Yeah, Australia is going great.

We must lead by example, as Mirebella said today in regard to free trade, and we can rely on fast broadband in the future, as Leigh said the other day.

With leaders like that, we can all watch as Aust slowly erodes away given our agricultural sector is also in decline.

Oh, we have services and mining. What a joke.

The late Bert Kelly, a South Australian Federal MP championed free trade in the 1970s.
Few people realise how much excellent work initiated by the Chifley Government was undone by the efforts and consequences of Bert Kelly. Chifley, as WW2 was drawing to a close, knew that employment and security providing industries were essential for Australia. His government could see that manufacturing industries are essential for both purposes and as a consequence motor vehicle and home-ware industries were helped to get underway. Australia became virtually self sufficient in white goods (refrigerators and washing machines etc), the hardware for home and factory construction, fabrication and automobile and truck manufacture and assembly.

As a consequence, the demand for steel, bricks, cement, plasterboard, fasteners, and all sorts of products, expanded and generated full employment for returned service people and made sure that the pre-war depression did not return. The Modest Member wrote many articles for the AFR advocating that local production of shoes and clothing was not competitive and that it would be cheaper to reduce the tariffs, import those needs, and pay the displaced workers their wages to stay at home.

The problem with that argument is that in a country with a high standard of living, and an a propensity for income justice, any competition is impossible where the imports are produced either under slave wage conditions or where the overseas manufacturers enjoy the advantages of market scale and are prepared to adopt dumping or mechanist policies and many are. It should be obvious to everyone that without a vehicle, whitegoods and fabricating industry we will soon have no steel industry and our trade deficit will be even worse.

The government of this country has an obligation to see that essential industries continue in this country and I see the steel industry and its support customers as essential. I have noted that soon we will not be able to produce any part of the defence services' needs. We may soon have no oil refining industry. What a pity we privatised Commonwealth Oil Refineries.
(continued)

(Continuing from earlier comment)
Our mining industry has being expanded to the point where the market is, or soon will be, oversupplied and then the return on those exports will fall.

The Rudd and Gillard Governments attitude to that industry was correct in trying to obtain a reasonable return for the capital value of those resources. Their mistake was to aim to spend those assets on current consumption rather than to obtain ownership of overseas assets as replacements.

Norway has shown the way in that regard; they have used the value of their depleting oil reserves to establish a capital fund with a portfolio of shareholdings in productive companies outside of Norway.

We need to curtail further expansion of the mining industry, tax that industry to establish a Norway style fund, and recreate our manufacturing base with adequate protection where world's best practice is achievable

Total shocker which will have a knock on effect right through manufacturing. 1000s of people work in the automotive supply chain and they don't only make car parts. In SA the economy is so depressed and undiversified that if Holden's went down, it would take about one quarter of the states manufacturing sector with it. Suppliers need to get out now and hunt for overseas markets and retool their plants. Easier said than done.

I have to agree with Bob Katter on this one.

It makes no sense at all for government to give large grants to ford & Holden, to try to keep them manufacturing, & then go buy imported vehicles.

A huge part of Ford & Holden sales were federal, state & local government fleet purchases. Almost a half of all Commodores produced went to one level of government or another, before filtering down to the general public. Ford had similar numbers of Falcons move this way.

This made a large number of slightly used, very well serviced excellent cars available to the public, at prices they could afford.

This market is now filled with smaller imported hatches, much less car for the same money.

Government did not help, with misguided rules on towing, designed by poorly informed public servants, forcing many into large 4WDs to suit their horsing & boating interests.

Add the trend for women to move to large 4WD wagons because they feel safer in them, & the factors of a market collapse is in place.

Rather than handouts, a government return to purchasing locally built cars would be a much more practical solution.

