Engineers call for new Australian auto policy

[Road_Warrior]

What a shame it has taken something as significant as Ford announcing its factory closures for people to start coming out and stating the bleeding obvious.

http://www.goauto.com.au/mellor/mell...257B830021072F

More robots and regions needed for Australian automotive industry

7 June 2013

By IAN PORTER

AUSTRALIAN car-makers and parts suppliers need to embrace more technology and consider fewer human workers, says a leading automotive engineer

At the same time, the government’s future automotive industry policy needs to incentivise local companies to expand beyond our borders into regional markets.

“We have to learn from overseas. How do other countries do it that have high wages, that have other high costs, that don’t have natural resources?” says president of the Society of Automotive Engineers-Australasia Bill Malkoutzis.

“There needs to be a holistic approach by the government that addresses the overall industry, not just individual manufacturers and importers.”

Mr Malkoutzis was speaking in an address to the society’s annual meeting last week.

“The Australian industry needs a low labor input, possibly robots with supporting technicians, and building in volumes high enough to amortise the high cost of technical content so it competes with low Asian labor rates,” he said.

“There will also be a need for detailed policies to ensure a true level playing field is achieved to open the markets that are currently closed to Australian manufacturers.”

General NewsParts center imageLeft: President of the Society of Automotive Engineers-Australasia Bill Malkoutzis.

He said Australia needed to go back to the approach the late Senator John Button adopted when he drew up what became known as the Button Plan.

Mr Malkoutzis said the Button Plan was designed specifically for the Australian industry, addressing it weaknesses and building on its strengths.

“But that plan is 30 years old now,” he said. “We need another one of those where we seriously look at what makes the industry work right now, how other people are surviving, and adapt to that.

“Then the government can spend its money in a very effective, pointed way to facilitate that (success) in our own country.”

As for high-cost industries, Mr Malkoutzis said he had toured the Volkswagen plant at Wolfsburg.

“They build half a million Golfs a year in that plant. How do they do that with German wages?

“There is a whole underground plant that builds the bodies and paints them underground. How many technicians do they have in that area? At one point it was only 16.

“Upstairs there were staff putting the components on, with a lot of smart assembly equipment, and there was a material control management system up in the roof that presented parts at the right time.

“It took lots of money, technology, tooling, technicians left right and centre and few people actually putting the thing together. They spat a Golf out every six seconds,” he said.

He said the way to achieve significant volumes in Australia was for the government to strike deals with the manufacturers so they could become regional suppliers.

“The Government has to go to these companies and say we’d like to make you a regional manufacturer, what is it going to take to do it, to make you profitable and to sell in volume? We struggle with that.”

He concedes that this approach means Australian policy has to make Australia more attractive to the car-makers than Thailand, say, at least for some vehicles or products.

“It might be through specific grants or tax deduction benefits, like for tooling. Instead of 10 years, let them write it off in two years. That’s only one example.”

However, Mr Malkoutzis also singled out market access as a necessary part of any new plan, and that meant taking a harder line in free trade agreement negotiations.

“The government has to look at agreements it is about to sign more carefully to ensure that they are real, open free trade arrangements.”

He said Australia should not allow itself to be tricked again, as it was by Thailand after the two countries signed another lop-sided FTA which stripped away all of Australia’s automotive tariffs for Thai exports but left tariffs in place in Thailand against Australian exports.

After that deal was signed, the Thai government then raised the sales tax on vehicles with engine capacities above 3.0-litres to 100 per cent, to make doubly sure Australia could never export to Thailand.

Mr Malkoutzis also has a plan to cope with the carbon tax and its effect – which Toyota says is around $115 per car – on Australian industry.

“The carbon tax is fine by me, as long as every car that gets shipped in from overseas that does not pay a carbon tax gets equalized when it gets here,” he said.

They should also pay a carbon tax on the energy used to ship the vehicles to Australia.

“Every imported car should pay its fair share of carbon tax, then everyone is on the same playing field.”

We should have had this conversation 3 years ago. Is it too little too late? I like this guy's thinking, but expecting someone like Ford to stump up cash to install robots in a plant they clearly wanted gone years ago was/is never going to happen. And as for reversing some of the content of FTA's...I doubt that will happen either.

That Golf assembly plant sounds interesting though.

