Hi all

In the wake of car manufacturers leaving Australia , it is time for us to think on keeping manufacturing in Australia . The current Government policies are flawed and will make the situation worse . Here is a different view point http://www.india2australia.com/saving-the-australian-manufacturing-industries-the-failure-of-the-abbott-gang/
Would like to know whether it matters

Dear meetoo,

Welcome to the forum and thank you for your post.

I think a government with a modicum of vision would do something like take the $1.5 billion we have given the 'old style' car manufacturers in subsidies and offer it let's say as a rebate on electric cars designed and manufactured in Australia.

If only a thousand are produced in the first year so be it. Yes a tag of $1,500,000 subsidy per car would seem a tad excessive but this would quickly diminish as players and numbers increased. The world market for electric vehicles, especially performance models, is increasing dramatically and is the future.

Most importantly we currently have in place a well developed parts industry supporting the motor vehicle manufacturers, but obviously this will be decimated once the Yanks pull out. Things like springs, windows, lights, seats etc will be that much harder to source locally once they disappear.

The mantra of the Liberal government seems to be our wages are too high to compete with other countries therefore we have to let them cease production. This is rubbish. Germany builds twice as many cars as the US and pays its workers twice as much.
http://www.forbes.com/sites/frederickallen/2011/12/21/germany-builds-twice-as-many-cars-as-the-u-s-while-paying-its-auto-workers-twice-as-much/

Part of the crucial changes needed here is combating the enormous divide between the Unions and the bosses. This is an American style of doing things and should be a thing of the past. In Germany the unions often have a place on the boards of corporations. This would be an absolute anathema to our current government so it is unlikely to happen. But one of the conditions we could place on companies accessing our subsidies would be that they structure their businesses in this manner.

We could, through the head start we have of having a well formed parts industry, really drive a first class electric car industry that would prime us for export into the world of escalating fuel prices.

SR,
Inclined to agree.
SD

Yes welcome and a question that is confronting.
Asa former union official I know EBAs have taken the warfare out of some union management sit downs.
Unfortunately not the leftist one involved in most manufacturing.
However if we dropped wages by half over night it would make no impression on this industry.
Hang on yes it would removing the blame game, saying workers are the problem would leave over paid and creators of poor results, management exposed to an unwelcome truth.

What you need to remember is that in Germany people are trained & qualified in whatever they do therefore everything goes a lot smoother. They have a sober mentality on top of of it & believe in planning for the future instead of just tomorrow morning. Having a qualified workforce results in a more fairly & even distribution of wealth which is the main stabiliser in an economy.

Steel Redux, I would love to have an electric car.
I am possibly the only one here that has driven an electric car and I
drove two different ones, the Nissan Leaf and the Mitsubishi iMEV.

They are an absolute dream to drive, very high acceleration rate if
you need it, very smooth and very quiet.
However the people they suit are in a particular group such as myself.
One car owners;
Retirees who do very little long trips, mostly running around the city
such as Sydney.

Two car owners;
One member of the family who use the car every day to go to work.

Have a friend with the Mitsubishi who drives it to work every day
and is car of choice at weekends. Costs about $5 a week to drive to work.
For long trips they take his wife's car.

The catch; Electric cars are subject to GAR, the Great Australian Ripoff.
The Nissan Leaf sells in the US for just under $30,000.
The Nissan Leaf sells in the UK for just under $40,000.
The Nissan Leaf sells in the AU for just over $51,500.

So you can see why they do not sell here, the dealers are trying
everything to get rid of their demo cars.

Because of this history I cannot see electric cars being a goer until
some reality enters the market when petrol reaches over $3 a litre.

metoo, interesting article, bias, but interesting.

How do you propose the lowering of business costs will save manufacturing when we pay $20 per hour yet compete with $2 per hour?

As for the NBN, what's wrong with this who want x-fast BB paying for it, because unless the average punter wants to play faster games, or download porno's faster, what's it's real use?

Negative Gearing, if we remove the tax incentive for investors to invest, do you think they will keep investing. Because this means they will have to first earn their income and pay tax. They then need to pay interest, rates and charges etc with after tax dollars.

