Shttp://www.smh.com.au/federal-politics/political-news/cabinet-rejects-spc-ardmonas-bid-for-25-million-assistance-20140130-31p4e.html

So the government is not prepared to chip in 25 million to save SPC. Well personally I would be more than happy to chip My $2 to save it going under. A few numbers should be enough to convince anyone that the cost of letting it go under is far greater. We have some 1200 people employed in the factory and some 1500 farmers who grow the fruit. Let us be conservative and assume that 2000 people end up on the dole for at least 1 year, that works out to about 460X25.5X2000 or 23.46 million. It is basically going to cost the government the same regardless of what they do but the local economy is set lose some 100 million in lost wages. It looks to me the government has totally lost the plot on this one and probally the next election as well.

warmair, the only way governments should bail out businesses is if they are one, going to be profitable, and two, the government (we the tax payer) takes a stake in the business.

However, like any struggling Aussie business, the best way to save them is for US, THE CONSUMER to support them by buying their products.

Rechtub it is harder for a blind man to thread a needle than get us to buy Australian.
I actually do always.
Dick Smith is anti union yet he is a truly great man.
He gives his profits to charity.
I pay over the odds but stock my larder as if I am still living in flood prone ares.
BUT lets not ignore SPC is not about the workers it is about a whole community and its farmers.
Abbott is playing Russian Roulette.
If it gos he will be seen as a wastrel on baby bonus and the killer of a community that has never voted for other than his coalition.

Worked there myself in the seventies with the maintenance crew. There is plenty at stake, wasn't the money for modernisation. Surely that makes sense. But then, nothing has made sense for several months now.

Belly,
The Goaf's & subsequent ALP Governments are who have run Australia down to level it is at now. Abbott can & will be judged in a couple of years. Meanwhile stop excusing the most incompetent outfits this country has seen.
Tell your union mates to stop demanding unrealistic pay rates for the middle & upper public servant class who are ruining Australia whilst neglecting the basic wage earners.

Let's face it, we are never going to be able to compete on the "world" market (really the cheap labour 3rd world countries) until the array of so called "free trade agreements" is consigned to the rubbish bin where they belong.
How can you possibly have a "level playing field" when the labour force in these competing countries is paid the usual "handful of rice a day"?
The ONLY thing that will save our manufacturing sector is to bring in tariffs and that also goes for our fruit and vegetable industries as well.

....The ONLY thing that will save our manufacturing sector is to bring in tariffs and that also goes for our fruit and vegetable industries as well.

The problem is Robert, we rely on them to buy our products, far more than they rely on us.

We can't get away fro the fact that too many on the public purse are earing too much for too little in return. The flow-on to the small business operator is detrimental as we have seen now over the past few decades. One of the most unfair & complex tax systems doesn't exactly ease things either. Australia needs to work towards a major overhaul in its workings. Reward those who put in the effort not the high maintenance parasites who do nothing except dragging us all down.

*The problem is Robert, we rely on them to buy our products, far more than they rely on us.*

And our products are:
Iron ore, coal, salt, gas, farm products from agribusiness.
All of which make obscene profits for some Australian billionaires and the rest of the profits are exported overseas.
yes they do employ a lot of people but if we had a proper manufacturing sector , they would be employed there instead.
The agribusiness production is tearing the heart out of the remaining soil and also is exporting our water.
The mining is the cause of enormous emissions of CO2 and also results in degradation of the environment.
It all comes back to rule by Corporations and money.

Robert, I work in the gas fields in QLD where a common wage for unskilled is $38 per hour.

They work a 21 on 7 day off roster and pocket AFTER TAX about $10 K per month.

How do you propose manufacturing, farming, almost anything else by way of industry can compete with that and stay competitive?

Moreso, how do you propose we draw workers away from that kind of money and pay them less than a grand a week?

Sorry, it's simply not going to happen.

