Australia's car industry one year from closing its doors

[Express]

Australia's car industry one year from closing its doors


Date: October 17, 2015

Jared Lynch and Mark Hawthorne


From one of just 13 countries in the world capable of building a car from the ground up, Australia's 90-year history of assembling and building automobiles is coming to an end.


The cost of car makers leaving Australia


Everyone knows car makers are on their way out and jobs in the sector are being slashed, but the flow-on effects to the wider economy may not be known for some time.

The owners of the car component maker were late. They knew it. Decades spent churning out parts from factories in Sydney and Melbourne for one of the biggest suppliers for Australia's domestic car making industry had given so many good years.

It employed 30 staff and was profitable, banking about $5 million a year. But in July this year, they called to PPB Advisory's Ben Verney for help after seeing a note he'd written urging businesses linked to cars to "act now to prepare for the endgame".


"My concern is a very large proportion of them won't be able to survive after the closure." PPB Advisory partner Stephen Longley


For this component company, it doesn't look good.

"They confessed that they had been sitting on their hands for 12 months, and that's what we were thinking as well," Verney says.

This is the real world frontline of an issue that has absorbed political and economic theorists for decades. The shift from rhetoric to reality will come frighteningly soon for many observers.

Ford will stop making cars here in exactly one year. Holden and Toyota will go by 2017. A clear picture is emerging in the sector that many businesses are in much the same position. They are too busy staying afloat to worry about the rocks ahead.



There are warnings of an employment wipeout as up to 200,000 jobs could be ripped from the economy.


Assistance debated



Illustration: Rod Clement


Now a debate is raging about whether the government should once again stretch its financial assistance - which has already run to billions of dollars in the past two decades - to the broader industry as they struggle for survival in the void left behind.

The new Turnbull government, like the Abbott government, wants its main assistance package to the industry, the Automotive Transformation Scheme (ATS), to come to a "natural conclusion" when car making finishes in 2017 – saving at least $400 million.

But the opposition, industry experts and academics argue the funding should run until 2020/21, its original legislated end, and be broadened to give businesses within the automotive supply chain a chance to diversify.

They argue the cost of keeping the scheme will be outweighed by the bill to the government from job losses and public-funded redundancies.

"There will be a number of businesses who will be running hard day-to-day, just running their existing businesses and fulfilling orders," Mr Verney's colleague Stephen Longley says.

"But it must be pretty hard when you go home at night and put your head on the pillow [knowing] that end is going to come in a year or two years – what happens after that?"


Victoria wants more assistance


The Andrews' Labor government in Victoria – where about 55 per cent of Australia's automotive workers live – is concerned.

"There is a lack of sufficiently robust and detailed business planning towards transition occurring across the sector," says the Victorian government's submission to a Senate inquiry into the automotive industry.

"Industry consultation indicates that many businesses have not started planning for a transition into different sectors or new markets."

It's been two years since Ford, Holden and Toyota announced they would close their factories in Australia.

Professor Goran Roos – who has advised state and federal governments and was on former prime minister Julia Gillard's Manufacturing Leaders Group – disagrees.

On average, he says, it takes a company about seven years to build alternative income streams and a new customer base. Professor Roos acknowledges this is difficult – particularly when a business hasn't already started on a diversification plan.

He estimates about 75 per cent of industry will shut down when Ford, Holden and Toyota quit local manufacturing.

"You would have then to say 'in order to save the companies in the supply chain, we should have negotiated a seven year extraction period'," he says.

"Yes, that would have cost us some money but that money would have been easily repaid by not having a very large chunk of the supply chain keeling over. We didn't do that because we had a thoughtless approach on how to get them to leave."


Death knell sounded in 2013


The death knell for mass passenger vehicle making in Australia sounded two weeks before Christmas 2013, about six months after Ford announced it would shut its factories, when Nationals leader and the acting prime minister Warren Truss and former treasurer Joe Hockey attacked Holden in Federal Parliament.

In a seemingly calculated performance, the Treasurer said it was time for Holden to "come clean" and be "fair dinkum" with the Australian people over its future in the country.

"Either you're here or you're not," Mr Hockey said.

Mr Truss added that Holden "owe it to the workers of General Motors not to go into the Christmas period without making a clear commitment to manufacturing in this country."