We've ploughed billions into our car manufacturing industry.
And Foyle is quite correct, in his comments about previous Govt pro-manufacture policy, which introduced a period of unprecedented post war prosperity, that saw us become the third wealthiest nation on the planet, and a creditor one at that.
Then the dilettantish got into office, preferred services, which which they were slightly familiar?
As a policy for winding back union power, it was at least partially successful.
However, the unions also got into services, as massive industry superannuation fund managers.
We can sit on our hands and endlessly critique ford for not putting a diesel engine in the territory from day one, or not building the focus here, thereby sewing up a large export market, and economies of scale, that may well have seen them expanding production instead of planning to close, and take all the automation, we essentially paid for with them.
And this announcement coming just as the dollar starts to fall?
Or we can resume the property, and infrastructure at fair market prices, and set the thing up as an employee cooperative.
I'll guarantee an employee co-op, will be a lot more efficient and cost less to run.
After that, we need to build something the rest of the world will queue to buy!
For my money that something is a carbon bodied, electric car/station wagon/utility. Powered by A CNG consuming fuel cell.
This particular combination will allow the production of larger cars that more than compete for range, economy, torque and power with anything currently on the market!
Moreover, with far fewer moving parts, and electric, (in the wheel) propulsion, far less maintainence costs.
And carbon fibre, will be still doing duty, when all the other steel bodied conventional variants, are rusting in scrap yards!
Rhrosty.

Its extremely doubtful if Australian car building industries could ever operate without a combination of significant exports & massive gubmunt subsidies, simply because the quantities are miniscule in real world terms. Other than the odd niche market, exports are unlikely to set the world on fire because who else wants to purchase dinosaurs ?? We could capture the market for long distance capable battery-electric cars (no Martha, I don't mean hybrids) although it would be an exercise to convince petrol-headed bogans they should embrace the 21st century. Regardless of all the crap flying about peak oil / lack of agricultural land for ethanol/ AGM / carbon tax / etc, SOMEONE is going to sell an awful lot of battery-electric vehicle technology in the forseeable future, certainly a whole lot more in dollar terms than Falcadores. We probably have most if not all the raw materials, we have no shortage of labour (albeit horribly expensive), and we'd have no problem renting / stealing / hiring / buying / inventing any technological requirements. Clearly we lack any semblance of intelligent life at political level, that being the stumbling block unless Big Clive gets up.

Has anyone looked at the local product designed and built here in Australia? I have via looking for a new car 2 years ago and in renting cars when interstate. The common factor across both experiences is the locally designed and built cars just don't cut the mustard. The design, the fit out and quality of finish just isn't there in the holdens and fords compared to what is available from other makers. Especially when the locals charge for every extra they can and the imported cars come as a complete all inclusive package with little extra to be added.

Yes I agree that Australia needs a manufacturing industry. We have no future as a service economy. But any industry needs to be world competitive to justify its existance and there I suspect is the problem with head office (overseas) not wanting a competitive local industry.

Oh and it can be done in a first world country. Just look where the luxury cars come from and the muscle cars. It can be done. But it needs leaders (in business and politics) that Australia sadly lacks

DKit

I have long believed that the best way for any local manufacturer to stay put, is for governments to give incentives for locals to buy locally built products, like cars.

Imagine if, instead of pouring billions into these companies, governments subsidized the purchase of a local car, then, also provided a discount fuel card, which could be used in conjunction with other discount vouchers, and these gov discounts would be credited to the providers by gov.

This discount card can only be used for that car and can be transferred when then car is on sold.

After all said and done, selling cars is the best way for this industry to stay afloat.

Funding must not be by way of handouts.

It's like the old saying, you give a man a fish and He'l eat that night, teach him how to fish and he will eat forever.

As for Bob Katter,, i like him, however, as a member at one point I was offered a free T shirt for attending a meeting.

I asked if that was an Australian made shirt, and you guessed it, no reply.

I remember reading articles last year regarding foreign manufacturers (including Ford) trying to sell electric cars in China being faced with conditions that effectively meant them transferring the intellectual property behind the design and manufacture of their technology to Chinese firms. At least one of the manufacturers (Renault-Datsun)baulked at this but I wonder how long it will be before more Chinese cars enter our market equipped with this "transferred" technology. (A bit like solar cells and wind turbines.)

Put simply the automotive industry is not a level playing field. Countries like Germany protect their industry to try to stop their intellectual property being stolen by competitors.

Australia is simply not competitive any more. To produce a car here, it costs twice what it does in Europe. We load up our industries with the carbon tax, bells and whistles employment conditions, 12% super and all the rest. As a well informed commentator pointed out, we are becoming the France of Asia and its not sustainable. So we need to learn the hard way, as people don't want to think about easier ways.

Australian taxpayers and motorists have already wasted billions of dollars propping up this industry. It's time to let it die.