[InfernoSR]

Increase the taxes on imports, and help the locals... sounds simple, and yet our governments for the last however many decades just cannot see this...

[borough]

Originally Posted by InfernoSR

Increase the taxes on imports, and help the locals... sounds simple, and yet our governments for the last however many decades just cannot see this...

Increasing taxes on the imports would have the same effect as closing the gate after the horse has bolted. May as well just give up and stop supporting the car industry and find something else this country can do. I hear we are very good at digging up dirt and sending it overseas.

[tezxr8man]

Originally Posted by borough

Increasing taxes on the imports would have the same effect as closing the gate after the horse has bolted. May as well just give up and stop supporting the car industry and find something else this country can do. I hear we are very good at digging up dirt and sending it overseas.

REALLY?? That's a bit defeatist isn't it, if that's the view maybe we should just put a bullet in our heads now because we are going to die eventually

Nothing is over til it's over and times and/or decisions change every day just like they have in the past

Maybe this is the wake up call the brain dead pollies needed to change the situation for the better

[pottery beige]

there is a big difference between open market fair and reciprocal trade agreements and being an automotive dumping ground........

[jpd80]

Originally Posted by pottery beige

there is a big difference between open market fair and reciprocal trade agreements and being an automotive dumping ground........

It's a tricky one but the balance of trade between Australia, Japan and Korea is heavily in our favor.

Thailand is a joke, the place is set up to be an export nation with zero intent of importing anything from Australia.

[2011G6E]

Originally Posted by InfernoSR

Increase the taxes on imports, and help the locals... sounds simple, and yet our governments for the last however many decades just cannot see this...

Ah yes, the golden days before the Button Plan...bring 'em back I say! Then we can go back to shoddily built lazily designed local cars because the makers know that they will always be protected by the government from the big bad world outside our borders...selling whatever dreck they dish out to a captive audience who doesn't know any better.

Except now the audience does know better...they know what they've been missing out on. I imagine some of you would be old enough to remember the seventies and the first time you either bought or went for a ride in a friends or family members "funny foreign car", and been amazed at the standard features...disc brakes, AM/FM stereo, rear window demister, air conditioning, cloth interiors...they seem simple things now, but back then they were options on Australian cars, and the cheap stuff that people bought just didn't have what foreign cars had as standard. The makers here didn't have to try harder, as they assumed they would always be protected by tariffs and taxes.
Sometimes...even today with the FG when compared to overseas cars...the foreign competition has features that simply don't exist in our home grown big sedans.

Strongly protecting our industry to force people to buy Australian cars like "the good old days"...?

Be careful what you wish for..

[pottery beige]

Originally Posted by 2011G6E

Ah yes, the golden days before the Button Plan...bring 'em back I say! Then we can go back to shoddily built lazily designed local cars because the makers know that they will always be protected by the government from the big bad world outside our borders...selling whatever dreck they dish out to a captive audience who doesn't know any better.

Except now the audience does know better...they know what they've been missing out on. I imagine some of you would be old enough to remember the seventies and the first time you either bought or went for a ride in a friends or family members "funny foreign car", and been amazed at the standard features...disc brakes, AM/FM stereo, rear window demister, air conditioning, cloth interiors...they seem simple things now, but back then they were options on Australian cars, and the cheap stuff that people bought just didn't have what foreign cars had as standard. The makers here didn't have to try harder, as they assumed they would always be protected by tariffs and taxes.
Sometimes...even today with the FG when compared to overseas cars...the foreign competition has features that simply don't exist in our home grown big sedans.

Strongly protecting our industry to force people to buy Australian cars like "the good old days"...?

Be careful what you wish for..

blaa blaa blaa.. the same regurgitated crap......

what you are obviously blind too see the button plan was not dynamic and allow for changes on the world manuf scene...

bye bye aus manuf...

[mik]

Originally Posted by 2011G6E

Ah yes, the golden days before the Button Plan...bring 'em back I say! Then we can go back to shoddily built lazily designed local cars because the makers know that they will always be protected by the government from the big bad world outside our borders...selling whatever dreck they dish out to a captive audience who doesn't know any better.