First of all which do we prefer that people should survive on government handouts or do something productive. I strongly favour the latter approach. Now if the government has a choice between investing in a project, that will pay workers the minimum wage, or paying people to sit on their bums for half that amount, it should be a nobrainer as to which is the better course of action.
As I understand the situation the company is currently not losing money, but is not getting an adequate return on funds invested. The solution to this problem is to invest in modern equipment. Now Coca-Cola the owners of SPC have a primary responsibility to their share holders and owe Australia no favours, they can just as easily invest the money on a more profitable enterprise overseas, and I have no doubt will do so if the government is not willing to make a contribution.
The argument that the government should not prop up unprofitable business is legitimate, but that is not the problem here. If investment in new plant is not undertaken soon, SPC will indeed become unprofitable.
The government is simply placing rhetoric above a rational response

Nothing is ever simple straightforward and easy.

I think we have all developed a mentality that the government can solve all our problems which then of course passes masses of statutes and laws that overwhelm them. Just look at the tax law that now cover thousand of pages and get added to every year. They try unsuccessfully to manipulate our economy when on balance I feel the market should be left to its own devices when I think booms and busts would become a thing of the past. Obviously you can't please all the people all the time and there will be winners and losers, but everyone expects governments to run an economy where everyone is a winner. It can't be done, although the promises it makes before an election might make you think it can.

We live in an over populated world with countries competing against each other to attain a higher standard of living. I think we have mortgaged the future, as many other countries have, by living on credit and paying ourselves far too much.

First home buyers, baby bonuses, maternity leave etc are all bribes made by governments that make us complacent about being self sufficient. I have been made redundant and fired many times in my working life, but I have never been on the dole. I have picked myself up and started again. I have only taken one genuine sick day in 60 years. and recently took a job delivering pamphlets for some extra money and I'm nearly 80.

We are all over paid and it should be remembered that whatever "gift" we get from the government comes out of someone else's pocket.

All of which make obscene profits for some Australian billionaires and the rest of the profits are exported overseas.
Robert Le Page,
That money is created by employing many people. Where do the obscene amounts of money to pay the Academics & bureaucrats come from ?

How do you propose manufacturing, farming, almost anything else by way of industry can compete with that and stay competitive?
rehctub,
why has there to be such a competition ? Just you wait & see how many families will break up because of Fifo & it's money & who'll be paying the price for all thoes dysfunctional people when all goes ar$e up ? Our society will pay AGAIN !

Let Coca Cola pay

ChrisGaff1000 so they do!
Lets be honest say you owned butches once butcher shops, he told us he had at least two.
One is make a loss constantly and in the hundreds of millions.
Do you take the profits from one to prop up the other?
Will share holders in say Coke be happy to see losses of SPC propped up by what would be their loss.
Why not just drop the high income baby bonus and fund this community?
What is behind Abbott,s Socialism for the well off is he trying to breed the next generation of Liberals?
Silly yes, but still not as silly as drowning jobs and manufacturing while blessing high income earners.

I say let the unions pay, they kept pushing the costs up & up.

warmair - Are you for real 1) SPC is owned by Coca Cola why should taxpayers subsidize there profits?

If a business has 2 or more shops and 1 is not making a lot of profit but the other one is making lots of profit does that give them the right to get bailed out by the taxpayer NO!

Yep, why should we give Coca Cola(tm) 25 million to support a failing venture? If it was worth it, I'm sure they could pull some of that 550 million they made last year to prop up SPC!

Unless you've been living under a rock, most people around the world are sick to death of .gov propping up big business.

In a normal world the failure of SPC would lead to a number of small mom and pop start ups taking over thereby distributing the wealth more evenly. Isn't that what everyone wants, a more even distribution of the wealth and opportunity?

If Coca Cola thought SPC was a viable company that would make a profit after a $25 million dollar cash injection they would do it, also if Coca Cola thought the Government was stupid enough to give them $25 million they will try and get it.

The big problem I see is Big Business don't want to make a reasonable profit they want to make an obscenely huge profit.

Yes snake, our situation can be summed up with two words, wants V needs.

As for doing business here, that's fast becoming a thing if the past, because you can throw all the money you like at a business, but unless they can compete it's money down the drain. Just look at Holden.

Any government assistance must be conditional upon the tax payer getting value for money. A hand out does not delive any such value to the tax payer.