For Holden management, which had been in commercial-in-confidence discussions with the government for months, it was a clear signal that the federal cabinet had turned on the company, and wanted a swift end.

Holden in turn delivered a swift reply; it would close its Australian factories by 2017.

Two months later Toyota announced it would close its factory too, given there would be not enough volume from those in the component supply chain to keep its Australian manufacturing operations continuing.


Suppliers upping pressure for support



Bosch Australia President Gavin Smith. Photo: Wayne Taylor


One major player in that supply chain is German multinational engineering and electronics company Bosch.

It produces and engineers automotive parts in Australia and has had a presence in the country since 1907.

The ATS has helped Bosch fund its local expansion plans, and the president of its Australian subsidiary, Gavin Smith, says: "it would be a shame to throw the sector under a bus and walk away from it because the three vehicle manufacturers are stopping".

Following consolidation of Bosch's global diode production in Australia, and closure of its German manufacturing plant, Bosch is planning to double its output of diodes to 180 million pieces a year. The expansion would require further investment of up to $15 million, and result in "modest" job creation, Mr Smith says.

But Mr Smith said Bosch's head office decision to consolidate diode production in Australia was approved on the basis that the ATS legislation would continue until 2020/21.

"The investments that we have made here were underpinned by the current scheme as legislated and if that scheme were to change or close early, the business case for those decisions would likely be quite different," he said,

"From a multinational subsidiary perspective, this is not a discussion that we enjoy."


Decisions harder to justify



Former Victorian premier and treasurer John Brumby. Photo: Alex Ellinghausen


This doesn't mean Bosch will shut its Australian diode factory in Melbourne's outer east. Mr Smith said production would continue, but it made the next investments more difficult to justify.

"The challenge in a multinational is that you are not just competing with your typical external competitors. You're competing for capital investment from a parent who can invest pretty much anywhere in the world.

"Australia is not at the front of mind for the group when they consider where to make investments.

"And when the board sees after a period of time that investment decisions they have made are being undermined by changes to the underpinning legislated schemes, then that makes them question is it the right place to make future investments."

Former Victorian premier and treasurer John Brumby said while the services sector – the three main industries of which are education, financial services and tourism – accounted for 90 per cent of the new jobs in the economy, Australia still needed a strong manufacturing sector.

"Every successful advanced economy around the world, still makes and creates things. So for us, the big challenge is what we are going to do in the creative and making space, and the answer is not much," Mr Brumby said.

"There is a bit of defence work and F/A-18 and maybe some submarine work but one of the mainstays has been motor vehicles."


Research funding must lift



Photo: Paul Rovere


Mr Brumby said more government assistance needed to be poured into research and development and encouraging entrepreneurship.

"We are just way underdone. University research funding has been cut, national health and medical research council funding for applicants now, they have a 15 per cent chance of success..

"We have seen CSIRO funding cut, so all of the engine rooms have had their funding substantially reduced and the biggest single driver of investment in manufacturing – the motor vehicle industry – has had its support significantly reduced.

"When you put those two waves together, it's a track that doesn't lead you to good news or good outcomes. It needs to change, and it needs to change quickly."


Job losses could be heavy





The Federation of Automotive Products Manufacturers estimates the automotive industry generates 6.5 jobs in associated supply and consumer industries for every one automotive job.

This is where were the job loss estimates from the closures of Ford, Holden and Toyota's factories become murky because its calculations are based on how far and wide you go in the supply chain.

University of Adelaide researchers, Lance Worrall and John Spoehr, estimate the closures will trigger a net loss of just under 200,000 jobs, with about $29 billion wiped off Australia's gross domestic product – a gauge for the economy's health.

"Now is the time for robust and well resourced growth and innovation promoting policies to help counter deindustrialisation and support accelerated industry diversification into new manufacturing opportunities and value chains," the pair wrote in a submission to the Senate Economics References Committee, which is investigating the future of Australia's automotive industry.

"A repurposed ATS could make a significant contribution to this urgent challenge."

The Senate inquiry's interim report was released in August and recommended the government should keep the ATS running until 2020/21 to help businesses diversify.

It found that about $800 million under the scheme would be unspent and go back into the government's coffers unless it was changed to allow businesses to produce parts for purposes other than domestic vehicle manufacturing.


