        For any advanced manufacturing the honest answers are: 1) very few total job and 2) None directly for your pathetically under-skilled unemployed (real big problem in regional Australia)

        That’s about as far as my discussions ever got, once those questions were out you could see the interest just evaporating before your eyes.

    • In 20 years time we will still be debating this issue when we could have niche, advanced technology manufacturing in place still utilising Australian steel mills.

      Hah! With the trend lines the way they are, even our innovative manufacturers (Cochlear, Codan, Resmed, etc.) will have completely offshore’d their production. The business conditions are simply not conducive to value added manufacturing here – they will have to change dramatically if we want to try and get back into the global market for manufactured goods.

      High land prices make it impossible to build a factory or production space anywhere near a port or freight centre, and piss-poor freight infrastructure means it costs shitloads to move your inputs/outputs anywhere.

      The engineering sector as it currently stands is mostly middle-management bloat with little incentive to invest in technical development.

      • High land prices make it impossible to build a factory or production space anywhere near a port or freight centre, and piss-poor freight infrastructure means it costs shitloads to move your inputs/outputs anywhere.

        To be honest though, this is their fault.

        Their main lobbying concern should be fighting this. BCA would represent their concerns yeah?

        Instead, the BCA is focused on reducing an already generational low wage share, having workers screwed even more, all for a hope of a 1% cut in the coporate tax rate and an underpinning of more robust credit ratings.

      • It wouldn’t be BCA – they’re stacked to the gills with FIRE interests, no you’d be looking at AIG to lay the blame.

        I do recall a bit of bleating from them during the Howard era about infrastructure, but they seem to be totally ineffective or maybe just incompetent in the face of the seasoned veterans of rent seeking.

  6. but because we moved from things we did less well to those we do better (i.e. by improved allocative efficiency).

    Oh!! Mercy! Mercy! Spare me please!!!

    Since when has propping up the funds management industry with a compulsory 9.5% (rising to 12%) levy on all wage and salary earners been “allocatively efficient”. All it has done is push $1.6 trillion into supposed “savings” (much of which the “savers” will never see again) so that the wealthiest people in Australia can extract an average 1% pa management fee on it.

    And since when has tax farming and the sale of private monopolies to raise cash for government spending been “allocatively efficient”? All it does is line the pockets of those same wealthy – and politically powerful – people.

    Australia enjoys no comparative advantage in finance, and it never will. The arguments one hears from the Sydney spruikers about “competing in the international finance markets” are no different from those which one heard from the Melbourne spruikers sixty years ago about developing a strong manufacturing economy.

    Australia is a rent-seeking society.

    All that has changed is that Melbourne rent-seeking collapsed under the weight of its own inefficiency, and the Sydney rent-seekers (a rather more ruthless bunch) have moved in to fill the niche formerly occupied by them.

    There is one thing that has remained unaltered in the switch from Melbourne rent-seeking to Sydney rent-seeking.

    In order for domestic industry protection to translate into actual cash in the hands of the rent-seekers, they need an ever-growing domestic market. (They can’t sell anything overseas because they’re utterly hopeless.) And to have an ever-growing domestic market you need high levels of immigration.

    That’s what really pushed the post-war immigration boom.

    And it’s what’s about to push the new immigration boom.

    • Absoloodle!

      “You need high levels of immigration” Please add ‘and increasing to infinite amounts of foreign debt and asset sales!’

    • Oh, I don’t know….Territory’s to Thailand 50% tariff , accords to here for nothing… All these industries are subsidised wherever you go. Mercantilism ….a wonderful thing. The Chinese do it well.

      • It is not the Thai’s fault that Ford could not build a product using it’s own 2 litre DuraTorq diesel engines which would not have been impacted by such a high tariff.

        Let alone the blind stupidity of building anything SUV related with a 4.0 litre petrol engine for export into anywhere other than the US.

      • You can’t blame Ford for the tariff… That was government ineptitude in the free trade agreement. Its not just the dollar.You can always buy a cruze

      • To repeat myself, Ford had a choice of several engine options for the Territory. They were the ones who chose the 2.7 litre size of the Diesel powerplant and 4.0 litre size of the petrol one.