Now what do you think will happen to affordable housing once the investors leave the market? Where do you think the renters will go then?

One reason house prices increase is because investors sell houses. One reason they do this is to take a profit which they then reinvest, often in to two properties, both heavily geared. The end result is more rentals in the market. Removing NG places this at risk.

Think very carefully before removing NG because you may not like the end result.

As for saving manufacturing, all I can say to anyone is dream on!

Just a thought – why don’t we tell GM and Ford to just leave the plant and remove themselves back to the good old USA; after all we, the taxpayers, have paid for the plant over the years under all stripes of government; we take those plants in Vic & SA and create a new company to design and produce cars for Australia and export.
After the enterprise is up and running we float it on the ASX. This would not fit well with the current mob, but one can dream of better things

Because this means they will have to first earn their income and pay tax.
rehctub,
Yes it doesn't sound good if you put it that way. If you were to say that EVERYBODY earns their income first & then pay tax then we'd all be in the same game on a very level playing field. I can't wait for a flat tax system where everyone pays the same rate & if some get rich that means that they are smart operators and/or they provide what other people want. There's no more moral & fair system and, more importantly leaves no room for bleating discrimination. It would also curb a lot of polluting frivolous industries & value for money would become a reality. It's a win/win system. Imagine the improved mentality of a whole Nation.

Bazz,

I've driven a number of electric cars including a pre WW I Detroit and which is still going strong.
It's a stately carriage and very quiet and although I appreciate all the finer points of electric cars they have the great drawback that one can't carry spare fuel, so in much of Australia they would be a liability and one would need to carry a portable generator and sufficient petrol/diesel to run it.

Australia has lost almost all the white goods industry, almost all the rolling stock manufacturing industry and is about to lose the automotive industry.

People do not realise that these industries form the base load of the flat products part of the steel industry. If Bluescope at Port Kembla and Westernport close there is no way back. BHP Billiton did Australian shareholders no great favour when they floated off the steel industry, particularly with Billiton not obtaining control of its sources of raw materials.

The Chifley Government after WW2 realised that manufacturing was the key to keeping our balance of trade (Current Account) bearable.
Unless we have a policy for sustainable manufacture the Australian workforce will become the white coolies of Asia.

The current crop of politicians , particularly those in the federal ministry, are clueless when it comes to an Industry Policy.

The USA has started to realise that they need to bring manufacturing back to their homeland.

.....The USA has started to realise that they need to bring manufacturing back to their homeland.

So how do we achieve that Foyle?

SPC Ardmona it is in the spotlight right now.
Hockey and Abbott put it there.
For out this country,s history government of both colors have supported farming industry's, and rightly so.
Just think of all those growers and workers indeed the whole community fate if it follows Holden.
Australia is open for business, hollow words indeed .
And consider this with zero room for doubt Murdock and his apprentice Tony Abbott would be screaming about carbon tax and Labors dirty hands if he had lost the election.
A hollow man hollow words and extremely unlikely to not be replaced in his first term.
Looking forwards to the results of Murdock press scandal,his sins run much deeper than the ABC he has tasked the lad with destroying.

hose in the federal ministry, are clueless when it comes to an Industry Policy.
Foyle,
You mean the previous not the current. If you do mean the current then you're the one thayt's clueless.

It's not so much a "realising a need" thing, Foyle, more of a straightforward evolution.

>>The USA has started to realise that they need to bring manufacturing back to their homeland<<

When there was a trend towards offshoring, it was to take advantage of the lower unit cost of labour available in other countries. This was able to offset the increased costs within the value chain, such as shipment, scheduling, manufacturing flexibility etc. as well as the substantial management overheads it created.

Over time, the disparity in costs has slowly evaporated, as the target country's workers become more highly paid. The other costs remained fairly static, so the equation became increasingly less attractive. This has led to a steady flow of "re-shoring" actions, particularly in the US.

http://www.tutor2u.net/blog/index.php/business-studies/comments/onshoring-is-china-losing-its-competitiveness-as-a-low-cost-location-for-ma

It's a case of "what comes around, goes around". Personally, I'll be far happier (as a consumer) when the economics of the call centre industry hit the same tipping point.