Labor sounds warning on employment



Former industry and innovation minister Kim Carr. Photo: Paul Jeffers


Labor Senator and former industry and innovation minister Kim Carr said "hundreds and thousands of Australian families are facing unemployment".

"I'm talking about people in all sorts of places," Senator Carr said.

"I was talking to a locksmith company, talking to people in the steel industry, there are people in the glass sector. These are people who aren't anywhere near the registration for ATS but dependent on the orders to come through for Australian automotive manufacturing.

"You don't have to accept this conservative ideology that you de-industrialise the country. It's just not necessary. I have recently visited plants that are looking to expand but they need assistance."


Government defends managing transition



Innovation Minister Christopher Pyne. Photo: Pat Scala


The fact is, the government has already moved on from the car industry. Treasurer Scott Morrison said international trade agreements, including the ones Australia has signed with Korea, Japan and China, as well as the 12 nation Trans-Pacific Partnership would help fuel Australia's next wave of economic prosperity.

"The government is focused on innovation and helping develop new opportunities for Australians, particularly with our free trade agreements and the Trans Pacific Partnership just concluded by [Trade Minister] Andrew Robb, that have provided further access into, particularly the growing middle classes in Asia," Mr Morrison said in a statement.

"We are working to build a more agile, competitive and innovative economy, one that is going to assist our nation address modern challenges so that Australians will be better off in a new economy with new jobs in the future."

Innovation Minister Christopher Pyne argues in a statement that keeping the ATS tied to domestic vehicle production, which is how it will come to a "natural conclusion" in 2017 was "critical to an orderly transition of the automotive manufacturing".

Mr Pyne said the government's $155 million 'growth fund', which was announced in May 2014, was helping automotive workers find new jobs.

"The government is working with the automotive industry to ensure a clear, orderly transition from passenger vehicle manufacturing by the end of 2017," he said.

"The Growth Fund is helping automotive workers from Holden and Toyota transition to new jobs; encouraging diversification by automotive supply chain firms; and accelerating new private sector business activity outside of car manufacturing in Victoria and South Australia."

The government is back by the Productivity Commission which found the ATS "imposes considerable costs on taxpayers and other parts of the economy" and should end when the car makers close their factories.

"Further, the ongoing nature of assistance provided by the ATS and its predecessor, the Automotive Competitiveness and Investment Scheme partly shields firms from competitive pressures, and may result in firms making decisions that are not based on a business case that is sound over the long term," the commission reported.

It said more than $300 million of assistance remained available to component manufacturers between 2014 and 2017, and this could be used, in part, to aid diversification efforts.

The Productivity Commission also estimated that Australian taxpayers sank $30 billion of subsidies into the local car industry between 1997 and 2012.

But there is another way of looking at the data.

Australia, at least for the time being, is one of just 13 countries with a car industry spanning design to production.

According to former manufacturing minister Kim Carr, Australian taxpayers pay $17.80 per person in automotive manufacturing subsidies to keep those jobs and that industrial capability. The same subsidy figure for the United States industry is $264 per taxpayer.


A future of spare parts?





Ford has also managed to retain 63 of its suppliers to produce spare parts for existing Falcon and Territory models, and 17 of those businesses, including MTM and Futuris, will supply Ford's global operations.

"This work will help us maintain a supply of high-quality parts for our customers for years to come," said Carl Parkin, Ford of Australia's purchasing general manager.

Nissan has also kept on 160 people at its casting plant in Melbourne marking parts, complete with a little kangaroo symbol, in its Pathfinder and Navara trucks, LEAF electric cars and Infiniti Q50.

But as PPB Advisory partner Stephen Longley crunches the numbers – 150 manufacturers which supply the car makers directly and another 1000 to 2000 businesses supplying them with parts for their components – he believes there is still a role for government.

"A lot of these business don't have the capital to be able to diversify and it's not an area that traditional financiers will go near, particularly in the current climate in terms of a known exit," Mr Longley said.

"Even those who might have the energy and the feeling they could diversify, do they have the capital to be able to do it?

"My concern is a very large proportion of them won't be able to survive after the closure."

http://www.smh.com.au/business/the-e...12-gk7ip0.html

[johnydep]

It's very sad, in many ways.