        They could have produced a product with 2 litre petrol and diesel motors, significantly reducing the Thai luxury tax levied on the product.

        Ford produced a product which was not competitive in the target market. The engine capacity based luxury tax applies to all imported vehicles.

        I am reliably informed that motorbikes and dual/crew cab pickups with engines under 3.3l in size have negligible Thai excise taxes.

        Highly desirable positional goods such as foreign SUVs are taxed heavily by the Thais for social equality reasons.

      • Before the Thai Free trade agreement, Australia sold more goods to Thailand, after it is now 3 to 1 in the Thais’ favour.

    • +1000 the things I hear from family who work in the super industry literally turn my stomach. It must be nice to work in an industry where people are forced to pay you.

      And the extreme salivation from the industry at the proposed % increase to super, you’d swear that it wasn’t really going to end up as all your money somehow…

  7. I got no problem with dropping subsidies.

    We need to get away from the old fashioned idea that certain industries are in some way “special”.

    The car industry here has had decades to get their ducks in a row. The obvious conclusion is that its one of those products that we have no business making ourselves.

    In any case, the trend is towards cars (electric or hybrid) becoming commoditized products, the same way laptops and cell phones have become. I’m almost certain that a couple of decades from now, most people will be able to buy a new car on Amazon for a couple of thousand dollars. Not exactly the high margin industry of the future we should be targeting.

    And pleeez dont use the “strategic skills” argument. That has been argued on this forum before and proven to be nonsense.

    • I got no problem with dropping subsidies.

      Great, they can start with the big ones first – negative gearing and the CGT discount.

  8. How many of those foreign countries subsidies shithouse car makers who can’t turn a profit or make a decent product.

    I’d be quite happy to subsidise companies like BMW, Audi, Volkswagen etc. who are making cars that people want to buy, selling their products globally and turning a profit doing it.

    Holden and Ford? Not so much.

  9. Is Australia on the edge of what is coming to all countries – Protectionism? Slap massive tariffs on imported cars and any other thing that is needed by the domestic economy, and let them be made locally. Jobs will flourish as import replacement abounds. The dollars will fall as exports evaporate in the face of tit-for-tat measures imposed, encouraging even more local manufacturing. But do reprisals matter to Australia? Can’t it do well without everyone else? I reckon it can. The global system needs the fabled reset; Back to the Future, and let’s have another go down a different road this time. (Not that any of that will happen! It’s just a horizonless future of House and Holes that you have to look forwards to – very few owned by Australians)

    • Janet,

      I can’t see Australia turning the clock back to our protectionist past. Its inconceivable. And a reset of globalisation would be much, much worse for all people of the world as compared to continuing trying to muddle through the worlds current problems.

  10. Neville Gearless

    I dont agree with making our market more “Free” than our trading partners’. As with agriculture, the Europeans and Americans subsidise more and have higher tariffs than Aus. But manufacturing is the difference between a modern society and the dark ages.

    I understand the concept of comparative advantage, which in our case is mining. But its a volatile industry and can go kaput in no time.

    • “But its a volatile industry and can go kaput in no time.”

      And manufacturing is not?
      The problem with selling mouse traps is that as soon as somebody builds a better one you are out of business.

      You might like to talk to the Finns about that country’s experience with manufacturing “champions”.
      Know anybody who has bought a Nokia phone recently?
      Didn’t think so.

      • Exactly proves my point.

        From Wikipedia:

        “Nokia was the world’s largest vendor of mobile phones from 1998 to 2012.[6] However, over the past five years its market share declined as a result of the growing use of touchscreen smartphones from other vendors—principally the iPhone, by Apple, and devices running on Android, an operating system created by Google.