Dear rehctub,

This process is called 're-shoring' and leaders like Britian's David Cameron are pushing hard to make it happen in their countries.

These are some quotes from his speech in Davos;

He pointed to an emerging trend – re-shoring – where some jobs that were once offshored are coming back, from East to West. “It’s time to bring the benefits of globalization home to ensure the benefits are felt by hard-working people in terms of security, stability and peace of mind,”

“There is a chance for Britain to become the re-shore nation. Europe needs to act now to seize the opportunities of re-shoring.”

Unfortunately for us we have a government who is intent on doing the exact opposite, seemingly determined to off-shore Australian jobs and let base market forces rule. Ideology gone mad.

Perhaps the better question is not can, but why would we want to save manufacturing in Australia.

Manufacturing, & construction are the home of the least educated, least competent, & most unionised of the Australian workforce.

They are the most left wing & militant of the Oz unions, & offer nothing but trouble & expense to the average citizen.

They are often paid twice the award rate of pay, which is about four times what they are worth.

Looked at objectively, by any standard, it is more problem than it is worth, & the subsidies from the long suffering taxpayer are just not worth supporting.

Let it die. It won't cost much more to keep the auto bludgers on the dole, than at GM or Ford, & who knows, some might even develop a work ethic, after a while with little money. Yes, I know, but one can hope.

Rehctub,
Some industries started moving back to the US when bunker fuel started
to get more expensive.
Bulky goods found that the cost of moving containers across the
Pacific got too expensive and the furniture and bar and sheet steel
went back to to the US. One of the reasons that bunker fuel got so dear
was because of all the diesel cars being sold which meant that the
refineries had to be reconfigured to produce more diesel.
The result was ships had to buy a mix of diesel and bunker fuel.

Wheels within wheels so to speak.

Is Mise,
Well you are right of course when looked at in our current situation.
However, as fuel gets dearer people will use trains and buses for longer trips.
This will all be part of the new energy regime.

Frankly, I do not see a solution to our manufacturing problem.
It is interesting how the German auto industry manages it but then
most of their market is just down the autobahn.

Tariffs are the only way I can see it going and anyway globalisation
is on its last legs.

Don't wait for politicians, they are simply not living in our world
and don't know, or don't want to know, what is going on.

http://www.theguardian.com/media/2014/jan/30/abc-faces-australia-network-loss
My previous post ended with a possible cause of our fading industry.
It questioned Abbott,s ability to lead this country.
And his party
The link be forewarned, if acted on will be such a big country wide protest, even Tony,s own team must, in time question what such a conservative man is doing leading a once Liberal party.
Murdock? history will confirm his robber press Baron status and looking back see this crime against free press for what it is .
Murdock,s own press is far more biased indeed vile than any other

I wonder if there are any figures on how many watch the Australia TV ?
Still $225 million is a lot of money and I think we can expect to see
a lot more "Holy Cows" go to the slaughter house.

YOU DON'T HAVE THE MONEY !

Murdock,s own press is far more biased indeed vile than any other
Belly,
Murdoch's an amateur in comparison to the ABC/SBS outfits.

And to think Bazz that we here in Australia are about to place ye another burden on our transport industry, the backbone of our entire nation, with a great big carbon tax.

As a nation we suffer from many problems other nations don't , Distance, small population in comparison to land mass and the highest basic wage rates.

Adding yet another expense to the transport industry is simply foolish.

I here the min wage has been increased in the US by a staggering 40%. that's gotta hurt!

Dear rehctub,

Come on mate, expand your mind out the the little mantra you have got going. Doom and gloom because the US wants to raise the minimum wage?

Ask yourself the question of why German auto workers not only get twice the wage of those in the US but also get 8 weeks holidays compared to 2 in the US yet still manage to sell twice the number of cars.

Who wouldn't want this as a direction for Australia to head in? If only we had the brains and vision in Canberra to implement it. Instead we are going to see calls to drop the minimum wage and reduce other conditions. A dive for the bottom when we should be aiming for the top.