Sad to see the end of Ford & Holden. I've grown up with a dad involved in the automotive industry, many makes and models in our lives, growing up in the boom years of Holden v Ford, Brock, Moffat, Johnson, and so on.

Sad but the writing has been on the wall for 20+ years. Previous governments tried to help. The Button Plan was meant to bring the number of vehicle manufacturers down, so that each had a bigger piece of the R&D dollar pie and increased domestic sales. The aim was always to push for an export model.

Sadly, only Holden & Toyota gave a half decent go at exporting. We then got lazy with the resource boom, forgot about the importance of manufacturing and exporting. Then the GFC hit, causing other countries to look internally for products to keep their work force employed.

Sad that Mitsubishi & Ford never took the need for exporting seriously, and instead just bled money from the R&D pie for little more than selfish internal needs. The Territory was a serious contender for export, let down by laziness and no guts from management.

Ford could have gone hammer & tongs after the export market with the Territory, they just needed to refine it quicker, add the turbo 6, the diesel engine & 6 speed auto much earlier & get the quality control sorted.
Holden could have had a decent go at the performance rear drive market, with a 4 door sedan & 2 door coupe. For the price, there is nothing else equivalent to the SS V8 rear drive set up.

Sad to see two great Aussie icons (US owned) slowly deleting Aussie muscle cars. Especially sad when you think about what they could have achieved if local management & US owners gave 100%.

[Brazen]

Worth bearing in mind that Holden and Toyota had about $6 billion in investments lined up for after 2017. But the absolutely disgraceful attack by Hockey and Warren Truss in parliament killed that off - has there ever been any country that was so keen to see the end of a value adding industry that generated tens of thousands of jobs??

[FormulaFG]

I am genuinely about the future of this country. People just don't seem to see the long term value of keeping this industry. I am seeing the fallout already and the industry hasn't even shut yet.

[malazn mafia]

Originally Posted by johnydep

Sad that Mitsubishi & Ford never took the need for exporting seriously, and instead just bled money from the R&D pie for little more than selfish internal needs. The Territory was a serious contender for export, let down by laziness and no guts from management.

Ford could have gone hammer & tongs after the export market with the Territory, they just needed to refine it quicker, add the turbo 6, the diesel engine & 6 speed auto much earlier & get the quality control sorted.
Holden could have had a decent go at the performance rear drive market, with a 4 door sedan & 2 door coupe. For the price, there is nothing else equivalent to the SS V8 rear drive set up.

Sad to see two great Aussie icons (US owned) slowly deleting Aussie muscle cars. Especially sad when you think about what they could have achieved if local management & US owners gave 100%.

Pretty sure Mitsubishi exported a fair share of Magnas to the U.S. Was in the US last week and there are a decent number of familiar Magnas still getting around, badged as Diamantes. Only ever saw one Holden and that was an LAPD Holden Caprice. Pretty sure Ford Aus made an effort to export, but with a very traditional American parent company, with 'a not American designed, forget it' attitude, coupled with the Holden Commodore being a complete failure in the USA, the Falcon and Territory were left to rot...

[Sprint]

The government has basically shafted itself, even if it was losing money its better to still have it for the technical training, we are going to end up with a nation of aged care workers that are too retarded to build a proper billy cart.

I cannot see why the government cant force buying Australia only made cars to government car fleets, heck even communism is better than this tripe we have to swallow.

[Windsor220]

I dont think there was any money in exports.

[superyob]

There is more than just the economic argument to this sad tale of woe. The cultural cringe and self loathing of anything that Australians love or believe in by the political and social traitors in our midst has taken its toll and this is one end result...

[CJR09]

Originally Posted by Sprint

I cannot see why the government cant force buying Australia only made cars, heck even communism is better than this tripe we have to swallow.

I agree - but this is basically due to crap trade agreements - people should take more interest in things like the tppp or whatever the f its called and speak up - loudly!

[Sprintey]

Despite all the FTAs every metric I see measuring global trade... is falling.

If we put ourselves in a falling AUD, end of commodity cycle, stalling global trade environment, it makes a LOT of sense to make things domestically.

1920's/30's all over again, rinse and repeat.

[cheap]

Originally Posted by Brazen

Worth bearing in mind that Holden and Toyota had about $6 billion in investments lined up for after 2017. But the absolutely disgraceful attack by Hockey and Warren Truss in parliament killed that off - has there ever been any country that was so keen to see the end of a value adding industry that generated tens of thousands of jobs??

