Ford has got the go-ahead to maintain production of its 6 cylinder 4 litre engines until 2015 at their Geelong plant which was due to be closed, with the loss of up to 600 jobs.
http://www.geelongadvertiser.com.au/article/2008/11/21/32635_news.html

So this is where Rudd’s auto-industry money is going….into propping up dinosaurs!

What’s wrong with gearing this plant to the production of 1 and 1.5 litre engines, and thus much smaller, cheaper and more efficient vehicles… and doing away with the big gas-guzzlers? It might take a while…but there seems to be no hint of a move in this direction.

Improvements in efficiency are being mooted, but only with the premise that the larger engines will remain.

Alright, so the plant will remain in operation and the jobs will be saved. There’s a great deal of merit in that. But surely it could have been achieved without the lock-in of outdated fossil fuel inefficiencies….which fly in the face of Rudd’s apparent strong conviction to address climate change.

Come on! Surely we can do better than this!

Dear Ludwig,

It is good that 600 jobs have been saved
at the Geelong plant. Which means in
today's global economic situation they
will continue to manufacture the cars
mentioned.

This will give them time to re-structure
the factory to the manufacture of more
economic vehicles. If the plant would have
been closed, six hundred jobs would have
been lost, which would have been disastrous
for the Geelong area.

So, it is better to wait and give them time
to adjust in better economic times.

I agree Foxy that the most urgent thing is to save the plant. Then of course some profound restructuring should be demanded, as it becomes feasible within the changing economic climate….or with very substantial government financial assistance.

But it seems that Rudd and his cronies aren’t really interested in this second step. There is no indication that this plant will be required to significantly restructure its operations in line with Rudd’s climate change policy.

Incompetence is all around.
When it was decided that lead compounds in petrol were causing health problems was the time for government car fleets to be electric.
Instead it was compulsory catalytic converters on all new cars to delay the needed change.
From the beginning the car industry and government controllers have got it wrong.
From the very start petrol engines were made inefficient by the controlling of engine power with an intake throttle.
Mistake after mistake up to now.
Our leaders do not understand and seem unable to learn.

Dear Ludwig,

Things take time. They can't do it
if they can't afford it. First things
first.

Save the plant, the jobs, and then
let's see what happens.

Ludwig,
While I share your concern Foxy does have a point. Do you have any idea how much capital is needed in both Ford and their suppliers to change from big 6's to efficient 4's Retooling would be in the $100's of millions for Ford alone then comes non productive set up etc. there is usually about 5year lead time. That is assuming they have the money which Given Detroit's problems I doubt it.

I still stand on my mental machinations about having smaller companies making many different cars rather than what you rightly call dinosaurs. By analogy do we really need to put all that capital in juggernauts with all their limitations? I wonder if any perceived bulk buy efficiency in car monoliths is real or imagined (theoretical alone)? Consider flexibility and all our eggs in limited baskets? Do we want cheap inefficient cars or do we want jobs and a future? What do you think? I'd be interested to read your thoughts.

I dont know if any of this means anything, but the vision portrayed by Johns Revelation...the last book of the New Testament... somewhat tells the story.
What it tells me, just one small christian, is that mankind (those who would destroy the earth for the greed) would not co-operate with mankind (those who would save the earth)...and at the end God Got disgusted that He allowed the period christians call the Tribulation.

Between now and that day I dont expect governments to agree on global warming and to save the forests.

I expect big business and wayward, persecuting governments like China to go on manipulating for their own ends.

There was no reason, other than big business manipulating for money, that we couldnt have played our part and opted to let the "dinosaur" go and built small engines/ electric cars etc.

As for jobs lost...Hah!
Governments can always find work for the unemployed if they want too. The Great Divinding Range needs to be replanted.
A million k's of roads need to be repaired. Other industries could be founded.
Be good to see the churches take on the greed in prayer. Maybe they too cant agree?