Steele. It does amaze that when in trouble the ones at the bottom are used and it seems abused. Ive said before the 'fish rots at the head'.
Before the Govt even considers donating millions upon millions of dollars we dont have, do they actually investigate each company? Are the CEO's and OCE's and well, basically the ones who arent receiving a minimum wage, being over paid, over compensated, given company credit cards to use willy nilly? Oh.. sounds familiar. Power and wealth breed greedy people. Common sense would go a long way.

I see another sacred cow is off to the slaughter house.
Pity, if any I would like to see SPC survive, as it is food that will go.
We will I am afraid realise too late that proactive action should have
been taken 20 years ago when Colin Campbell wrote his article and his book.
None of you listened, and you are still not listening.

YOU DO NOT HAVE THE MONEY TO REBUILD MANUFACTURING !

Dear belly,

I have just read about the decision which Abbott crows is an “important marker” of his government.

http://www.theaustralian.com.au/national-affairs/abbott-government-rejects-aid-package-for-spc-ardmona/story-fn59niix-1226813766357

He is also quoted as saying "This is a government that will make sure that the restructuring that some Australian businesses need, some Australian sectors need, is led by business, as it should be,''

What he really means he is wedded to the idea of the market being the be all and end all.

My God what ideologues have we let loose on our country. People bleated about the dangers of Green ideology but that is nothing compared to the damage these lot will wrought before we heave them out. I am not referring to the entire Liberal party or all its elected representatives, just look at the efforts of local Liberal MP Sharman Stone to get the package approved, I am speaking directly to the laissez-faire mob in charge who worship the holy grail of unfettered market forces.

I have always respected the electorate's decision but I really feel this time we have been sold a pup.

I want to nominate SteeleReedux for some sort of intellectual Darwin award.

SPC Ardmona it is in the spotlight right now.
Belly,
Govt should not be giving 25 million to a company that made a 225 million dollar profit only recently. What government AND Unions should be doing id to lock SPC's coffers so far as accessing them for paying their executives is concerned. Government & Unions should band together & take the 25 million out of the 225 mill profit & all will be good.
Don't expect us taxpayers to bail these greedy incomptents out again.

The cost of Tony Abbott,s baby leave is many times more the cost of keeping SPC trading.
Indy, maybe others, is unaware this country post free trade, has just one major Australian fruit processor.
And like others, may well be unaware the massively out standing victims are Australian food growers.
This mornings Murdock press is making its position known in its war on the ABC .
I ask my opponents to consider this, nothing is absolute, I an ABC nut, can find fault with them.
But consider with some degree of truth, can any one not see Murdock Medea is maybe ten times as unbalanced in its self interested reporting.
Australia is increasingly being divided by this strange little [morally] man, we are only at the start of a battle to keep some form of freedom of the press.
Abbott, a few of his front bench, and a few of his supporters are inflicting wounds in the end, on them selves, a change in Liberal leadership will be the result.
And scares to this country,s very fabric of one combined people in the end the fair go mate we love to claim is first victim of this poor leader and his Multi Billionaire BOSS.

Belly,
I'm afraid the Abbott bashing alone is simply not good enough to excuse what the ALP did & the ABC does.
I wholeheartedly agree that the Baby bizo is a bizarre decision & I for one am deeply troubled that the Coalition does make decisions like that.
You always mention truth well, the undeniable truth is that due to Union demands we are now arriving at situations such as Holden & SPC. The other guilty party are share holders & the tax system. Of course the ALP & it's unions will now embark in earnest on Abbott bashing to take the focus away from their own incompetence & corruption. Where are the unions when they're needed ? What have they done for Holden & now SPC workers ? NOTHING ! Instead they'll keep blaming Abbott's lot & ruin Australia even more. I suggest the unions do some Tafe courses in integrity & resposibility before blaming others for their doings.

You know the irony of all this is that we, the consumer, have the power to save almost anything we choose, BY SIMPLY BUYING OUR LOCALLY MANUFACTURED PRODUCTS.

It's our choice and to simply sit back and blame the government for the inherited mess left by labor is typical of you one eyed die hard labor supporters who continue to offer your unconditional support.

Remember this, in 2007 we had ZERO DEBT AND $20 billion IN THE BANK!