        The corporation’s share price fell from a high of US$40 in late 2007 to under US$2 in mid-2012.[10][11] In a bid to recover, Nokia announced a strategic partnership with Microsoft in February 2011, leading to the replacement of Symbian with Microsoft’s Windows Phone operating system in all Nokia smartphones.[12]

        Following the replacement of the Symbian system, Nokia’s smartphone sales figures, which had previously increased, collapsed dramatically.[13] From the beginning of 2011 until 2013, Nokia fell from its position as the world’s largest smartphone vendor to assume the status of tenth largest.[14]”

      • What are you getting at here? Are you saying that Finland would have been better off to never have had Nokia on their shores?

        Should Finland be focusing on becoming a ‘financial innovation hub’ like Australia seems to be doing?

        If everyone is trying to be a ‘financial innovation hub’ who the hell is going to actually do all the real work?

      • Nokia worked for Finland… until it didn’t anymore.
        And one can imagine how much rent seeking support the company arm twisted from their government on the way down the gurgler.

        That’s the trouble with the “national champion” approach.
        It favors rent seeking over smart decision making.
        It favors sticking to the status quo when going back to the drawing board is the better choice.

        “who the hell is going to actually do all the real work”

        – sounds like you think “real work” only involves making things that go “clunk” when you hit them with a hammer.

        That’s so 20th century. Personally I would rather have the next Facebook or pharmaceutical giant on our shores. NOT pour money down the drain on products that Henry Ford was making almost a century ago.

      • Err sorry to break it to you but Nokia was no more a manufacturing concern in Finland than Apple is a manufacturing concern in the US.

        The VAST majority of the manufacturing of components and the phones themselves were done in Taiwanese and Chinese facilities.

        In fact Nokia is the perfect example of how fickle high tech investment and jobs can be. Probably the only better example is the thrashing German solar panel makers have received at the hands of the Chinese.

  11. “Again, in principle I agree. But like all other tradables right now, it troubles me that our elites argue for making long run decisions about industrial structure when our competitiveness is being smashed by a grossly inflated currency that has not been addressed in the least. Local car industry output has been crushed by the high dollar:”
    That is absolutely spot on!!!! Pity the ignoramuses in Treasury, RBA and Govt don’t get this verry simple rational statement. What’s so hard fellows?

    • Australia hit its peak motor vehicle production in 1974.

      Indeed it did . . . just 18 months after the historic shift in political power away from the Melbourne-dominated Liberal regime and into the hands of Sydney’s Gough Whitlam. One of his first acts as Prime Minister was to slash tariffs on manufactures.

      Now even the Liberal Party is dominated by Sydney interests.

      Australia is still a rent-seeking society.

      The rent-seeking has simply moved from Melbourne to Sydney.

  12. Hehe…

    We have learned what “a stronger economy” means from the reforms of the 1980s and 1990s,

    I would suggest that as we have made no leeway into the CAD, that we haven't learned a thing.

    It would be passable that if during these reforms we built up some solid industries, and the CAD meant we sold these off.

    But we haven't, the resulting CAD has meant the sell-off of naturally endowed real assets.

    Dumb luck masks the real story off 'what we have learned'.

  13. For national security reason, Australia needs a manufacturing industry, but the current subsidy is not delivering the industry Australia needs.

    Australia is the largest island in the world. As long as the US controls the sea lane, we are safe from invasion. However, if the shipping lanes is disrupted (e.g. Indonesia collapses, China invades Taiwan, East Timor becomes like Somalia, etc), Australia will not be able to import or export. That is why we need to maintain a minimal manufacturing capacity. Otherwise, Australia will collapse on itself once we’re isolated.

    Right now, the car industry in Australia exists due to ‘political ransom’ in SA. Maintaining a manufacturing base is necessary, however the cars we’re making is not suited for the purpose of national security. Work backwards : think of the type of car Australia needs if we’re isolated, and then subsidize a manufacturing industry to create it. The car need the following criteria:

    * Does not require imported part.
    * Can run on various mixtures of petrol and ethanol.
    * Easy to maintain, even by the unskilled.
    * Can survive the harsh Australian outback

    Instead of a high tech car with the latest ‘bells and whistles’, it should be back to the basics, and cheap to run. An example to consider is the ‘Postie Bike’ : the motorcycle that the Australian post office uses for mail delivery. It’s not fancy, but it’s is very reliable and very easy to maintain and fix. A friend of mine bought one second handed, and then used it to ride from the east coast to the west coast of Australia with no issues!! What Australia needs is a car version of the ‘Postie Bike’.