I don't always agree with Graham Richardson, but on this issue I think he is spot on:

http://www.theaustralian.com.au/opinion/columnists/car-industry-going-the-way-of-the-dodo/story-fnfenwor-1226649501559

This is not just about car manufacture, it is manufacturing in general.

I clearly remember Whitlam saying, "Tarriffs don't protect jobs, they only protect profits". then cut tarriffs by some gigantic ammount. He started something that all governments have followed since, while our manufacturing failed or went off shore.

Today I am not sure how one can protect our industry, but look around the supermarkets and see just how little Aus made products there are.

We have allowed our own industry to fall by the wayside and import most consumerables which are rubbish.

yeah, let the car industry go, then let the spin off manufacturing sector go, then agriculture.

We can then celebrate by letting all the rich Chinese come and live here and set up shop for the Chinese masses to come visit us, fast broadband which will make it even easier to consume foreign services and products, gambling, lots of international students, and our barbaric live cattle trade.

Good one.

Chris

The economics are just stacked up too much against the Australian car industry. Even when it was subsidised and protected to the tune of thousands of dollars per car and tens of thousands per job, every year, it failed to make a profit more often than not. And conditions have shifted steadily against it. Not many people want to drive large gas-guzzlers like the Falcon and Commodore any more, and fleet buyers are also turning away from larger cars. The exchange rate has been

There will be economic hardship and tough adjustment as a result of this decision, and that’s regrettable. But if Australia wants a thriving manufacturing industry, it should focus on things it can do well and competitively, not try to sustain industries that are never going to be economically sustainable.

Forcing people to drive cars they do not want, or to pay for other people to drive cars they do not want, does not make the community better off.

Rhian, yes your points are relevant.

However, each time something goes wrong, many point to new areas where we can do well, but I am not sure there are many sectors we can look to prove our productive prowess. In other words, I feel our production-consumption balance will get worse based on recent trends.

I just wish someone would point out why Australia has nothing to fear from recent trends. Someone who can really provide the data to help quash my fears.

I asked someone from the IPA which industries will go well after further recommendations for govt to get out of the way, and that person did not know.

I don't think you're right there Rhian. I think there are very large numbers who would prefer a larger car, but are worried about fuel costs.

Obviously there are many women who prefer large cars. Just look at any school pick up zone, & check out the number of large & 4WD wagons.

I was waiting for someone on a road just south of Brisbane in acreage land a couple of weeks ago, & noticed the range of vehicles passing. When I counted them, of every 10 vehicles, one was a truck, one was a car, 2 were work utes/vans, & 6 were 4WD wagons or pretty crew cab 4WD utes.

Perhaps GM & Ford should have got into the 4WD market properly, rather than the half hearted way they have, & built them here.

I have personally seen Qld Govt cars utterly wrecked in just a year & the shipped south at a cost of $1000 to be auctioned for $500 or less for spares. That's the sort of economic sense I hope the Newman mob won't continue.
All our fleet cares are Toyota or Mitsushiti, not a single australian built one. All our Govt appointed consultants are from NZ ? Federal Govt building hired from the NZ Co. All perfectly reasonable economic management , NOT !

Here here Yabby, these unions, forever pushing for better wages and conditions just don't get it.

Super is a prime example, as the only reason government wants to increase it, is so they can shift the responsibility of retirement to the employer, as the trade off of wage increases, in leu of super is no longer the case.

Just increasing wages and conditions can no longer be justified just by increased prices.

Productivity must be the driving force.

If our costs don't come down, we WILL pay for it, big time.

This ford closure has the potential to become a cancer within the entire manufacturing industry, and all we can do is throw money at it and watch it fail.

Just wait until coal mining ceases to be profitable, could happen within a year or two, we will then have real issues to be concerned with, especially if the boats are not stopped.

Yep rehctub, it is an interesting comparison, with Oz government funded benefits.

The reason the big 3 US auto makers went broke was welfare. They had given their employees not only great working conditions & pay, but retirement benefits way beyond the norm. Their workers had health care for life, through to death, a very expensively welfare cost.

This was fine while they competed against only each other.

First imports from companies without these costs started to hurt them, then those manufacturers set up to manufacture in the US, but did not give the same conditions, & did not have a huge retired ex workforce receiving those benefits.

We have done something similar in our mining industry. A mate of mine, a personnel [in the old terminology] manager with a large miner once told me that people deserved the huge wages to live in such sh*thouse places.

