The end of car making in Australia...

[Brazen]

I think car making will return one day in one form or another.

We are the 12th largest economy in the world and buy over a million cars a year. It's getting cheap to make things here with the plummeting dollar and very low wages growth.

[b0son]

Originally Posted by Brazen

I think car making will return one day in one form or another.

Ditto. With 3D printing poised to make major inroads into manufacturing, its inevitable that smaller volume bespoke models become economically viable.

[Wretched]

Originally Posted by Brazen

I think car making will return one day in one form or another.

We are the 12th largest economy in the world and buy over a million cars a year. It's getting cheap to make things here with the plummeting dollar and very low wages growth.

It'll take at least a generation for that to happen, if ever. When it does happen it won't be manufacturing as we see it now.
For us to do anything in AU we need to be smart, we need to mature and get with the times. There are some areas we (in industry and in some government depts) are doing things quite well, others, well, it is probably better they wither and die out, only to be reborn new and free of the historical shackles.

So if we want to bounce back to become the lucky country we really need to take a long hard look at ourselves in the mirror and make the hard changes we need to. As a nation and as individuals. The collapse of industries and companies should, I hope, have been a good wake up call, that we are not competing locally but on a global scale. For us to compete we need to move with the times, use the knowledge, environment and skills we have to our advantage, for the long term.

[Polyal]

I wonder how many cabs are bought each year and whether you could justify a "black cab" Australian style? Sounds a bit communist but surely nationwide there is enough of a market. Make a Hybrid, LPG and TDI option if you must, use the I6 in its different forms.

[vztrt]

Originally Posted by Polyal

I wonder how many cabs are bought each year and whether you could justify a "black cab" Australian style? Sounds a bit communist but surely nationwide there is enough of a market. Make a Hybrid, LPG and TDI option if you must, use the I6 in its different forms.

If you tied it in with police cars there might be a market.

[Brazen]

Originally Posted by b0son

Ditto. With 3D printing poised to make major inroads into manufacturing, its inevitable that smaller volume bespoke models become economically viable.

Yeah low volume high quality niche stuff. Whatever it will be, it will probably be local companies. Land Rover Defender and Landcruiser 79 series are being cancelled in the next few years due to emissions standards so a big gap in the market there.


Stuff it, just build a civilian version of the Bendigo-built Hawkei lol

[minheim]

Originally Posted by Polyal

I wonder how many cabs are bought each year and whether you could justify a "black cab" Australian style? Sounds a bit communist but surely nationwide there is enough of a market. Make a Hybrid, LPG and TDI option if you must, use the I6 in its different forms.

Most taxis these days are not bought new but are sourced second hand. Further with the rise of Uber, it is difficult to see much of a market for a dedicated taxi vehicle.

In hindsight, we really should have created an Australian owned manufacturer after WW2 rather than allow the industry to be foreign owned and hence not free to fully export in the national interest. Look how successful Holden was throughout the 1950s and 1960s. It was considered Australia's own even though foreign owned. There was a massive local industry in the 1960s with the big 3 and lesser players like Leyland, Rootes, VW, Nissan and Renault; all benefitting from local demand, tariffs and quotas. Imagine if Chifley or Menzies had taken advantage of patriotism and Australian nous and created a true local manufacturer. Australia was offered the opportunity to buy the VW factory after ww2 but declined. Imagine if we had of bought it and produced our own peoples car, not just for Australia but the world.

[tranquilized]

Originally Posted by minheim

In hindsight, we really should have created an Australian owned manufacturer after WW2 rather than allow the industry to be foreign owned and hence not free to fully export in the national interest. Look how successful Holden was throughout the 1950s and 1960s. It was considered Australia's own even though foreign owned. There was a massive local industry in the 1960s with the big 3 and lesser players like Leyland, Rootes, VW, Nissan and Renault; all benefitting from local demand, tariffs and quotas. Imagine if Chifley or Menzies had taken advantage of patriotism and Australian nous and created a true local manufacturer. Australia was offered the opportunity to buy the VW factory after ww2 but declined. Imagine if we had of bought it and produced our own peoples car, not just for Australia but the world.