    After establishing the requirements, then it’s just a matter of putting it out to tender. Australia does not have a large enough market for economy of scale, so it should be a niche market small enough to be fully supported by government purchases. While you won’t make much money selling a reliable, low priced car, the main purpose will be national security. Making a profit will be a bonus.

    • “if the shipping lanes is disrupted (e.g. Indonesia collapses, China invades Taiwan, East Timor becomes like Somalia, etc), Australia will not be able to import or export.”

      Nonsense.
      Find me one credible military expert who agrees with that.

      There is not a single nation that even comes close to representing a “blockade” treat to Australia.
      In any case, modern wars are not fought that way.
      Military assets are so expensive to deploy that the cost of any country imposing a blockade on Australia would EXCEED the cost to us of disrupted trade.

      • Ronin8317MEMBER

        Australia’s sea lane were cut off during WW2.

        Stratfor wrote about this in an article on Australian security in 2012.

        http://www.stratfor.com/weekly/australias-strategy

        You don’t need a blockade to disrupt the sea lane. The breakdown of a country followed by Somalia-like pirate activities can do it, or a regional war that doesn’t affect Australia. While modern wars are not fought in the same way, the essence of warfare has not changed much since the day Sun Tzu wrote ‘The Art of War’.

      • I don’t know if I’m credible, but I’ll try.

        Trend: Commoditization of military technology.

        Weapons and their platforms are smaller, lighter, have increased lethality, and are increasingly cheap to manufacture. Where once a piece of technology that could destroy a tank would have to be another enemy tank of equivalent technology, size and value, it can now be achieved by a human portable solution at a fraction of the cost (contemporary examples of commoditisation could be Javelin, missile systems designed to destroy airmobile platforms, or tactical drones).

        The removal of the organic human controller (the rise of drone use) has eliminated the need for integrated life support systems reducing again the size and capital expenditure for lethal weapon systems. Drones that have become ubiquitous in the air will soon move into the sea, and large capital intensive force projection platforms, (aircraft carriers, submarines, manned jets and bombers) will become the anachronistic battleships of our time (Land invasion platforms exempt).

        (As an aside, the questions raised here on the Australian car manufacturing industry can be asked about our domestic submarine manufacturing industry.)

        Now Imagine:

        Imagine that there is a country in our region that is excellent at manufacturing. It can produce millions of cheap little gadgets with a mixture of stolen and in house technology. This country is aggressively expanding its regional influence, including a submarine strategy designed to retain control of regional waterways. Its recent growth has created systemic economic imbalances that need to be addressed, and the long historical precedent for elites using external issues to focus attention away from these imbalances means that nationalism is on the rise.

        Imagine a networked cloud of cheap sub subsurface, surface, and airborne drones with just enough weapon systems to cripple/destroy a civilian bulk freighter, and a rate of manufacture that is faster than our ability to produce/procure large expensive old school solutions that can’t cover the massive areas required. While the area covered by one drone platform isn’t much, since this country is producing thousands at the cost of an Ipad, they don’t really care. Loiter time is great because there isn’t a person to keep alive inside and they are run on whatever power source is locally available.

        Imagine Australia, where the vast bulk of imported goods come by sea in slow moving massive sea freight; freight that you can’t reduce in size because a banana has reached the limit of technological size reduction; freight that you can see from space and plan for weeks in advance. Also imagine international shipping companies that would suddenly find bulk freighters travelling through SE Asia uninsurable, a decade long investment at risk of destruction from an $800 dollar piece of equipment on a 6 month refresh cycle. Shipping slows to a trickle and Australian domestic manufacturing, in terminal decline since 1985, is unable to effectively replicate a counter to the blockade.

        So yes, I have concerns.