He now admits their mistake. Giving in to all union demands, no matter how frivolous, when the cash was rolling in. Now they find people will work in much worse places, in Africa & South America for much less money, & their labour costs are much too high.

Add a government that thinks their a golden egg laying goose, & greenies & crazy regulations, & we are about to see our last profitable industry shrivel on the vine.

Might be a good idea to keep the car industry. In the near future we just might need the foreign exchange saved on imported cars to help buy food, & they just might be the last employer, apart from government, left in the country.

We could once again build a large car in Oz, but it would need to be made from moulded carbon fibre.
We lead the world in moulded carbon fibre production, and it's a lead that could sew up a very large global market and economies of scale, that would more than turbo-charge local high tech manufacture.
Those same economies of scale would allow a locally invented NG powered ceramic fuel cell, to replace conventional combustion engines.
There are no moving parts to wear out in the fuel cell.
And, the exhaust is mostly water vapour.
A 72% energy coefficient, would make this particular combination the most economical energy efficient vehicle in the world!
With the best acceleration rate and the lowest centre of gravity; and, not subject to the usual corrosion of steel bodied vehicles.
Some extra capacity could be installed if towing were contemplated, and power piped into the towed vehicle?
Which could have electric regenerative motors added to all wheels.
This way the tow vehicle would more or less simply guide/steer the towed vehicle(s), and not be held up by hills or muddy roads!
Ditto B doubles and road trains!
Moreover, with a reasonable inboard power source, this combination could stop and camp virtually anywhere, with the pristine water produced by the fuel cell exhaust, adding to the drinking water availability.
The only limitations, inboard grey/black water tanks storage capacity!
Also, the water cooled ceramic fuel cell would provide all the (free) hot water needed!
Very rapid rail would be possible, with inboard ceramic cells and CNG, without the extremely expensive wiring roll-out, that literally wastes around 50% of the power supply, virtue of transmission line losses.
Ditto light rail, mono rail, trams, trolley buses, and other more conventional transport options!
Rhrosty.

Rehctub, a lot of the coal mines are already losing money. That is why Rio for instance, has put a number of its coal mines on the market. More Americans are using their cheap gas, so they are selling surplus coal into our markets, depressing prices. Now gold has dropped to little more than the cost of production and iron ore will drop, once all these extra mines come on stream. Our current account is still running at a monthly deficit, so we are just borrowing more money to stay afloat.

The Ford workers will be paid up to two years wages as termination payments, forced on them by the unions. With cushy deals like that expected, why would anyone invest in Australian manufacturing

Chris,
I’m not surprised someone from the IPA did not identify which industries would thrive without government intervention. The whole point, from their perspective, is that no single individual or government bureaucrat can know what will work and what won’t. Competition and innovation will give us answers we can’t even imagine.

Hasbeen,
I don’t disagree that some people are buying smaller cars because of fuel costs, but unless you want to pay subsidies for fuel as well as cars, then that’s a rational choice. If money and fuel costs were no object, I’d prefer to drive a Porsche; but I don’t

Ford? Ask any Ford dealer. Ford consistently refused to take any notice of customer feedback from dealers. Ford relied on advertising spin to sell cars it wanted to make (better profit) and didn't care squat about word-of-mouth advertising.

We bought Falcons for years as the home shopping trolley and transport for the juniour sports players. But eventually a Toyota replaced the Falcon with its heavy doors, poor seats, over-large blind spot in the front R quarter obscuring the driver's view (the supporting pillar got larger to support the idiotic low sweep of the windscreen from the Taurus), hump under the back seat that made the fifth seating position agony even for pre-adolescents and noisy differential.

Arrogant, uncaring Ford management had to fight hard and long to lose the customers loyal to that straight six and reasonable drive train. Ford shareholders need to take some credit too for continually allowing massive salary packages and bonuses for rather average CEOs and senior managers. Quite obviously top $$ doesn't ensure top quslity management. But then the big money and benefits paid to Australia's federal politicians proves that too.

....We lead the world in moulded carbon fibre production

Rhosty, is that 'manufacturing' or 'development' as there is a huge difference.

I remember talking to a guy who ran the floor at TJM, a 4x4 accessory place in out Brisbane.

He said they once had 60 on the floor working flat out to meet demand.

