T’was the Lunatic RBA that killed Holden

Scotty from Marketing is having us on again, as he can in Australia’s memory-free corporate propaganda soup (that is, the media):

Scott Morrison has accused General Motors of allowing the iconic Holden brand to “wither and die” after demanding billions of dollars in taxpayer subsidies to remain in Australia.

US-based GM announced on Monday it was retiring the Holden brand from sales in Australia and New Zealand.

The announcement came just six years after former treasurer Joe Hockey was accused of chasing the manufacturer out of the country after he urged the company to “put up or pack up” in December 2013 and “come clean” about whether it planned to shut down local operations.

The company had already ceased local manufacturing in 2017, but the decision will still affect 800 employees in Australia and New Zealand.

The Prime Minister said he was “angry” about the decision and said many Australians shared his view.

“Australian taxpayers put millions into this multinational company,” Mr Morrison said.

“They let the brand just wither away on their watch.

“Now they are leaving it behind.

“I think that’s very disappointing, that, over many years, more than $2 billion was directly provided to General Motors for the Holden operations.

“I think the fact they took money from Australian taxpayers for all those years just to let the Holden brand wither on their watch, I think is disappointing.

“I think at the end of the day it shows throwing all that taxpayer money at them … they were never going to respect that.”

Save the crocodile tears. The Coalition refused the $500m subsidy to Ford that sealed the fate of the entire car industry in 2013.

Holden is not even relevant. What is is that the Coalition Government booted out the entire car industry. 

But not even it is most to blame. That honour goes to the Reserve Bank of Australia. At the millennium, when Australia still cared about such things as economic diversity, the car industry was a $6bn export powerhouse:

Alas, after that, the central bank only ever wanted a higher currency to combat its runaway debt and inflation bubble.

This absurdity reached its zenith in 2010/12 as the RBA argued that we needed the high currency to “make room” for “mining led growth”. And it did make room, way too much of it:

Just as Ford pulled the sump plug, the RBA’s supposed 30 year mining boom went comprehenisvely bust in two and the currency cratered.

But by then the car industry’s fate was sealed. After the Ford decision, the critical mass for all manufacturers was lost and they exited one by one. As the currency kept on falling, locally produced cars would have become very competitive again versus increasingly expensive imports. Exports would have surged as well. But they were running down the factories instead.

This is one small piece in the overall puzzle of falling Australian living standards. Value-added jobs that deliver good wages subsituted by “bullshit jobs” that pay nothing and force locals to compete with cheap foreign labour.

You can cover up the loss of living standards as the productive economy is supplanted by quantitative peopling but you can’t stop it by doing so.

David Llewellyn-Smith
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