Except now the audience does know better...they know what they've been missing out on. I imagine some of you would be old enough to remember the seventies and the first time you either bought or went for a ride in a friends or family members "funny foreign car", and been amazed at the standard features...disc brakes, AM/FM stereo, rear window demister, air conditioning, cloth interiors...they seem simple things now, but back then they were options on Australian cars, and the cheap stuff that people bought just didn't have what foreign cars had as standard. The makers here didn't have to try harder, as they assumed they would always be protected by tariffs and taxes.
Sometimes...even today with the FG when compared to overseas cars...the foreign competition has features that simply don't exist in our home grown big sedans.

Strongly protecting our industry to force people to buy Australian cars like "the good old days"...?

Be careful what you wish for..

Mate........... those days are gone, our manufacturing is almost in the toilet, and your still banging on about us being overly protected, no one wants to give them a free ride, just give our industry fair go.

[2011G6E]

A clever businessman...one who runs a long lasting and profitable organisation that is...can face up to reality and realise there are some things he just can't do himself, so he will do one of two things: employ someone to develop and do it for him, or if that isn't cost effective, hire some outside firm to do efficiently it for him at a substantially lower cost.

No real difference between a business and running a country. If we can't effectively and cheaply make the cars the customer obviously wants, then we can do as other small countries do and pick and choose the best from around the world to supply our needs.

Playing on tradition or feeling the need to keep propping up an industry that honestly there is nothing magical about having in your country (making your own cars) doesn't face reality.

[UberKnee]

Originally Posted by mik

Mate........... those days are gone, our manufacturing is almost in the toilet, and your still banging on about us being overly protected, no one wants to give them a free ride, just give our industry fair go.

But people are calling for/wishing that the government had built a figurative wall around Australia and not allowed any imports in, in the first place. A captive market is easy to please...

[2011G6E]

Originally Posted by UberKnee

But people are calling for/wishing that the government had built a figurative wall around Australia and not allowed any imports in, in the first place. A captive market is easy to please...

...and easy to fool into thinking whatever they are getting dished out to them is "worlds best...trust us!"...as I said, they know now what they would be missing out on if we put up the walls and kept imports out or taxed them into oblivion. A true (automotive) case of "How you gonna keep 'em down on the farm, now that they've seen Paree".

As I said, go back to the seventies when protectionism of the local car industry was high...our neighbour, a Holden man through and through, had just bought his latest Kingswood wagon, a V8 Vacationer. My old man within a week of this bought our latest car, a Mazda 929 wagon, top of the line. The 929 had air con, a floor shift four speed, and AM/FM radio cassette fitted from the factory with four, count 'em four speakers (and the aerial concealed in the windscreen glass!), and window tinting amongst other standard fittings.
The neighbour had his faith badly shaken when he took my old mans car for a drive...he was seriously wondering if his next car would be a Holden at all.

Britain went through it with their car industry, yet their industry, after chopping out all the dead wood and getting rid of makes that just couldn't keep up with modern times, is better than ever.
Our car makers need to sit down and take a good long hard look at themselves and more importantly what they're competing against and what the public wants, and don't just keep trying to rely on selling cars the old fashioned way which doesn't work anymore: that being multi-generational badge-blind buyers who will just unquestioningly and automatically trundle down every couple of years and buy a Holden/Falcon just because daddy had one and his daddy had one.

[westy73]

Originally Posted by UberKnee

But people are calling for/wishing that the government had built a figurative wall around Australia and not allowed any imports in, in the first place. A captive market is easy to please...

Actually that's not what we are calling for at all.
People want to make sure there is a viable alternative other than being force fed imports.

Australian new vehicles sales (local + imported) is running at around or just over 1 million per year.

As of 2011 (couldn't get my hands on more recent data/stats for this) the ratio of local to imported was 15 % local, 85 % imported.

In the USA for the same time was 77% local and 23 % imported. Now I am not sure what the reason for this is other than Americans are more patriotic than we are and will support their local manufacturers.

Some other interesting data pulled from VFACTS shows there has been a steady decline in percent of market share for local manufacturers but not a total wipeout.

For example as of 1997 Ford had 18% market share at a time when imports had a total share of 48%.

Then in 2011 Ford had a 9% market share and imports had 60%.

Now the interesting thing here that I expected to see was that Toyota would take up much of the slack but that's not the case. In 1997 Toyota had a 17% share of the market and in 2011 they had just 18% so pretty much status quo for them. The biggest mover and shaker was 'Other' imports so this would be the 'cheap' Chinese, Korean and Indian imports. This is significant as it shows how developing economies have been able to tap into a significant car sales market that is available in Australia. This equates to around 600,000 new car sales being imports. If this were 600,000 new car sales for Australian manufactures there would be no conversations being had about trying to save our auto industry.