Wow I think you're on to something - blame a newly elected government which simply couldn't wait to send thousands of people to the unemployment queues.

Here I was thinking that people NOT buying sufficient numbers of locally produced cars might be the root cause of the problem.

[mik]

Originally Posted by Sprint

The government has basically shafted itself, even if it was losing money its better to still have it for the technical training, we are going to end up with a nation of aged care workers that are too retarded to build a proper billy cart.

I cannot see why the government cant force buying Australia only made cars to government car fleets, heck even communism is better than this tripe we have to swallow.

Half right , the government has actually shafted all of us and our kids, and those suits with all the perks that changed the direction of the country to one where we are heading down **** creek without a paddle really dont care to much about the little people, they have words for putting thousands of people out of work and into poverty, restructuring/reform, etc ,etc.

Some people will never get a job as a rocket scientist, despite smart *** politicians always saying we need to be the clever country, there are always people that need factory/manufacturing type jobs .
These are the ones that are disappearing faster than light, the road these dipstick/****** politicians have lead us down ............. leads to higher crime, greater unemployment, lower standard of living, and it is already happening, you only have to look at the news , same **** every night , we are becoming little america, ive been in the work force for 40 years and watched it happen.

[Dr Smith]

You can blame all the car company heads for their own demise but let's not forget our neighbours are more industrialised with much larger, modern plants using cheap labour building vehicles that more and more people now want. They also have huge domestic markets which helped fund their internatioanal expansions and with the hiring of European engineers and designers gradually improved their products and started their take over here and around the world.

The local 3 build models in a declining market segment and to produce here vehicles Australians actually buy now would mean competing with our cheaper to build neighbours and that would only lead to more red ink. It's more financially viable for Ford to use skilled locals to r&d a vehicle here but build it overseas.

If Toyota cannot make money building a Corolla or Hilux here or probably more correctly make more money by importing them, then no-one can.

[Adamz Ghia]

I will never forget watching Hockey have a go that day in parliament. It was a disgraceful and putrid performance that made me ashamed to be a liberal.

Ford was already gone, but Holden and Toyota could have made a real go of things had the government not been so pig headed.

[ebxr8240]

If Ford, GM in U.S. Think having a world car makes them more competitive ?
They better think again ... Asian cars with computer robot assembly is up there with the best..

[Peterwl]

A lot of words have been written on this forum, of which most are true on this subject.

But I would like to throw in a few other aspects of the decline in the Australian car industry.

Holden shot itself in the foot when it developed the VE Commodore. Heavy, ugly, poor vision from inside, noisy V6 engine, a V8 with no torque that guzzled fuel, drove like a truck, etc.

I am a Commodore fan and I would not own a VE. It has been downhill for Commodore quality since the VX II. On paper, the VF II will probably be a good seller for Holden.

If you produce what the people want, it WILL sell !

A VX II sized Commodore with modern V6’s, Turbo etc, fuel efficient V8 models as well. If they would have went this path, Commodore would have been the number 1 seller again in recent years.

It did not help that a “Green Labor Government” paid a lot of money to Ford to put a 4 cylinder engine in a huge hulk of a car. It was an expected FLOP, and it was a FLOP !

Pushing Ford and the rest to go to Euro 5 did not help either.

If only all this wasted Government ( and Ford ) money could have gone into the Falcon !

Better Air Con, Better Sound System, Fix the diff issues, reduce road noise from tyres, fix the flakey electronics, etc, etc.

Make it a good car and people WILL but it.

And the FG II Falcon could have been a great car.

The FG X looks like being a sales embarrassment, I keep looking for them on the road, but I have only seen a couple in Sydney. The nose job has been a horror.

I have an FG XR6 5 speed auto, and I still thing it is a good drive despite its faults.

That’s my 10 cents, and I too regret the coming closure of the Australian car manufacturing industry.

[johnydep]

Originally Posted by malazn mafia

Pretty sure Mitsubishi exported a fair share of Magnas to the U.S. Was in the US last week and there are a decent number of familiar Magnas still getting around, badged as Diamantes. Only ever saw one Holden and that was an LAPD Holden Caprice. Pretty sure Ford Aus made an effort to export, but with a very traditional American parent company, with 'a not American designed, forget it' attitude, coupled with the Holden Commodore being a complete failure in the USA, the Falcon and Territory were left to rot...