    • Ronin,

      Ref your point on a Somali pirate style situation eventuating here. Don’t believe it would be a significant threat to shipping. Ex military/civilian contractors are now being used around Somalia. The low tech of pirates and the vulnerability of small boats on the ocean to high powered rifles on stable platforms means that it’s pretty cost effective for large freight companies to hire a few contractors to provide security.

  14. Some rambling thoughts…….
    Over the years I’ve been led to believe that most industries are subsidised to some degree or another. To my eyes the more essential the industry the more they’re being whiteanted by other rentseekers. Unfortunately essential for a robust diversified economy, & profitability are 2 different things.

    Subsidies…… Car industry $2.5B? over 10years. NG $5b? PA. Mining $30B PA?. FIRE – considering it’s many tentacles, maybe hundreds of billions? Or maybe Trillions PA???

    So why is this an issue considering the small amount of subsidy compared to other ‘ailing industries’? Maybe so the spotlight isn’t shone on the massive shortcomings of others who are more effective at rentseeking while producing nothing? Boot the low hanging underrepresented fruit?

    If there is a shift away from aiding carmakers, then I would expect a subsequent tarrif drop on imported cars & grey imports ala NZ.

    When the time comes where you can’t get your boat trailer fixed, or anything made/modified from your local engineering shop – because the skills don’t exist anymore – who are you going to call? A lot of these people are already refugees from defence, or car related industries, they’re getting older & can’t afford to put many/any apprentices on!

    And lets face it if a kid looks at apprentice wages Vs almost anything elso out there, they’d probably be better off working at Macca’s. The manufacturing trades don’t have a financial payoff later on like the building trades do.

    • Hit the nail 100%. We are not a laissez faire economy, there will always be Government interference in the economy through subsidies.

      The question should not be ‘shall we jettison the car industry?’ it should really be ‘shall we maintain a balanced economy?’ Because right now, the regulatory capture of certain industries far outweighs the rest of the economy, and we risk jettisoning our diversification which helps to keep the economy stable.

  15. For Australia to get maximum benefit from the car industry we need to have people move into the car industry. Get the skills and expertise. Then move on from the car industry to other industries in Australia so those industries can benefit from the skills and technology brought to Australia by the car industry. The car industry is a manufacturing technology leader.

    • Automotive people are great at making automobiles. In my experience, when they move to businesses making things that aren’t cars it can them a long time to adapt, massively reducing the benefits of their experience. It can work really well, but I have seen productive factories grind to a halt because a non-assembly plant was flooded with automotive people who tried to apply assembly plant principles.
      Automotive people seem to find it difficult to adapt to new environments, so the potential for knowledge transfer is actually quite low.

      • notsofastMEMBER

        Statsailor,

        Ok, but the long arm of automation and robotics is reaching further than it ever has before and before this decade is out that reach will be much, much further. I suggest many businesses if they want to survive the next decade they, along with their banks and with Superannuation Funds to provide the necessary funds, will need to make decisions which involve some risk to take this opportunity or potentially fall by the wayside. Having people with the right technical skill set will be critical to the success of this strategy. And its not just about assembly line employees, it is also about technicians, engineers, computer programmers, accountants, project managers etc, etc.

  16. Jumping jack flash

    Let it burn

    They lost their way at about the same time they decided to step into financial services.

    Hardly surprising, even supermarkets did the same thing. More proof that we are all banks now.

    New and agile companies will rise from the ashes of our failed car industry. We may not make cars. Perhaps we’ll make lawnmowers so everyone can mow each others’ lawns to prosperity.

    Market forces will, and should, prevail.

    • Neville Gearless

      “Market forces will, and should, prevail.”
      This is not about market forces, this is about letting other countries’ subsidised cars sell here wiping out our far less subsidised car industry.
      Aussies are punch drunk with euro & yank 300D’s right now, it wouldn’t really be a loss of “living standard” if we were forced (through pricing – like 20 years ago) to drive aussie made.
      I don’t buy Stephen Morris’s line either (though I enjoy his posts), what makes foreign rent seeker car makers any more deserving than our own (rent seeker Holdens and Toyotas)?