That's FOUR HUNDRED AND TWENTY BILLION REASONS FOR THE REST OF US TO BE TOTALLY PISSED OFF!

Any you want them back!

Belly,
No doubt we do have problems in Oz when it comes to manufacturing, and in many other areas for that matter, but at a time when we need the best people in the top jobs in Government we have the worst.
They appear to be totally bereft of any vision and forward thinking. Real backward looking thinkers.
As for Auntie. She can be a pain in the back side, boring, lecturing, but is our Australian Auntie, reliable and in the main not prone to telling untruths and exaggeration, entertaining even at times. Every family should have one.
More reliable I feel than he who changed his citizenship for that of another land and then lectures us on how we should go about things in our country.
I agree Belly, the Oz I know was the land of the 'fair go'. Those in power and of influence appear determined to change this for reasons best known to themselves. Money I guess. In my opinion there should be more to it than that.
Take it easy.
SD

Manufacturing is not struggling because the federal government is not giving enough, the simple reason is that the cost of making goods here is more than they can be sold for.

A hand out here and there is not going to change anything, but stave off the inevitable.

The only long term solution is to reduce the costs. In SPC's case as with the car manufacturers, the costs of manufacturing have spiraled up and the cost of imports has fallen.

Costs that can be reduced are:
*Ridiculous restrictive labor agreements can be normalised,
*The carbon tax that is pushing up all energy costs can be scrapped,
*The >20000 new pieces of red/green tape that costs time and money to comply with can be scrapped.

The only possible solution is to remove the cheap labour content in the
things that we buy. Contained within the labour costs are other costs
to do with workplace conditions such as unreasonable holiday rules
and other time consuming practises.

We can do that and also remove the cheap labour of overseas workers by
basically sawing off the rest of the world before it goes away all by
itself. Globalisation is finishing anyway so if we get in early and
disconnect from the cheap labour market we may just have enough time
to rebuild the important industries before the real crash occurs.
Also we will be able to control the rate of change.
It will meant disconnecting from the World Trade Organisation and a
number of other organisations, but that will happen anyway.

Bazz you fell hook line and sinker for our temporary Prime Ministers rant yesterday.
It would better serve if you made every move to hear or read the local LIBERAL members firm rebuttal of her leaders words she HIGHLIGHTED he was wrong to blame wages or unions.
Recent cuts of both workers and buying of fruit highlights a willingness to change.
This whole thing is about the need for change and upgrading the plant.
I weary at use of Aussie workers to blame any thing on, the do you understand are just like the bloke next door, not fitted with horns and tail.
I urge folk to look for the basic truths in issues not follow the increasingly strident Abbott-Murdock government line, it is flawed.
As every day passes we get nearer the one that see the Liberal party remove this strange bow legged and bent mind man.

Belly,
With all your talk of Abbott this and Abbott that, I distinctly recall Whitlam saying, as he drasticly reduced tariffs, "Tariffs don't protect jobs, they only protect profits".

How many businesses have closed and how many thousands of jobs lost since then. It is now too late to save manufacturing here.

Look forward to the ABC and SBS getting a thorough going over. The bias and the anti Aus rhetoric is now too much to take. Sure the Murdock press is now favouring the LNP, but who can blame them after the incompedent labor and it is his company so he has a right to favour one or the other. The Fairfax press is biased Labor anyway.

Rubbish Belly, it does not matter a hoot what any politician says or
does, the whole system is going to be reconstructed anyway, the only
argument is do we take preemptive action or do we have it forced upon
us by circumstances that we do not control.

It may well be that Cocola Amatil, 24% owned CoCola Company, will decide to unload the SPC plant.
There then would be a case for the government to buy the SPC plant
and give those shares to the local council, or a co-op setup to own
and run the plant.
It would be an early example of localisation, which is the way of the future.
Then the government could institute food tariffs to protect our food sources.
If the WTO doesn't like it tell them that the world is changing and they are about to become redundant.
When it comes to survival then it is number one first !

No we can't. There are far easier ways to make money for less effort. Hence no one with any brains will invest in manufacturing in Australia.