Most,if not all, of those "familiar magnas" are the U.S. Lancer.

Mitsubishi Australia exports were competing against similar FWD vehicles.
Holden exported a vehicle which had the potential to create a niche for itself, due to its performance RWD rarity.
Toyota's export program was growing, due to its parent company's program.
Ford had two things going for it - Territory & turbo I6. If proper management & planning was involved back in 2004-2006, there could have been the beginnings of a decent export market.

If the industry was protected from imports & there was no exporting, we'd be a third world country.

'Unfortunately with the financial woes facing MMC globally and the cancelling of the PS41L program MRDAus was unable to reach its full potential.' https://en.m.wikipedia.org/wiki/Mits...tors_Australia

'During its lifetime, the Magna had been exported in small numbers to Japan, Britain and the United States, where Mitsubishi did not make a big car at that time. Large cars sell in only small numbers in Britain and Japan and those exports were dropped. The US export market was closed when the US started making its own large car which, subsequently, came to Australia as the 380' http://www.theage.com.au/news/in-dep...090417845.html

'Toyota Australia this month exported its one-millionth vehicle to the Middle East, with a peak of 97,000 cars shipped in 2008.' http://www.news.com.au/finance/toyot...-1226726934192
'Biggest export year: In 2005 Holden exported 60,500 cars to the US and the Middle East.'
'Biggest export year: In 1991 Ford exported 30,000 Capris to the US.'
'Biggest export year: In 2002 Mitsubishi exported 25,000 sedans to the US and Canada.'

[Pablo999]

We need to build a global car to exist long term. Not many cars are made for one small market such as Australia. Just can't compete when everyone else builds on a global scale. Ford and Holden had Many attempts at a global offering but never really hit the mark.

[Serial_Fool]

Don't take this the wrong way, but Australian RWD sedans were too heavy to be sports cars, not roomy enough to be SUVs, too thirsty for a city-person to drive and too expensive in comparison to global cars.


What's more, our industry was never really OUR industry. Holden and Ford were always local outposts of American giants and such had to contend with the business plan of Executives stateside.

[xrystl]

Originally Posted by Serial_Fool

Don't take this the wrong way, but Australian RWD sedans were too heavy to be sports cars, not roomy enough to be SUVs, too thirsty for a city-person to drive and too expensive in comparison to global cars.


What's more, our industry was never really OUR industry. Holden and Ford were always local outposts of American giants and such had to contend with the business plan of Executives stateside.

And what's more is the miniscule volume Ford and Holden have/had in the big picture , in US speak it's not even one days production so shutting the production down is hardly a blip on the radar , sad but true and not reversible , hope the auto industry workers find other employment .

[Sprintey]

Originally Posted by Peterwl

A lot of words have been written on this forum, of which most are true on this subject.

But I would like to throw in a few other aspects of the decline in the Australian car industry.

Holden shot itself in the foot when it developed the VE Commodore. Heavy, ugly, poor vision from inside, noisy V6 engine, a V8 with no torque that guzzled fuel, drove like a truck, etc.

I am a Commodore fan and I would not own a VE. It has been downhill for Commodore quality since the VX II. On paper, the VF II will probably be a good seller for Holden.

If you produce what the people want, it WILL sell !

A VX II sized Commodore with modern V6’s, Turbo etc, fuel efficient V8 models as well. If they would have went this path, Commodore would have been the number 1 seller again in recent years.

It did not help that a “Green Labor Government” paid a lot of money to Ford to put a 4 cylinder engine in a huge hulk of a car. It was an expected FLOP, and it was a FLOP !

Pushing Ford and the rest to go to Euro 5 did not help either.

If only all this wasted Government ( and Ford ) money could have gone into the Falcon !

Better Air Con, Better Sound System, Fix the diff issues, reduce road noise from tyres, fix the flakey electronics, etc, etc.

Make it a good car and people WILL but it.

And the FG II Falcon could have been a great car.

The FG X looks like being a sales embarrassment, I keep looking for them on the road, but I have only seen a couple in Sydney. The nose job has been a horror.