I'm with Ludwig. Anyone thinking that 4 litre cars will sell in 2012 is gambling, but in 2015 is a fool. The recent price spike in petrol was caused by increasing demand hitting a flat supply. We simply can't produce any more oil. The current global recession took the heat out of demand, so petrol prices have dropped. Some time between now and 2012 we hit the wrong side of the "peak oil" curve and supply will start dropping. Nothing will stop a relentless rise from there on.

4 litre engines are dinosaurs. They will die, regardless of government assistance. To put the assistance into perspective, look at what has happened in the US. At the start of November GM has $16 billion in cash. They expect to run out of cash in January. Why? The bottom dropped out of SUV's, yet up until September GM was planning to produce even more SUV's to try and save themselves.

Anyway, to keep GM going so they can retool would require $8 billion per month. Not even the US government can afford that for the time it would take to do the job. If Ford in Australia plans to be building 4 litre 6's in 2015 they face the same fate. The only solution is to get out of big engine car's, and to do so as quickly as possible. Anything subsidy that does not positively encourage a move in that direction is a waste of taxpayers money. A subsidy that encourages building them for another 7 years is madness.

Unfortantly, we could pump money into the two big US auto makers in Oz, only to have the American holding companies collapse.

Chiefly didn't launch an Australian car in car in 1948, he launched an Australian financed car built by the Holden Body Building Company. Instead of repeating this mistake, maybe we need to produce our car like the Malaysians (Proton), with Government taking (temporarily) the same course as Airbus. Under the Us-Australia Free trade agreement we could aim for the US market. Alternatively, if their are too many manufacturers, out there, let the market take its course.

Please stop kidding yourselves folks. Ford europe has the Focus, & the Mondeo, going great guns, & it's not stemming the financial tide. Then there's Mazda, roaring along in light & small, but it's not enough.

With those cars on the books, why would they waste money designing anything like you want, just for Oz. They could not build any of these existing cars in Oz, profitably. The Falcon only worked, as with the Commodore, because we wanted a unique type of car.

Well that's all over, we are being forced to lower our sights, to the type of rubbish the rest of the world is getting.

Make no mistake about it, Ford doesn't have 6 or 700,000,000 to waste on an Oz car. Ford will go, when the current falcons are finished, unless, like GM, they develop an export market for this type of car.

The Holden Commodore is still doing OK, but only just. There is unlikely to be a loose Billion for another, after this one. There is no chance of an Oz small car with MG here, either. With Opel, Vazhaul, Daewoo, & Suzuki in house, What would be the point.

Once we had CKD, [completely knocked down] assembly of imported components, but now it's so cheep, with roll on, roll off shipping, for complete cars, that's no longer an option.

Much as I hate the idea, I believe in 10, or 15 years, we will have the same car industry as the UK. None.

What price tariff protection now?

Examinator, I agree that a major adaptation from 4 to l.5 litre engines and entirely new vehicles to go with them would not be quick or cheap. But my main point is that there just seems to be no intention of heading that sort of direction.

For everyone concerned to apparently be happy with 6 cylinder engines and to just tinker around the edges with efficiency is nowhere near good enough. In fact it is perilously close to just propping up business as usual.... until it collapses, or until it requires another huge injection of funds....and then collapses.

And besides, do you think vehicles with 4 litre engines are going to sell in a couple more years when the price of oil skyrockets again?

Examinator “Do you have any idea how much capital is needed in both Ford and their suppliers to change from big 6's to efficient 4's Retooling would be in the $100's of millions for Ford alone then comes non productive set up etc. there is usually about 5year lead time. That is assuming they have the money which Given Detroit's problems I doubt it.”

So what!

That is either no excuse or it is the sort of excuse which I would only expect from someone with a vested interest in dinosaurs.

It is the same sort of excuse which people use when they think that government can fix problems.

Every year, every car maker in USA and most elsewhere go through a strategic planning process.