This is the most important point I believe. None of the local manufacturers were truly Australian, the big decisions were made overseas. So even if the government kept supporting them financially, it would only have delayed the inevitable departures.

But of course this transition could have been handled a lot smarter, and not have all 3 pack up and leave with in a year of each other.

[Kieron]

Originally Posted by tranquilized

This is the most important point I believe. None of the local manufacturers were truly Australian, the big decisions were made overseas. So even if the government kept supporting them financially, it would only have delayed the inevitable departures.

Spot on mate, and that's why that article is dribble.

But of course this transition could have been handled a lot smarter, and not have all 3 pack up and leave with in a year of each other.

Problem is the industry is so small in Aust that once the first one goes, it puts pressure on the suppliers who provide to all 3. If one of those suppliers fails after Ford shuts down, then components to the remaining manufacturers are disrupted, manufacture stops, the workers are idle while new suppliers are sorted, components from tier 2/3 suppliers aren't required and so on

As it is now, the suppliers know exactly where they stand and won't have to string manufacturing on for years at progressively lower volumes.



As for the govt spending, the money previously allocated to the vehicle manufacturing industry (an ailing business as a whole) can now be reallocated to more profitable ventures, some of which could potentially provide employment for the unfortunate staff who've lost their jobs.

[amiers]

have a read of this and a huge part of the problem is in it.




High wages stall Holden engine
GRACE COLLIER THE AUSTRALIAN DECEMBER 10, 2013 12:00AM
Print

Illustration: Sturt Krygsman Source: TheAustralian
ONLY $150 million a year will save Holden? Rubbish. The Holden Enterprise Agreement is the document that has utterly sunk Holden's prospects. It defies belief that someone in the company isn't being held to account for it.

Holden's management masks a union culture beyond most people's comprehension. Employment costs spiralled way beyond community standards long ago. Neither "pay freezes" nor more money will save Holden, but getting the Fair Work Commission to dissolve the agreement and put all workers on the award wage might be a start.

In 1991, the pre-enterprise bargaining award wage of a Holden entry level process worker was $462.80 a week. In 1992, Holden began enterprise bargaining and now a worker at that same classification level has a base rate of $1194.50 a week, a 158 per cent increase, or a compound increase of 4.4 per cent year on year for 22 years. Right now, base wage rates for process workers in the Holden enterprise agreement are in the $60,000 to $80,000 per year range and in recent times, "hardship payments" of $3750 were given to each worker.

The modern award for such workers mandates base rates in the $37,000 to $42,000 range. This means that before we add any of the shift penalties, loadings, 26 allowances and the added cost of productivity restrictions, Holden begins each working day paying its workforce almost double what it should. After you add in the other employment costs, I estimate Holden's workforce costs it somewhere close to triple the amount it should.

Many people who work at Holden don't actually work for Holden; they work for the union. Occupational health and safety people are given 10 days' paid time off a year to be trained by the union. Most companies do not allow unions to train their OH&S people because the knowledge is used to control the workplace to the benefit of the union.

Union delegates are also allowed up to 10 paid days a year for union training in how to be effective union delegates and two of these delegates are entitled to an extra Holden sponsorship of one paid month off to "further their industrial and/or leadership development".

Holden's rules on hiring casuals are shocking and unheard of in today's market. The agreement forbids Holden from hiring casuals except when a "short-term increase in workload, or other unusual circumstances occurs". If this situation arises Holden has to "consult and reach agreement" with the union. Further, "Engagement of the agreed number of casual personnel will be for the agreed specified tasks and the agreed specified periods." If any of this changes, Holden must get union agreement again. After three months of continuous full-time work a casual must be made permanent. It is impossible to run a business like this.

An ex-employee from Adelaide, on condition of anonymity, consented to an interview yesterday. He described the workforce as "over-managed", with one team leader for every six workers on the production line, when one for every 25 workers would suffice.

