Coalition could crush car industry - expert

[Brazen]

Ive heard Professor Roos speak, he is very switched on when it comes to manufacturing, he was brought over from the UK and has an outsider's perspective of the Aussie car industry and its benefits.


http://www.goauto.com.au/mellor/mell...257BC1001C14B8

Industry adviser Goran Roos rejects Coalition’s PC review plan, flags niche future
8 August 2013
By BARRY PARK
ONE of the key architects shaping Holden’s future believes Australia will not have a major car manufacturing industry if there is a change of government.

Professor Goran Roos, the chair of South Australia’s Advanced Manufacturing Council who has just completed a crucial cost-savings report for car-making unions based on Holden’s internal financial data, told a conference in Melbourne today that the industry would not survive if a federal Coalition government came into power, based on the strength of its current policy.

This could see Holden and Toyota, the two remaining local car-makers after Ford shuts its factories in 2016, also closing down, leaving only a small-scale automotive industry operating in Australia.

The Coalition has committed to launching a Productivity Commission review into public funding for the Australian car-making industry if it is elected in September’s poll.

It has also promised to cut $500 million from the Automotive Transformation Scheme.

Shadow industry minister Sophie Mirabella said the Coalition would work closely with the industry and the Productivity Commission “to ensure that car industry funding is allocated objectively and sensibly, and that money is paid in accordance with clearly defined guidelines and benchmarks”.

However, Prof Roos said the Productivity Commission review could spell the end for Holden and Toyota, and the more than 55,000 workers associated with the car-making industry.

“My personal view is that if the Coalition wins this election, and if they decide to take three months out – which is very optimistic – to do another productivity review, then the industry will be gone well before that productivity review is out,” Mr Roos told the AutoCRC conference on sustainable manufacturing.

“The decision would have been made ... it’s very simple.”

Prof Roos said one solution for Australia’s industry was to adapt to producing small-volume cars on behalf of other manufacturers.

He said a potential model was to become like Austrian car-maker Magna Steyr, which produces low-volume specialist vehicles on behalf of other car brands.

“There’s a debate in Australia that sometimes assumes that the only people who make cars are people with brands on the front of the car,” he said.

“It’s not right. Most cars that people buy that are specialised versions of something ... it’s not made by (the car brand).

“It’s made by a company called Magna Steyr and they do not make cars in volumes higher than 100,000 – they usually make them in numbers much smaller than that – and they are very profitable.

“So don’t tell me that we can’t make cars profitably in small volumes – but it is a different way of making cars.”

Prof Roos said producing limited runs of specialist vehicles would have a huge impact on the supply chain feeding parts into the manufacturing process.

“It means incredibly quick response times, incredibly agile manufacturing, the ability to do multiple things at the same time,” he said.

“Or you can decide you don’t want to play, it’s too hard.

“You can do a local platform with local production, but that will require government money – there is no other choice, and it will require increasing amounts of government money.

“At the moment we pay about $18 per capita in Australia to keep them (the car-makers) here, and the next country up is about $95, and then it goes up to several hundred (dollars),” Mr Roos said.

“So if you want to keep them here we’re probably going to have to normalise our contribution to what is the norm in this area, and that means a lot more money paid, but also to understand what you get for that money.

“If I add up the benefits to the economy of this industry, I get around, give or take, $40 billion to $50 billion,” he said.

“Investing $1 billion to get $40 billion on the whole seems to me to be quite a reasonable estimate – maybe I’m not that good at maths.”

Prof Roos has studied Holden’s books in recent weeks at the request of the Federation of Vehicle Industry Unions, and has made recommendations on how an estimated $15 million can be saved annually at the car-maker.

Workers are expected to vote next Tuesday (August 13) on whether to accept a new enterprise agreement, which will be crucial in determining the future business plan of the company, which is expected to be finalised by the end of September.

Holden has said it will wait until after the federal election on September 7 before making a final decision on its manufacturing future.

[stazza]

Another Holden thread. If they are given any money we will never see the end of it.

[Road Games]

To each their own...

[PepeLePew]

Politics and positioning designed to sway votes.

[The Monty]

We will not have a major car manufacturing industry anyway. Regardless of who will be in power, its basically dead.

[Polyal]

Originally Posted by The Monty

We will not have a major car manufacturing industry anyway. Regardless of who will be in power, its basically dead.