In those cycles issues regarding product replacement, the direction of R&D, changes and influences on the business environment, investment plans, positioning in different markets and geographies etc. are reviewed, collated and “strategies” to benefit from or minimize the consequences of those influences developed. This process cover a period of at least 5 years, often longer. These companies employ high priced specialists to manage this process, because of its consequence on directing multi-billion dollar enterprises. Ford and GM should know exactly when they will replace different vehicle features and how that will influence their market position.

The issue of oil price and supply instability has been with us for 30 years.

Any Car maker who has ignored that business influence deserves to die.

If these dinosaurs cannot develop their way through the 21st century, whilst their Japanese competitors seem to be dealing decisively in the same environment, then they deserve extinction and unfortunately, them who have jobs with dinosaurs is no different to having hitched their buggies to dead horse.

In UK in 1970’s “Saving Jobs” regardless of the consequences brought the UK economy to its knees.. “Saving Jobs” is like building up the banks of the Yangtze.

Creating real jobs from real work in businesses dealing properly with the realities of their commercial environment is what is needed and is an entirely different process.

Ludwig,
I agree with your assessment and no I don’t think 4ltr 6s should be built for a myriad of reasons least of which is the cost of fuel.
As I see it the world has a number of problems the demise of the dino3 is but one example.
The problem with putting pressure on Ford or GM to spend money they don’t have to belatedly start building the vehicles that that they clearly should would only result in the Detroit (who have problems of orders of magnitude larger) to close up and go home…one less problem.

Our immediate issue here is to develop a plan ‘B’. What do we do if they crash?
• Should we temporarily nationalize and make and design little cars for Aus? Joint venture, manufacture unde licenceetc.
• Should we break it up into a boutique car industry?
• A new industry?
Either way we and the world has a problem what do we do if all these unemployed hitting the market and social security at once? It would be foolish to think that there won’t be other dinos who will suffer if not crash as a consequence of the dino3’s demise. Where/who is holding all that debt?
In the context of the financial melt down with an estimated $600 trillion in derivatives out there and an est. World GDP of $55 trillion per year (Fora) their crash would arguably be a catastrophe of Biblical proportions.
Industry policy should se such that no one sector be so vulnerable to one or two companies. Hence I reason that unlimited Corporate growth is merely the vector for the economic equivelent of the first law of thermodynamics.

Col Rouge,
Thank you for your comment.
I am well aware of the R&D cycle.
The theory that the dino 3 deserve to die is fine but in practice and at this time ?
Your comments are behind the 8 ball as the issues you raise has beendealt with elsewhere on OLO bringing you up to speed in 350 words isn't possible, thanks anyway.

It seems to me that the government and the car companies are on the horns of a dilemma.
They need to change over to smaller cars yesterday but the tooling time
is so long that they have to keep making the large cars for too long.
They could shut down tomorrow but the government will get a bill for
the dole. There must be a balance point somewhere where they close
down in the next two or three years and the government picks up the
cost of the unemployment. A typical spreadsheet problem for the
government. Minimise government cost and get the car companies onto
small car quicker.

Examinator “Your comments are behind the 8 ball as the issues you raise has beendealt with elsewhere on OLO bringing you up to speed in 350 words isn't possible, thanks anyway.”

You sound very much as if you are right “up yourself”, I suggest you adopt a different personality.

Re “I still stand on my mental machinations about having smaller companies making many different cars rather than what you rightly call dinosaurs.”

Let us look at car manufacture… a few major assemblers… hundreds of small component manufacturers,

that is the “commercial model” which is common around the world.

It seems to me we have already many smaller companies making bits of cars and a few designing, testing and assembling them.

Talking of those component manufacturers, if I was working for one I would have been looking at diversification away from motor vehicles back to the day the car makers started to leverage their purchase pricing to reduce the cost of supply by making arbitrary demands on suppliers for cost improvements. But that’s me, the writing was on the wall over a decade ago and yet, no one does anything “strategically” but just demands handouts from government and we have a government too eager to hand them tax payers money, instead of allowing the tax payers to support the car maker of their choice.