He said "some of us workers felt it wasn't necessary to get paid what we were getting paid to do the jobs we were doing", adding that their work is probably worth about "20 bucks an hour". A few years back, mates took redundancy packages in the order of "$280k plus". Workers are "like sheep" that blindly follow the union leadership. At induction, new workers are ushered into one-on-one meetings with the union rep who heavies them into joining. "It is made clear that if you don't join the union you will be sacked," he said. Union representatives "don't actually do any work for Holden", but rather make themselves full-time enforcers of union control.

He says workers are drug tested before hiring, but "only have to stay off it for a few weeks, get in the door and then you'll be right". Workers caught taking drugs or being drug-affected at work are allegedly put on a fully paid rehabilitation program, with special paid time off of about four weeks duration, before being let back into the workforce.

Australian workplaces have a zero tolerance for drug use, with instant dismissal the remedy, but at Holden "the union won't let the company sack" any workers caught dealing, taking or being on drugs. "If they did a random drug test tomorrow they'd probably have to sack 40 per cent of the workforce," he adds.

If the Holden scenario were playing out in a privately owned business, proper cost-cutting strategies would be used. If you have the will and can hire the skill, there are many ways to cut labour costs. The workers can be given a couple of years notice of significant wage drops and can receive lump sum payouts of entitlements to help bring down family debt.

Of course, these strategies are only ever used by business people who have no one else to bail them out. It seems Holden would rather leave the country than dissolve its enterprise agreement. The union thinks members are better off jobless than on award wages. Holden's fate seems sealed.

If Holden does leave, workers will receive the most generous redundancy benefits around. Holden says leaving will cost $600m. Most of this will go to staff payouts. The fellow interviewed agrees with my calculation: the average production-line worker will walk away with a redundancy package of between $300k-500k.
__________________

[Wretched]

They could become train and tram drivers...

[Brazen]

Don't put Neoliberalism rubbish from The Australian on here.

Unions were very accomodating including wage freezes for years, forced annual leave and working one week on one week off at half pay. Plus introducing casual and contract work instead of ongoing.

[tranquilized]

Originally Posted by Kieron

Problem is the industry is so small in Aust that once the first one goes, it puts pressure on the suppliers who provide to all 3. If one of those suppliers fails after Ford shuts down, then components to the remaining manufacturers are disrupted, manufacture stops, the workers are idle while new suppliers are sorted, components from tier 2/3 suppliers aren't required and so on

Yeah I realise that, but it was looking like Holden and Toyota would have stuck around for a bit longer had it not been for the current governments attitude. And Toyota at least probably would have done ok with the dollar dropping as it is now.

I just figure spreading the closures out over 5 or 10 years would have been better than 1 or 2

[amiers]

Originally Posted by Brazen

Don't put Neoliberalism rubbish from The Australian on here.

Unions were very accomodating including wage freezes for years, forced annual leave and working one week on one week off at half pay. Plus introducing casual and contract work instead of ongoing.

What your saying is opening the doors of your business and paying 3 times what you should will keep your company afloat. As for your quote of "neoliberalism" its got nothing to do with it its simple maths, pay too much for staff and don't sell enough product= your broke. mind you the one eyed unionist wouldn't get that because its all about the worker till the company is broke and then no one has a job and then its the boss's fault.

[Trump]

For those of you playing at home, here is the report mentioned in the article link I posted yesterday:

http://www.industry.gov.au/industry/...veIndustry.pdf

Oh and the author's claim that 45,500 people are directly employed by automotive manufacture is conservative:

Originally Posted by Bracks Review of Australian Automotive Industry

The Australian automotive industry encompasses a wide range of activities including vehicle production, component production, tooling and design and engineering.It is an important part of the Australian economy, employing over 64,000 people and accounting for almost 6 percent of manufacturing employment

These numbers are taken from ABS statistics.

[Kieron]

Originally Posted by Loud_Noises

For those of you playing at home, here is the report mentioned in the article link I posted yesterday:

http://www.industry.gov.au/industry/...veIndustry.pdf

Oh and the author's claim that 45,500 people are directly employed by automotive manufacture is conservative:



These numbers are taken from ABS statistics.

That document is 7 years old which from memory, was when the local car industry had a reasonable but slowly declining slice of the market? certainly well before the GFC took affect down here.