I wonder how many of the arm chair warriors here have actually tried to get a manufacturing business up and running in Australia?

The costs are through the roof. There are so many hurdles. Unless you've actually tried and done it, you'd have no idea. It's an exercise in futility and most, nine out of ten fail.

Generally speaking, employees are like tenants: the owner must accept all risks, responsibility and accountability, and he should be grateful if any care is taken in return of his expensive investment.

Jobs, like shelter, are always the responsibility of 'someone else' and 'government'.

"Hey, got to take an early mark boss, its Poet's Day and we've having a monster p*ss-up at the renter. Visitors allowed to park on the landscaping. Move the wood fired spit with pig into the living room if it rains."

RawMustard,
Agree.
Been there with small businesses. Successful but always sold, no guessing why.

....Generally speaking, employees are like tenants: the owner must accept all risks, responsibility and accountability, and he should be grateful if any care is taken in return of his expensive investment.

Well said OTB. By the way, that's exactly why Holden are leaving. Their workers conditions are the envy if the world, only one small problem, they have no jobs!

You see the unions in all their wisdom forgot one minor detail when stamping their feet for the deal of a life time, Holden!

....Been there with small businesses. Successful but always sold, no guessing why.

Here here! Although I still run a small business on my days off, it's just that I have No Staff, No Landlord (apart from my own super fund) and no headaches.

Should have done it years ago because the better you do in this country, the more the tall poppies want to shoot you down.

Dear rehctub,

You keep trotting out the same old line and it is bollocks. German workers are paid twice their US counterparts and considerably more than our auto workers. Add to that conditions like 8 weeks annual leave compared to our 4 weeks and 2 in the US.

Yet they manage to produce twice as many cars as the US.

Redux, re BMW etc, yes but I cannot afford to buy their cars.
I used to buy Volvos but they are now out of my reach, I now have a
Carolla.
It would be interesting to know just how they do it.
Perhaps more importantly, how Renault and Citroen do it.
I notice GM is now out of Europe.

.....Yet they manage to produce twice as many cars as the US.

SteeleRedux It's called strong work ethics, and our car industries just don't have it.

Besides, the unions simp,y won't allow it. From car industries, through production industries, the docks and the building industries.

Infact, the unions quite often seam to want to be disruptive rather than assisting industries. Not to mention down right crims at times.

If we want manufacturing back to the first world...there is only one, way bring back import tariffs, the right of a sovereign nation to decide what tax to impose on imports that KILL local manufacturing.

You will not hear any of the imbeciles we elect going near that one. To do that we have to tell the IMF, World Bank, the UN Development agency and the European Banking cartel to take a running leap.

I REPETE MY FIRST POST
“Just a thought – why don’t we tell GM and Ford to just leave the plant and remove themselves back to the good old USA; after all we, the taxpayers, have paid for the plant over the years under all stripes of government; we take those plants in Vic & SA and create a new company to design and produce cars for Australia and export.
After the enterprise is up and running we float it on the ASX. This would not fit well with the current mob, but one can dream of better things”
In 1855 when the Sydney Railway Company went belly up NSW’s first rail project was taken over by government and became the first government owned railway in the world;
Come on boys and girls we can do it today for the car industry, don’t let Wall St and Macquarie Bank dictate Australia’s futur

JMCC you tell us, "In 1855 when the Sydney Railway Company went belly up NSW’s first rail project was taken over by government and became the first government owned railway in the world;". The only thing you fail to mention, they have beam loosing money ever since.

I don't want to knock, so I suggest we give it to the unions, with a rock solid guarantee of not one more cent in subsidy. That should finish the unions once & for all.

What a government run car industry could loose each & every year, would make even the railways look profitable.

Was that a ‘Hasbeen’ from general society prior to joining the Tea Party?
Why is it you far right Tories want to constantly put down the Australian Workers, is it to line the pockets of multi national companies, who having raped and pillaged a nation, pulls up the tent and moves on to the next unsuspecting country who offer cheep labour and taxpayer subsidies? Come on old mate explain.

Hasbeen has never had a kind word for humanity ever. And not likely to change any time soon. A professional knocker.