Now, theynhave just TWO, they design and perfect a prototype then have them manufactured in China.

There are also some boat builders that have done just that. Knoble being one such case, as to manufacture here, in outer Brisbane, became finacially unviable.

As for your engine suggestion, most good ideas get bought out and shut down by the energy sector.

If they don't, where do you propose the replacement jobs will come from?

Rhian, ....I’m not surprised someone from the IPA did not identify which industries would thrive without government intervention. The whole point, from their perspective, is that no single individual or government bureaucrat can know what will work and what won’t. Competition and innovation will give us answers we can’t even imagine.

I beg to differ, as many business people have to make life changing choices, or face loosing more than just their jobs.

Anyone who has run a successful business pretty much knew the last splash at the car industry was a waste of money. In fact, if you check my post history you will find I said exactly that.

Yabby, it's my understanding that the only viable coal mines we have are this who produce at least 40% coking coal, as thermal coal sells for less than production costs.

Once Mongolia and Russia come on line, our industry will likely fall.

So labor's answer is to tax them twice.

Real smart

Rhrosty you do realize that most early missionaries die a horrible death.

Those that follow do have some chance of survival, & those who come along later & pick up the pieces will do the best.

Any large manufacturer going into carbon fiber before much more is proven WILL go broke. Fuel cells ditto. You don't need very much in warranty claims to send you broke, & going off half cocked, into any new technology is bound to lead to bankruptcy.

We built & displayed a thermoplastic car back in the 60s. This was built by a division of Borg Warner, a very well known, & very experienced auto components company. We could not sort all the problems.

Collin Chapman of Lotus fame tried thermoset plastics too, in production. It worked for a small usage sports car, for a short life. It did cost them a great deal in warranty claims

GM & Nissan are loosing a fortune on their electric cars, even with huge subsidizes. At the present moment, getting rid of all the bull droppings & going back to an FJ Holden would be a better idea.

Rhian, even my V8 powered 330BHP convertible does not burn very much more fuel than my Ladies Mazda 2. It does the shopping run beautifully, & does not bore the tripe out of me. Those poor souls doing high mileage are probably stuck with a small box on wheels. Thank god I'm not one.

When I can't afford the fuel, I'll take a horse before I'll drive a volt or some such horror.

The de-industrialisation of Aust was planned back in 1968 with the beginnings of Agenda 21.

All the major parties including the Greens signed off of this program.Now they are attacking the farmers with water and land restrictions under the guise of saving mother Earth.It has been a littany of lies from the spectrum of terrorism, GFC and CO2 causing global warming. Just google Senator Ann Bressington one of our senators who at first was incredulus to this plan but now realises we don't have much time left.

If we don't wake up soon,we will be serfs to a corporate world that will make our lives a total misery.

Arjay - If we don't wake up soon,we will be serfs to a corporate world that will make our lives a total misery.

I have no doubt thats the intention, however the odds favour a major financial re-adjustment, most probably before the corporates realize their ambition, although its possible the corporate world could lurch on for a short time. Whatever, the untold avarice displayed by big-business will undoubtedly lead to its own undoing. Some of us, albeit precious few, 'woke up' years ago but convincing the sheeple there are more important things in life than footbrawl, thugby & Home and Away, is effectively impossible.

The Australian car industry has been a basket case for over forty years drawing ever growing government subsidies to keep it going. As has been pointed out the sales of Holden and Ford have been artificially inflated by Government diktat. If the supply of Government vehicles for MPs transport had been put out to tender they would all have been arriving at Parliament in Toyotas (probably one of the Lexus range) years ago. If the production capacity is low then find a niche market to exploit! You don't even have to be too inventive.

The Norwegian arms industry is a case in point, three billion dollars of exports last year alone. The main product, a remotely controlled 100 year old .5 inch machine gun which can be fitted to almost any Military vehicle.

In addition, Norway's Statoil is now a world wide exploration company, which in addition continues to find oil and gas in the Northern seas.

Jon R - In addition, Norway's Statoil is now a world wide exploration company, which in addition continues to find oil and gas in the Northern seas.

There are two major differences, firstly Norway isn't hamstrung by the utterly inept self-serving bloodsucking parasites endemic to the Australian political circus, and secondly the country isn't home to the most apathetic sheeple on planet earth. Maybe the lack of footbrawl, thugby & Home and Away helps.