[Trump]

Originally Posted by Kieron

That document is 7 years old which from memory, was when the local car industry had a reasonable but slowly declining slice of the market? certainly well before the GFC took affect down here.

That is true, and I contend that the numbers are only slightly down on the figure quoted in the Bracks report.

[Bill M]

Originally Posted by Brazen

Don't put Neoliberalism rubbish from The Australian on here.

Unions were very accomodating including wage freezes for years, forced annual leave and working one week on one week off at half pay. Plus introducing casual and contract work instead of ongoing.

Agreed.
Note in the article referenced...

An ex-employee from Adelaide, on condition of anonymity, consented to an interview yesterday

Hmmm.

[Bossxr8]

Originally Posted by amiers

What your saying is opening the doors of your business and paying 3 times what you should will keep your company afloat. As for your quote of "neoliberalism" its got nothing to do with it its simple maths, pay too much for staff and don't sell enough product= your broke. mind you the one eyed unionist wouldn't get that because its all about the worker till the company is broke and then no one has a job and then its the boss's fault.

Wages only make up a small % of costs involved in making cars. Even if the workers were on minimum wage it wouldn't have kept the doors open.

[GTP534]

[QUOTE=Kieron;5474817]That article just doesn't take the big picture and fact into account.

Fact, the GFC bought GM to bankruptcy and Ford USA perilously close. Once one of the big three went down, it would have caused a domino effect and the Tier 2/3 companies would have gone hence the US govt. jumping in to save GM/Chrysler and ultimately Ford.

Ford managed to stave of bankruptcy and a big contributor to this was the 'One Ford' concept, this spelt the death knell for the Falcon/Territory.

Once the Falcon/Territory is gone, it spelt the end for Aussie Ford manufacturing.

Ford Aus announced it will cease manufacture while the Labor govt was still in power.

Like the US, once one of the three down here pulled the plug, its clear the others would follow.
QUOTE]

And that is why I don't think the article in the opening post is an honest assessment. It's a bit naïve to think that Joe Hockey and Truss are the ones to blame for the end of car manufacturing in Australia.

[Trump]

[QUOTE=GTP534;5475133]

Originally Posted by Kieron

That article just doesn't take the big picture and fact into account.

Fact, the GFC bought GM to bankruptcy and Ford USA perilously close. Once one of the big three went down, it would have caused a domino effect and the Tier 2/3 companies would have gone hence the US govt. jumping in to save GM/Chrysler and ultimately Ford.

Ford managed to stave of bankruptcy and a big contributor to this was the 'One Ford' concept, this spelt the death knell for the Falcon/Territory.

Once the Falcon/Territory is gone, it spelt the end for Aussie Ford manufacturing.

Ford Aus announced it will cease manufacture while the Labor govt was still in power.

Like the US, once one of the three down here pulled the plug, its clear the others would follow.
QUOTE]

And that is why I don't think the article in the opening post is an honest assessment. It's a bit naïve to think that Joe Hockey and Truss are the ones to blame for the end of car manufacturing in Australia.

It is an accurate assessment of the consequences of shutting down, not however about who is to directly blame for it.

[Kieron]

I'm not even sure it's that. The figures seem wrong for starters. Here's more recent figures on head count -
http://www.news.com.au/technology/in...-1227142476354

According to this article, total employees accross the three is 9,750 so that the max that can possibly go.

Breaking those figures down
Ford Australia total workforce: 2450
Factory: 850
Engineering and design: 1200
Head office staff: 400

The 850 will go, some of the had office will go, let's say down to 250 left so that's 1000 from ford if we assume the engineering/design all stay.


Toyota Australia total workforce: 3900
Factory: 2500
White-collar: 1400

Let's say they lay off all but 250, so that's 3,650.


Holden Australia total workforce: 3400
Factory: 1700
Engineering and design: 500
Head office staff: 1200

1,700 and possibly 950 from head office and engineering/design is staying so 2,750.

That's 7,400 vs the articles 12,500. He says unemployment is on the rise but according to ABS, employment is on the rise too -
http://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0


So are his Figures up to date?
Why doesn't he mention the opportunity cost of that money being invested elsewhere?