Has been “Much as I hate the idea, I believe in 10, or 15 years, we will have the same car industry as the UK. None.”

Nissan Micra, manufactured at Tyne and Wear UK…

I would suggest, It is not simply cars but the quality and attitudes of the management who invest for the future and the way they manage not just the present business but the long term. I agreed with your comments to UK motors and Leyland on another thread.

It seems the problems of European and American Makers have been more effectively dealt with by Asian makers… facing the same market conditions, I wonder HOW?

I am very glad that the cloud 9 group on OLO posters have previously dealt with the problems of the auto industry. It's a pity they did not tell the industry. I wonder if they have heard of Leyland, or perhaps Mitsubishi. It seems unlikely, or they would not be oposting such rubbish.

If only the road to hell, could be paved with good intentions. Wishfull thinking just won't work in the real world, kids.

Of course, with our mate Rudd throwing money everywhere, if the car industry just stands up, surely enough will land on them to provide good redundancy payments.

It should be possible to devise some plan under which Ford will receive funding subject to compliance with performance indicators , such as :

[ a ] $ x million to retool in order to produce more efficient vehicles , retooling to be completed by a specified date , until which date Ford may continue to produce not more than a specified number of dinosaur vehicles ;

[ b ] dinosaurs to cease being produced by a specified date ;

[c ] Ford to receive a further $ y million by a later date to produce the more efficient vehicles ;

[ d ] Funding to cease completely by a later date . If Ford cannot survive with the more efficient vehicles , no more funding should be provided , any final funding then being used for redundancy and retraining .

Jaylex “It should be possible to devise some plan under which Ford will receive funding subject to compliance with performance indicators , such as “

Alternatively, the money, expropriated from taxpayers, if it were left in tax payers pockets would allow those tax payers and purchasers of motor vehicles to fund the car industry directly through the process of buying the motor vehicle of their choice and not the one dictated by the flunkies who stalk the halls of government.

As for “compliance with performance measures”
A growing sales revenue, profit line and positive cash flow are the BEST “performance measures” any company can aspire to.

Of course, to get them you need to be doing something positive in other areas, like innovating, responding to customer expectations, assessing and addressing risks and opportunities within your business environment etc…

I have to question what sort of business managers allow their wealth and income producing resources to be laid waste by poor planning and question the merit of giving them handouts of any sort.

Most importantly, when the product consumer interacts directly, on an arms length basis with product suppliers, the outcomes are more likely to be in the best interest of both parties.

And none of that needs or really benefits from handouts and grand gestures from governments, playing lady bountiful with tax payers money.

Col
Noted.
I’m sorry that I offended you. You were walking into a discussion that had floated between various topics and different people. To stop and explain the state of play given your social Darwinist views and proclivity for ad hominem insults. A style of argument I don’t follow with fellow posters unless unnecessarily attacked I considered it diplomatic to end it there.
Your response was true to form. Neither is this the time nor the place for such personal character assassinations.

Back to the topic
Yes I’m aware of information you posted. Just because I don't agree with you doesn't mean I'm dumb or ill informed.
Apart from style our differences boil down to
• I disagree with your view that people have no intrinsic value beyond either a vector of consumption or unit of labour to support the system.
• I disagree with your view that corporate capitalism as it’s practice now is necessarily the best way.
• I challenge all assumptions you don’t
• You believe the market will solve all issues I don’t as in the case of the dino3’s probable demise it will be a case of the cure worse than the disease.
• Finally you believe only the strong deserve to inherit the earth. (social Darwinism) I don’t.
NB I don’t believe the total destruction of capitalism is the answer either.The discussion was about plan 'b'.

Hasbeen, I’m not quite sure what to make of your post. Could you clarify your position please. Thanks.