This..the issue is bigger than Australian politics.

[WPR1]

Originally Posted by The Monty

We will not have a major car manufacturing industry anyway. Regardless of who will be in power, its basically dead.

Agreed, any further funding is just throwing more money away. It's unfortunate but we can't complete with Asian production costs and we expect a lot more standard kit and safety features these days that blow out development and production costs. The world is a much smaller place and 'world cars' make sense - it is a business after all.

[jpd80]

You can't have import Tariffs when you're in free trade agreements but
maybe we should have reciprocal taxes on imported vehicles like Thailand does.

How about like Thailand, Australia imposed a 33% tax on vehicles above 2.0 litres and 66% on vehicles above 3.0 litres.
And tell that officious King of Siam until he reverses his tax on our vehicles he can whstle the dog for sales from Australia.

[pottery beige]

mining is rooted.. lol.

hth

[Brazen]

Originally Posted by pottery beige

mining is rooted.. lol.

hth

At my work, road design and road construction projects for mining companies has fallen off a cliff.

[mik]

I would take a punt and say the decision is already 90 percent made for holden(but don't quote me on that ),
didn't abbot talk about adjusting company tax or something? and also removing the carbon tax, if the carbon tax goes will energy costs come down/cost of living go down .......eventually ??? did the proffesorry take these into account??? ...........it is anyones guess what will happen with Australia's political bizzo, but it does seem Abbott wants to make business more profitable.... or less costly, the exact opposite of the other mob for the last 6 bloody years.

[FPV8U]

Its at the very least an election or two too late for this argument, the industry is shot and for the most part the buying public have left these brands behind.

Had more things been done around 2007/08 maybe it had a chance but its been on the slide for over half a decade now.

[buggerlugs]

What amazes me is one of the mob have come out and said, if elected we will use Australian made cars in all Government departments to support the local car industry. WHY HAVENT BOTH PARTIES DONE THIS ALL ALONG !!!! If they had supported the Australian car industry 20 years ago , we may of still had a thriving car industry today FFS !!

[WPR1]

Originally Posted by buggerlugs

What amazes me is one of the mob have come out and said, if elected we will use Australian made cars in all Government departments to support the local car industry. WHY HAVENT BOTH PARTIES DONE THIS ALL ALONG !!!! If they had supported the Australian car industry 20 years ago , we may of still had a thriving car industry today FFS !!

100% agree - how can you expect the public to support the local car industry when the government don't trough their purchasing choices.

[Polyal]

Mind you can you imagine the complacency of Ford and Holden knowing they had some sales in the bag? Sure that volume would be handy, but would the buy Australian policy mean a fair split or fair game? If fair game then I dont know if the result would be any different.

Its all about global platforms.

[bobthebilda]

Originally Posted by Brazen

Ive heard Professor Roos speak, he is very switched on when it comes to manufacturing, he was brought over from the UK and has an outsider's perspective of the Aussie car industry and its benefits.

So when he says

Prof Roos said one solution for Australia’s industry was to adapt to producing small-volume cars on behalf of other manufacturers

Does that not mean he is advocating the end of mass production in Australia ie (even tho they arent mass producers by world standards) The end of Holden and Toyota producing in Australia. Because even if one now does call Toyota Oz and Holden as small volume, if we got other smaller volume producers in, then everyone would be getting a smaller proportion of the government money.

And i am OK at maths, but when he says -

So if you want to keep them here we’re probably going to have to normalise our contribution to what is the norm in this area, and that means a lot more money paid, but also to understand what you get for that money.
“If I add up the benefits to the economy of this industry, I get around, give or take, $40 billion to $50 billion,” he said.
“Investing $1 billion to get $40 billion on the whole seems to me to be quite a reasonable estimate – maybe I’m not that good at maths

I get a little confused. If direct goverment spending to the industry is running at $500 million a year (and this does no include indirect subsidies), and the three majors are making 200,000 cars a year. Then does that not mean our $1 billion investment is getting 400,000 cars. The only way we are getting $40 to $50 billion benefit to the economy is if those cars are selling for $100,000 to $125,000 each.

Previously when someone with a vested interest in the car industry (and lets not forget that Goran Roos was appointed thinker in residence by the SA labor Government), they have managed to quote the per capita spend on the car industry of three or four countries. Now Mr Roos has done a calculation of the 45 car producing countries in the world and states -

“At the moment we pay about $18 per capita in Australia to keep them (the car-makers) here, and the next country up is about $95, and then it goes up to several hundred (dollars),” Mr Roos said.