I have an FG XR6 5 speed auto, and I still thing it is a good drive despite its faults.

That’s my 10 cents, and I too regret the coming closure of the Australian car manufacturing industry.

Some good observations of the Commodore Peter. I feel the same way about VE and the A pillars and wheelarches were a real shock too. When I'd take my dad's VY into service long past its time as a new model, Holden techie's constantly told me the VY model was the best one they made - like VXII it had the last iron block V6's and was relatively simple and robust. If you also look at the sheer loadspace in the wagon (and ute tray for that matter), it's much bigger than in the bigger car that followed it. The auto was agricultural, but the motor relatively torquey and even smooth despite its reputation. Suspension in VY would see it cruise around urban areas, torquing languidly around roundabouts etc. It was quite relaxed and smooth to drive. Their recent saving grace has been the VEII and early VF motors that can chew E85 - perfect for an Australia that is closing oil refineries fast!

Edit: the Alloytec 6's did not have an entirely trouble free run and this probably has something to do with it. Coolant early on, slipping of timing chains after that. Here's to pushrods... or better still the Ford Intech SOHC and Barra DOHC inline 6!

[Trump]

Originally Posted by Sprintey

Despite all the FTAs every metric I see measuring global trade... is falling.

If we put ourselves in a falling AUD, end of commodity cycle, stalling global trade environment, it makes a LOT of sense to make things domestically.

1920's/30's all over again, rinse and repeat.

Multiply what happened in the 1930's by an order of magnitude and you'll have a rough idea of what Australia will be like post-2020 unless drastic action is taken to arrest the slide and restore sound money and sound high value manufacturing.

[Sprintey]

Originally Posted by Loud_Noises

Multiply what happened in the 1930's by an order of magnitude and you'll have a rough idea of what Australia will be like post-2020 unless drastic action is taken to arrest the slide and restore sound money and sound high value manufacturing.

Agree. Sadly neither of these are coming back until things get so dire that people actually take the time to learn and understand and take up using them. For this reason I always carry some old coinage of the Commonwealth and the Empire in my wallet, at least I know it is 92.5% of something valuable. Try paying for everyday items with it (not that you'd want to - Gresham's law) and people are incredibly confused. British airmen used to carry Sovereigns with them in case shot down over enemy lines they could perhaps barter their life. Later in the life of the 3rd Reich the Germans actually used Sovereigns as a store of value/medium of exchange. When the Suez crisis erupted in 1956, the Arabs demanded Sovereigns as payment so the British (and us) started minting them again after abandoning them in 1931. Crowns, Half Crowns, Shillings, sixpence, thripence (these in the Christmas pudding, 92.5% silver will keep the pudding from going off as of its antiseptic nature!), the original 1966 50c silver coin that the Japanese bought up and melted for it's 50% silver content as we foolishly put more than 50c worth of silver in it! - all the subject of another thread. But basically sound money. And today we're sliding toward stopping cash usage (with its attendant anonymity) of any kind... Proxy alternatives have also arrived...

I have manufacturing ability, on a modest scale. It's not being shipped overseas. Younger guys in my industry are extremely impressed with it, and want to be able to make things here, so there is some hope for the future.

We may not go down the very dire path - if you look at the path of the US, they have used EBT cards and basically printed currency to continue to fill them (raising debt ceilings, increasing UST borrowings in the meantime) and as they are the default global reserve they can get away with it. So instead of 1930's soup kitchens, it's been relatively civilised, the depression for mainstreet is going on at Walmart on payday. Maybe they'd do the same here?

[johnydep]

If you're worried about currency, you would be better off holding onto Gold.

If manufacturing is so important, answer me this: how could a manufacturing industry be sustainable for every country to have the same industry? Not at all, if we all did the same thing. We can't all build cars. It just wont work, even if we stopped all imports, we'd just build basic A-B vehicles that the populace could afford with their minimal income because our export industry is limited by other countries shutting us out.

Countries are businesses. If you shut one out, they'll shut you out.

Manufacturing is a business, it must be an economical business. If it relies on tax payer funding to stay afloat it becomes uneconomical. People are taxed higher which decreases their disposable income, and the product pricing is influenced by having no competition = high prices, low income.

If people want an industry to remain, they need to purchase the product and purchase it often.