Coca Cola made a $250million profit last year? Come on, $25 mill. to save their own company cant be too much of a struggle. They'd make it back in less than two months.
Why is SPC not profiting anymore? Are the Big Supermarkets importing overseas products to increase their profits? If so how un-Australian. Surely the Government (dare I say it) has a responsibility and the right to implement controls whereby only a certain percentage of products can be imported.

Have Coca Cola investigated SPC to ensure no profiteering or fraud is occurring among CEO's and peers? No overpaying themselves, overdoing the bonuses and perks? (sounds familiar).

In case Coca Cola hasn't noticed this country is in DEBT. Big time. The Govt are picking on the aged, medicare, the lower end of the scale for crying out loud to 'regain a healthy surplus'.'chipping in a mere $25mill' Chicken feed to some it seems.

Have they convinced themselves that they deserve a hand out? And in what almost seems a threat 'consider 2000 more on the dole' there it is again, pick on the bottom end of the scale.

Belly, "Why not just drop the high income baby bonus and fund this community?"

You keep going on about that. I wish it had never been promised but for the moment I hope its not dropped. It was part of LNP election platform. I for one have had far more than enough of pollies dropping inconvenient parts of their platform when they get into office.

Time for a change on that front, I don't know if Abbott has what it takes to keep his word but hope so. Someone has to make a start at regaining trust.

R0bert

Okay folks lets put the argument a little differently.

It all comes down to obligations.

CCA had agreed as part of the package to invest over $90 million dollars as part of the restructure and were putting a rather sound case it appears that one off grants from both the federal and state governments would turn an iffy business proposition into a viable one.

Like it or not CCA are a company with shareholders and the board is required to act solely for the benefit of those share holders. This is their obligation as mandated by law.

If the required investment into the SPC arm of the business was going to result in profits being skimmed from other areas to fund its continuing operation, because of interest repayments incurred by funding the full project had turned it from being profitable to only a marginally profitable or indeed a loss making exercise, then the smart thing to do is to get out.

For those who are calling for CCA to fund something that doesn't add up in a business sense is idiotic and an insult to their ideology.

CCA went seeking another co-investor, the government. The government's obligation is to its citizens and the communities in which they live. This doesn't just mean the workers directly employed by the company or the farmers producing the fruit but all those employed in associated jobs in Shepparton and its surrounds. Its charter should be about putting in place incentives that will see people gainfully employed and paying taxes. It should be about protecting the social good industries and provide through their employment, especially to rural communities. And these benefits should be weighed against the costs, both in terms of unemployment support and in damage to those communities.

Cont...

Cont...

If this investment in the form of one off grant helped to secure the jobs of 3000 workers for the next ten years then this equates to a little over $800 per year per worker.

But this bunch of ideologues would have none of it. Why? If you listen to Abbott's speech it is all about the workers and their above award payments. Basically saying it is CCA's responsibility to go strip them of conditions to remain viable.

In the end it is typical of the crop of Liberal politicians over the last couple of decades. Hands off and take no responsibility! Sell the Australian Wheat Board? Too right! Oops, did they really become Saddam Hussain's largest provider of illicit funds? Well don't look here. Not our responsibility!

Australians have elected these guys because we had been assured they were the better economic managers but all they want to do is let go of the controls and let the market do the work. This is not what the 'old school' Liberal Party would have done. Damn what an utter disappointment they have turned out to be.

Let's end all those taxpayer subsidies to corporations so it's finally everyone for themselves - the true Liberal Way.

We're almost rid of those vehicle manufacturers at last.

Why not move onto the Private Health funds?
Their product is just too expensive for the average consumer so we have to be threatened and intimidated into joining.

Then we can move on to those poor struggling mining companies who pick up $4.5billion from the taxpayer (which they can then contribute to even more political lobbying for benefits and cuts).

Diesel fuel subsidies to primary producers is fair enough - but miners?

So much to do and so little time.

*and pocket AFTER TAX about $10 K per month. compete with that and stay competitive? draw workers away from that kind of money *

How much longer do you think this gravy train is going to run?
It all depends on China and that economy is on the edge now.
When it fails Australia is going to be left with a huge force of miners, a lot of holes in the ground and the biggest unemployment ever.
Those on $10K per month now will have huge mortgages and be unable to service them.
They will not be able to sell their mega mansions.
They will take lower paid jobs rather than lose everything.