Reading the letter in this post about getting smarted and developing with technology makes sense if a business case can be made. Why shouldn't we compete with other countries and use our abundant resources and skills and jump ahead of the game. There would be an initial cost outlay no question however the rewards could mean a bright future for Ford, Holden and Toyota and in the end create a much leaner and meaner car industry that could easily compete in the domestic and export markets.

Or should we just let the naysayers control our future manufacturing destiny. There is a balance that should/must be struck between import restriction and free trade and it must be on a level playing field. This letter highlights a need for technological improvement in the Aussie auto industry. Money that has been set aside to keep these companies afloat or for so called 'green' innovation should be pushed into these areas as technological advancement in these areas will filter into others across the manufacturing spectrum. Money worth investing I say unless we want to resign ourselves to being a future third world economy.

Come on Aussie !!

[superyob]

Originally Posted by 2011G6E

Ah yes, the golden days before the Button Plan...bring 'em back I say! Then we can go back to shoddily built lazily designed local cars because the makers know that they will always be protected by the government from the big bad world outside our borders...selling whatever dreck they dish out to a captive audience who doesn't know any better.

Except now the audience does know better...they know what they've been missing out on. I imagine some of you would be old enough to remember the seventies and the first time you either bought or went for a ride in a friends or family members "funny foreign car", and been amazed at the standard features...disc brakes, AM/FM stereo, rear window demister, air conditioning, cloth interiors...they seem simple things now, but back then they were options on Australian cars, and the cheap stuff that people bought just didn't have what foreign cars had as standard. The makers here didn't have to try harder, as they assumed they would always be protected by tariffs and taxes.
Sometimes...even today with the FG when compared to overseas cars...the foreign competition has features that simply don't exist in our home grown big sedans.

Strongly protecting our industry to force people to buy Australian cars like "the good old days"...?

Be careful what you wish for..

What was so bad about our locally built cars in the 60s and 70s? It seems to me that they were far superior than an equivalently priced import...

A Mazda 929 superior to a Holden V8 Vacationer? Just because the 929 had a higher level of factory fitted goodies does not make it a better car. In making that comparison, you left out ride quality and interior space and other important considerations that cannot be overshadowed by aircon and 4 speakers... also, a floor shifter would be a tad impractical in a 6 seater wagon...

[ebxr8240]

Originally Posted by superyob

What was so bad about our locally built cars in the 60s and 70s? It seems to me that they were far superior than an equivalently priced import...

A Mazda 929 superior to a Holden V8 Vacationer? Just because the 929 had a higher level of factory fitted goodies does not make it a better car. In making that comparison, you left out ride quality and interior space and other important considerations that cannot be overshadowed by aircon and 4 speakers... also, a floor shifter would be a tad impractical in a 6 seater wagon...

Exactly ..
How would the 626 go towing a caravan or horse float ??
Ahh yes it doesn't matter the 4 speaker system will make up for that !!!

[2011G6E]

Horse float or a big caravan?

People don't automatically go for a V8 Falcon or Holden to do that anymore...because of the wide range of vehicles available to us, people go for four wheel drives to do that. Virtually no one buys a Falcon with the express purpose of pulling a double horse float or a 25 foot caravan to go around Australia. We live right on the "migration route" of the grey nomads, as well as horse floats going back and forwards all the time from the coast inland for race meetings/rodeos and the other way as well. I could count on one hand the number of times I've seen a new Falcon towing a big van (or any sized) van or horse float.

The market years ago for towing vehicles was made up of clunky four wheel drives for enthusiasts or the man on the land, and "normal" sedans and wagons. If people in the towns and cities wanted to do a lot of things, they'd choose a Falcon or Holden wagon, and tow things and travel in it.
Now we have a huge choice of types of vehicles, and people no longer feel they "need" to buy a big Australian sedan to "do everything". They look for a specific vehicle to suit their needs...part of this is the rise of the mid sized SUV as an extremely popular family car.

If we threw up the protection barriers to foreign built cars, how do you change the public wanting a huge range of vehicles, when the majority of what "Australian car makers" sell isn't even built here? Try standing up before the world trade organisations and saying "We want protection from foreign built cars...erm...except for this one, and that one, and that one there...but keep all the others out!".