Look at how Japan started their Auto industry - made cheap copies of other products, sold them cheap, made laws and increased taxes on older model cars, etc = force people to continually purchase new models & dispose of 3-5 year old models, so as to keep factories turning over at fast rates. High number = lower costs.

Our car manufacturing died for a number of reasons, one of the reasons is what most people have in their drive way = it wasn't a new local built product every 3-5 years.

We need new industry, there are many opportunities for Australia. The world is our oyster, we will prosper.

[vztrt]

Car manufacturing begins to close in one yr.

The car industry will still continue with design. Funny enough thats were the money is spent.

[Trump]

Originally Posted by Sprintey

Agree. Sadly neither of these are coming back until things get so dire that people actually take the time to learn and understand and take up using them. For this reason I always carry some old coinage of the Commonwealth and the Empire in my wallet, at least I know it is 92.5% of something valuable. Try paying for everyday items with it (not that you'd want to - Gresham's law) and people are incredibly confused. British airmen used to carry Sovereigns with them in case shot down over enemy lines they could perhaps barter their life. Later in the life of the 3rd Reich the Germans actually used Sovereigns as a store of value/medium of exchange. When the Suez crisis erupted in 1956, the Arabs demanded Sovereigns as payment so the British (and us) started minting them again after abandoning them in 1931. Crowns, Half Crowns, Shillings, sixpence, thripence (these in the Christmas pudding, 92.5% silver will keep the pudding from going off as of its antiseptic nature!), the original 1966 50c silver coin that the Japanese bought up and melted for it's 50% silver content as we foolishly put more than 50c worth of silver in it! - all the subject of another thread. But basically sound money. And today we're sliding toward stopping cash usage (with its attendant anonymity) of any kind... Proxy alternatives have also arrived...

I have manufacturing ability, on a modest scale. It's not being shipped overseas. Younger guys in my industry are extremely impressed with it, and want to be able to make things here, so there is some hope for the future.

We may not go down the very dire path - if you look at the path of the US, they have used EBT cards and basically printed currency to continue to fill them (raising debt ceilings, increasing UST borrowings in the meantime) and as they are the default global reserve they can get away with it. So instead of 1930's soup kitchens, it's been relatively civilised, the depression for mainstreet is going on at Walmart on payday. Maybe they'd do the same here?

You've written a well worded piece Sprintey. And I thought I was the only one that keeps a couple of pre-1945 florins and a crown in my pocket

Originally Posted by vztrt

Car manufacturing begins to close in one yr.

The car industry will still continue with design. Funny enough thats were the money is spent.

Maybe for the next cycle or two, but once the Indian and Chinese engineering divisions come online with a comparable skillset and experience as the Australian team, its goodbye Charlie.

[vztrt]

Originally Posted by Loud_Noises

Maybe for the next cycle or two, but once the Indian and Chinese engineering divisions come online with a comparable skillset and experience as the Australian team, its goodbye Charlie.

By that thinking the outcome was going to be inevitable. Ford will chase the money....it doesn't mean cheaper wages. China already do the engineering for Ford. They cost the same as Australia.

[Sprint]

I worked at Holdens and I also worked in the export area, we were sending 2.6 commodores to china, we was building the Monaro Pontiac for America(which was nice to drive).

Soon after the Monaro contract went to mexico because it obviously cheaper to make on corn chips, they basically stole our Monaro, our designs and shipped it somewhere else.

[Joe5619]

Sad that these decisions were made when the dollar as at 1.00. I wonder if we might have had a different outcome at today's value of 0.73. I always thought the government’s level of support should have been a moving target linked to the AUD rate.


All too late now. Let’s just hope as many as possible of the 2nd & 3rd terr companies can continue on in some form.

[Wretched]

Originally Posted by Joe5619

Sad that these decisions were made when the dollar as at 1.00. I wonder if we might have had a different outcome at today's value of 0.73. I always thought the government’s level of support should have been a moving target linked to the AUD rate.


All too late now. Let’s just hope as many as possible of the 2nd & 3rd terr companies can continue on in some form.

That would have been one of many factors that influenced the end of car making here.

It was a perfect storm of government policy, poor management direction, substandard product planning (the I6 as good as it was should have been ditched as planned for the V6 making it suitable for other applications), QC and a very small market.