Sorry, it simply IS going to happen.

In the case of SPC, if CCA pull the plug they will not be carting off the buildings and infrastructure and the machinery is not worth them taking so that's when the government should step in buy the remains at what should be fire sale prices and invest in up to date machinery.
The work force could then be given the opportunity to continue operating under THEIR OWN management.
It will be up to them to set wages that will realize a profit because they will be working for themselves.
The final bit of the equation is for a tariff on imported fruit and vegetables to put on to level the playing field properly.

You make it all sound so easy Jodelle. It's public money we are talking about and while it is sad that an Australian icon may disappear, it should not be propped up by the tax payer. However I see that you suggest Coca Cola should continue to support it although I understand it has been doing this for some time. I am not sure how Coca Cola can "make up" $25,000,000 in two months. If that was the case they could easily double their annual overall profit instead of the present $250,000,000. Your logic doesn't add up. All companies should make a profit and of course a quarter of a billion dollars is a lot of money, but it has to relate to the capital investment. If it doesn't the share holders will not be happy, the tax man will lose out plus all those super funds in which you may have an indirect interest.

People do not buy SPC products as they're too expensive. Our production costs are too high. You can't blame the supermarkets for importing competitive products when customers demand cheap prices. We have had until now a high dollar, the result of a floating exchange rate and our mining activities have exacerbated that. Supermarket prices will rise if controls are levelled and then everyone bitches because inflation rises. We live in a competitive world now with free trade. If we start to impose controls we will affect our exports and God knows, we need them to enjoy a good standard of living here

I agree that we have a great deal of debt and we will have to borrow even more money overseas when inflation rises, and interest rates rise. so look forward to social unrest in the future and be careful what you wish for.

Finally many executives have high salaries that may be too high, but I think you are drawing a "long bow" to suggest profiteering or fraud and as I said originally, we are all living beyond our means and I think we shall have to make sacrifices.

If CC Amatil pulls the plug then the government should buy it for $1
and try and organise a co-op with the local council, growers and any
local business, or person that wants to buy a share.

Local business is where everything is going in the longer term so it
would be an interesting project and would give the government guidance
in just what will be needed for all those companies that will go
broke over the next 10 to 20 years.

However this will need politicians to understand or accept that big
changes are afoot, but at present they are rusted on to the concept of growth forever.

Snake. Im always open to correction and constructive criticism, so thank you. Since finding this site i have expanded my knowledge (from zip basically) on politics and subjects I never knew of let alone understood. Some of my suggestions or questions are very 'layman' and are probably considered ignorant, as most are out of sheer curiosity.
Cheers

Thank you Jodelle for your comments. I always try and be courteous on this site, but sometimes I get sucked in when someone pushes my button ! Like everyone, I have an opinion, which I like to express sometimes and I always try to take a balanced view, but not always the expert. Finance and what is being done in the world by central bankers has me fascinated though.

Dear Steele,

Once again - well argued.

It is indeed a shame that the current government can't see
the value of supporting an Australian industry in food
growing and production. At the rate the government is
going it's creating a domino effect leading to major
destruction of Australian industry. You can be sure that the
residents of the Goulburn Valley will certainly not support
the Libs at the next election - and who can blame them.

Dear Bazz
If the government buys the business for $1 then they will have to spend $140 million dollars to make it a viable business, in most cases I am not a fan of the government trying to run businesses.

If the bailout works then everybody wins.
The government will receive tax income, the workers will have a job and the company will continue to be profitable.

If the bailout is not forthcoming nobody wins. The company writes off an asset, the workers lose their jobs, the government loses the tax revenue and will have to pay welfare payments to a substantial number of people, probably in excess of the of the value of the bailout.

If the bailout is only partial successful and ultimately SPC goes broke anyway, then the government will have cut its loses by some margin due to tax revenues, the workers will have been employed for an extra number of years and $140 million will have been injected into the local area. The big loser will be CC Amital which will have wasted $90 million.

I consider the chance of CC Amital providing the whole amount highly improbable.