It's quite possible that some of these people will be able to retire, white collars have transferable skills in most cases which leaves the remaking factory employees, some of who will re skill and some will be become long term unemployed.

[vztrt]

Originally Posted by GTP534

And that is why I don't think the article in the opening post is an honest assessment. It's a bit naïve to think that Joe Hockey and Truss are the ones to blame for the end of car manufacturing in Australia.

Funny enough the GFC saved the car industry in the UK.....but then again their government isn't relying on mining to save them.

[Wretched]

Originally Posted by vztrt

Funny enough the GFC saved the car industry in the UK.....but then again their government isn't relying on mining to save them.

It did and it didn't. The Brits learnt the hard way from the Germans in 70's and 80's. English car making was in the dumps and people had abandoned them. They learned a lot from this experience (and it helped that the Germans owned their car manufacturers, well a few of them) and applied it. Unfortunately we didn't get that assistance.

[vztrt]

Originally Posted by Wretched

It did and it didn't. The Brits learnt the hard way from the Germans in 70's and 80's. English car making was in the dumps and people had abandoned them. They learned a lot from this experience (and it helped that the Germans owned their car manufacturers, well a few of them) and applied it. Unfortunately we didn't get that assistance.

More money was invested to keep people employed in the UK otherwise it was going to be left to die. Here Holden started getting ridiculed by the government and pressured into making a decision. Funny enough Holden and Toyota could have survived.

FGX was going to be the last Falcon regardless if the government would try or not try to save manufacturing. The money wasn't there and the investment required for a 50yo plant (in which the only way to fix it was to build a new one) wasn't going to happen. The low sales were not going to be enough to justify large amounts of R&D money.

But to try and blame one government is moronic. Many decisions by successive governments have destroyed car manufacturing in this country. Design and testing is still viable and more money is invested into the economy....the problem is their aren't as many jobs compared to when car manufacturing was going gangbusters.

[Wretched]

Government policy over subsequent incumbents is not only to blame, the company's who ran these outposts are also to blame. Trying to run their shops on a shoe string budget and not investing more into the product and process and leaving them wither on the hope of patriotic buyers is another contributing factor (among many others).
In the end, it is what it is and we have to learn from mistakes made, make the changes required and start again.

[Spammy]

Originally Posted by Polyal

I wonder how many cabs are bought each year and whether you could justify a "black cab" Australian style? Sounds a bit communist but surely nationwide there is enough of a market. Make a Hybrid, LPG and TDI option if you must, use the I6 in its different forms.

Proven to be a dead end....the company that makes black cabs for London has moved prodcution to China, after it went broke muliple times in the UK. NY cab fleet is moving to Nissan people mover vans.

[Kieron]

Originally Posted by Wretched

Government policy over subsequent incumbents is not only to blame, the company's who ran these outposts are also to blame. Trying to run their shops on a shoe string budget and not investing more into the product and process and leaving them wither on the hope of patriotic buyers is another contributing factor (among many others).
In the end, it is what it is and we have to learn from mistakes made, make the changes required and start again.

Not sure you could 'blame' the companies as such. Australia is a tiny market and for a long time, Ford/Holden Aus have been designing/engineering/selling a unique vehicle for this market. There's only so much a company would be willing to invest and to be honest, both outposts have done an awful lot with little for a long time but given the world car market now, it's time for these unique platforms to go unfortunately.

[PALE ALE]

The winding back of tariffs killed the Australian car industry. Just as the winding back of tariffs in every other industry, has killed it.

[Wretched]

Originally Posted by Kieron

Not sure you could 'blame' the companies as such. Australia is a tiny market and for a long time, Ford/Holden Aus have been designing/engineering/selling a unique vehicle for this market. There's only so much a company would be willing to invest and to be honest, both outposts have done an awful lot with little for a long time but given the world car market now, it's time for these unique platforms to go unfortunately.

Agreed, however, the US bosses need to take some of the responsibilities. It is their company after all and not the government's.
It is their responsibility to be investing in the product and the subsequent infrastructure.