But surely if someone comes out and says

So don’t tell me that we can’t make cars profitably in small volumes – but it is a different way of making cars.”

, then the answer must be, Mr Roos, if they can make them profitably, then why do they need $500 million a year in direct subsidies to make losses???????????????

[jpd80]

Originally Posted by bobthebilda

I get a little confused. If direct goverment spending to the industry is running at $500 million a year (and this does no include indirect subsidies), and the three majors are making 200,000 cars a year. Then does that not mean our $1 billion investment is getting 400,000 cars. The only way we are getting $40 to $50 billion benefit to the economy is if those cars are selling for $100,000 to $125,000 each.

Consider the combined business activity of all people employed in the industry and their suppliers,
the benefits to their communities if those jobs did not exist and all products were just imported into Australia.

[jpd80]

There are some hard decisions to make, do we want ot need a car industry in this country?
If so, are we prepared to subsidize it and with how much money?

The point is that most people are unaware as to how much the car industry is assisted
and just how much it adds or doesn't add to the wealth and business activity in Australia.

[lucas2]

Originally Posted by bobthebilda

I get a little confused. If direct goverment spending to the industry is running at $500 million a year (and this does no include indirect subsidies), and the three majors are making 200,000 cars a year. Then does that not mean our $1 billion investment is getting 400,000 cars. The only way we are getting $40 to $50 billion benefit to the economy is if those cars are selling for $100,000 to $125,000 each.

He's talking about investing in the companies, which provides people with jobs. These people then take their money and spend it, thus supporting the economy, and making money for the government at the same time.

[Road Games]

Ther are Other ways to earn an income...

[pottery beige]

industry was well on its way heading for departure lounge.. who / he said / she said... now is much as much irrelevant....

[COUP-76]

Have a geeza at this short ad, sums up where Australia's at & what we have to lose for ours & our childrens future!!

http://fapm.publish.viostream.com/fapm?v=xhwne9o8j5k8

I would like to see all manufacturing stay no matter what the brand!!

[bobthebilda]

Originally Posted by COUP-76

Have a geeza at this short ad, sums up where Australia's at & what we have to lose for ours & our childrens future!!
http://fapm.publish.viostream.com/fapm?v=xhwne9o8j5k8
I would like to see all manufacturing stay no matter what the brand!!

It sums up that whilst there are gullible people around, those who have a vested interest in maintaining an inefficient car manufacturing industry will be able to keep making these misleading videos, with no fear of accountability.

I am not sure what role the car industry had in the creation of zinc cream, the solar panel, the speedo etc etc. They have tried to lump the ingenuity that has been created by certain Australian inventions (ie our manufacturing sector), and then stated that as the car industry is part of the manufacturing sector, then it must somehow be credited with this ingenuity.

The simple fact is that any ingenuity that is created by the australian car industry (and the video can only recall that the creation of the ute was the australian car industries last bright idea), doesnt become an australian "asset" anyway, as it is owned by a foreign company. By supporting an inefficient business, we are allocating alot of human and monetary assets, that could be spent in other areas of the manufacturing sector that we have natural advantages at.

Its very fortunate that the parents of the 11.5 million Australians employed outside the manufaturing sector, didnt give up hope.

The simple thing is, its the dream of parents and the aspirations of the kids that create a countries wealth. Aim a bit higher than the manufacturing sector for your kids, and only use it as a fallback if genetic traits prevail.

[eb2fairmont]

You're right. Mining is rooted. All the expansion projects in the pipeline are now going into production and the rest have been shelved or delayed.

It may be a small part of the economy, but the ripple effects will be huge.

[zilo]

Tony Abbott had the peoples forum in Geelong a few months ago and I was one of those 100 voters in the most marginal seat in Australia (Corangamite), we were invited to ask questions etc.

Afterwards we asked him off the record questions, he basically said that Ford should simply make Territory it's only model and export it....that would be viable he said...????


I shook my head and walked away thinking we were doomed with this guy.

[Professor Farnsworth]

thread is basically political which breaches site T&C.

[SpoolMan]

http://www.fordforums.com.au/announcement.php?f=2&a=2