Dear Steele
I strongly support your view.

SteeleRedux
If it only "equates to a little over $800 per year per worker." then let the workers fund their own survival either through their bank accounts, a weekly dribble or their superannuation. Why should the taxpayer be involved.
Personally I think the whole affair is a CCA scam.

Dear Chris,

You ask “Why should the taxpayer be involved.”?

Two points.

The first is the most obvious – that poor old tax payer will be involved - providing unemployment benefits to those who lose their jobs.

The second point is that the 3000 workers plus all the producers are all tax payers too. Whether it is drought relief for farmers, bushfire relief for burnt out communities, or flood relief for flood victims the rest of us are usually prepared to pay out to get people back on their feet, or to stop from going under, or in this case to stay on their feet. We not only do it because it is sensible economically but because it is the right thing to do. Australian in fact, or use to be.

All of Abbott's rhetoric at the press conference when the decision was announce was about blaming the workers for things like 'wet allowances', 'penalty rates', 'above award' 'redundancy provisions'. No hint of empathy for the way they must be feeling with their job security now so stricken. These are sacrificial lambs to be slaughtered in the name of 'taking it up to the unions'. They deserve far better.

Obviously no government has a moral right to take money away from us, taxpayers, and give it to a commercial entity - although there's nothing new about it, that would still be theft!

I do like Warmair's original suggestion and am almost tempted to visit the local supermarket right away and deliberately look for "SPC" products (normally I only look at the ingredient-list, not at the titles, so I don't know who produces what) in order to help them out.

... But I wonder: if I did that, wouldn't my money go instead to a filthy American corporation, rather than to our Australian farmers and producers?

Some here claim that all those farmers and food-producers would become unemployed - but why can't our farmers get organised and sell their produce independently of the Americans? I certainly would have liked to help them if they did so!

Snake. Most of the subjects posted here are heated topics, lots of opinions and button pushing. haha
Expression is good, I havent indulged in so much 'expression' before in my life.
I also wanted to refer to your comment on page 2, last friday. Loved it.
Your reality and truth so inspiring, Many would benefit from your words and qualities.

Warmair, if the govt did buy it for $1 then the operators would have an
operating plant with no debt. That is a big head start in any business.
The government could help with paying for management expertise to get
the business setup and running.
Probably the existing staff would know what equipment changes would be
needed to modenise the plant.

No, I think with some key help from government, which would not cost a
lot, a new workplace agreement and the support of the local community
it should work.
Now from that point the effect of imports would have to be studied and
it may be necessary to introduce some tariffs.
We are talking about food here and the rules have to be different.

....Basically saying it is CCA's responsibility to go strip them of conditions to remain viable.

SteeleRedux You forgot to mention that their wages and conditions are way over the top. Makes a huge difference to that argument. Nothing wrong with bringing them back to earth to save their jobs.

Robert....How much longer do you think this gravy train is going to run?

According to industry experts, about 30 to 50 years. In fact, they have found another gas deposit under the current one and it is suggested it is much larger, so perhaps 100 years or more.

As for SPC, as I have said, the only way governments should support these is to take a stake in ownership, because then they COUKD take over the factory if the others decide to leave.

....If it only "equates to a little over $800 per year per worker." then let the workers fund their own survival

Exactly Chris, that's $15.49 OER WEEK.

I'm sure I would pay that to save my job/future. It's not as if they are underpaid.

Foxy, bring back our $400 billion your beloved labor wasted and we might have a better option.

Abbott has stacked on 40 billion in three months , because he doesn't know what to do. They went to govt; with no policy and now we are in a mess.

It is an amazing truth.
Tony Abbott rebutted by the local member, told us the union/workers wages agreement was behind the SPC drama.
SPC has never ever made that claim.
The perceaved fire breathing dragon, union/workers never existed in this matter.
Abbott[a man bent on self destruction] even told of things that firm asked its workers for, as union over pricing!
Truth must matter.
A long term but constant loss in the millions even hundreds of millions is SPCs problem.
In such climate workers/unions follow, quietly and sheep like, the firms wishes knowing all jobs could go instantly.
Enterprise Bargaining Agreements saw the firm put its wants on the table and win them all.
Such agreements see the firm put its wants first and rarely not get them the include
Key Performance Indicators.
Less lost time injureys
ATM Attendance Maxisation, less sick leave taken *AND THE BOSS OFFERS some be paid for if targets reached.
We must confront the truth our Medea ,that part of it owned by Abbott,s co Prime Minister Murdock, is tell us slanted planed lies.

....A long term but constant loss in the millions even hundreds of millions is SPCs problem.

Precicly why the tax payer shouldn't be propping them up, because once the subsidy runs out, they will either ask for more, or leave.

At the end of the day every single function of fruit processing, from picking, transport and processing costs too much now in this country and the transport arm is about to be served another blow by way of the carbon tax.

579, what has Abbott spent the 40 billion on because if it's the illegals it appears to be money well spent, don't you think.

Also, what projects of his have failed.

I think the score is about 50 nil in labors favor.

The SPC board is meeting on 18th February, lets wait and see if they
pull the plug. That is what the government should do.
The board knows they won't get a bailout, so it might prompt a better
opportunity.

I'm afraid that my question has still not been answered:

If I now, out of compassion, go to the nearest supermarket and purchase SPC products, will the money go to Australian farmers and producers, or would it go to the American owners?

Yuyutsu,
Quick answer, not wholey.
Cocoa Cola owns 24% of CC Amatil, the rest is held by a variety of
shareholders and you would, like any company on the ASX, have to study
their share register.

CC Amatil owns all of SPC.
The longer answer, 24% would go to Coco Cola.
However a lot more would go into wages and farmers.

Thank you Bazz!

I just wonder what prevents those farmers and employees from packing their own food, so they don't need to give a cent to the Americans. This will certainly affect my preference to buy their products.

SPC used to be a co op in the seventies. There was SPC, Ardmona, KY, and Girgary. SPC and Ardmona became one. KY and Girgary expired.
SPC had a store where you could by damaged stock. Cans with a dent in them, and no label. At 175 cans / minute going through the closer only one had to fall over and you would have a gigantic pile up. The cans are made at the plant at the rate of 750,000 / 24 hour

Yuyutsu, well 579 answered most of your questions.
However the plant is setup for a market that has changed.
The buyer preference is not now so much for cans but for single serve
plastic packs, plastic jars etc.

For a farmers co-op to build a new plant will thanks to the low price
paid by Coles & Woolies, be more than the farmers could raise.
So they are between a rock & a hard place.
If Amatil does not put up the money then it will close for good.
The only alternative I can see is to place a high tariff on imports.
Then the banks might be interested.

No matter what the ATO says, food is an exception.

Dear Bazz,

So if the problem is just the high rental costs of the machinery, can't the farmers ask the public to help them?

What if they offered deals such as "you buy us a machine and we'll deliver you X number of cans/packets for the rest of your life"?

Then Coles & Woolies too will be out of the picture!

Given that financial investments, after tax, are failing the race against inflation, it would be great if I could put some of my savings directly in food instead, so I'll never have to worry about price increases and be assured that I'll have enough to eat for the rest of my life.

While it is not feasible to invest directly in food because there's a limit on the quantity of food that can be preserved for decades, some arrangement like once a year having a truck, directly from the factory, drop say 1000 cans in my shed, can be quite appealing (obviously there should be some variety and an option to exchange certain foods for others, when available).

The government can contribute its part towards helping Australian produce, by assuring that such semi-barter deals will never be taxable or incur red-tape.

SPC doesn't only do fruit, beetroot, baked beans, spagety, rice cream,
Carrots, and the large caterers tins 3 kg. Soft packs run along side the canning as well. Coles used to rent the cannery and staff, put in their own supervisors and can their own supplies from contract growers, to do their own brand labels. It will leave a gigantic hole in the town without SPC.

Dear 579,

<<It will leave a gigantic hole in the town without SPC.>>

We don't eat SPC - we eat the fruit, beetroot, baked beans, spaghetti, rice cream, carrots, etc: so why mourn the American involvement? let them go back whence they came with their tail between their legs, then we can produce our own without their "help"!