Won't happen. can't happen. If Australia tried to strongly protect itself, it would suddenly find retaliatory strikes against our exports with restrictions and taxation on the other end.

Anyone who thinks we are a big bad important country is sadly mistaken...we're tiny, we have less people than a lot of large cities overseas, and we don't really matter...the world can do without us. China and India love our coal for example, but they have plenty of their own...they just prefer to do business with a nice stable country like Australia. They could, with a little effort, just stop buying our stuff altogether and it wouldn't trouble them...but it would sure trouble us.

Wishing for a compliant public who won't look beyond a Falcon or Commodore is foolish...people now know better and have had decades of exposure to frankly better featured cars from overseas, and if you tried to cut that choice back, they'd bite back even harder against the local stuff in retaliation.

[mik]

Originally Posted by superyob

What was so bad about our locally built cars in the 60s and 70s? It seems to me that they were far superior than an equivalently priced import...

A Mazda 929 superior to a Holden V8 Vacationer? Just because the 929 had a higher level of factory fitted goodies does not make it a better car. In making that comparison, you left out ride quality and interior space and other important considerations that cannot be overshadowed by aircon and 4 speakers... also, a floor shifter would be a tad impractical in a 6 seater wagon...

Exactlly, if my memory serves a lot of those early imports regardless of a few extra trinkets in many ways were not a patch on our local cars anyway, I would happily have a local car from the past as a daily today than one of those other shitboxes.

[BHDOGS]

I can see the headline now "Ford leaving saves holden" the ultimate self sacrifice another victory for ford all hail the great and power ford now lets say 30 hail fords. And pass the collection plate for holden

[Lotte]

Bill is switched on. Don't know him myself, but I know people who work for SAE.
Better late than never I suppose. Fingers crossed it filters into Ford reconsidering staying/gov co convincing them to stay/some other scenario where they don't leave.

[ebxr8240]

As in before the financial crisis.. Ford was one of the FIRST to do something about its position !!
Could be what's going on here?? After all I doubt Holden is going to make money selling cars people don't want in masses..If they can import much cheaper then there's every chance they'll do ok..Governments the last 30 years don't care about local industry..

[mik]

Its a nice idea he has, but theres about 4 times as many germans to buy golfs locally than there is here, and I wonder if the germans have a fair trade agreement that shoots their industry in the foot?? As for robots my bet is they cost a packet to implement and a lot in energy to run.

[Moby Vic]

All hail robots!

[M&Ms]

Population keeps growing, yet technology and globalisation causes us to rely less and less on physical human input. When will it all end!! Are we all going to become beggers on the street one day, or slaves for the top 2% of society???

[rdmr]

We have a FTA with Thailand that is CLEARLY, PLANLY and OBVIOUSLY destroying an Australian industry and costing thousands of jobs and with it throwing many lives into turmoil.
And what is the Australian government doing?
******* nothing!
Sickens me beyond words.

[stevz]

Originally Posted by rdmr

We have a FTA with Thailand that is CLEARLY, PLANLY and OBVIOUSLY destroying an Australian industry and costing thousands of jobs and with it throwing many lives into turmoil.
And what is the Australian government doing?
F#+@*&g nothing!
Sickens me beyond words.

I absolutely despise the government and believe they have a lot to answer for, but we cannot just sit back and blame the government and wait for them to do something about it.
IT IS UP TO THE AUSTRALIAN CONSUMER TO DO SOMETHING ABOUT IT BY REFUSING TO BUY IMPORTED VEHICLES, SPECIFICALLY THOSE FROM THAILAND.
THERE IS NO POINT WHINGING ABOUT THE SITUATION THEN GOING OUT AND BUYING A THAI BUILT VEHICLE AND SUPPORTING THE VERY FTA YOU ARE WHINGING ABOUT.

WHEN ARE AUSTRALIANS GOING TO WAKE UP????

[DJM83]

Originally Posted by stevz

I absolutely despise the government and believe they have a lot to answer for, but we cannot just sit back and blame the government and wait for them to do something about it.
IT IS UP TO THE AUSTRALIAN CONSUMER TO DO SOMETHING ABOUT IT BY REFUSING TO BUY IMPORTED VEHICLES, SPECIFICALLY THOSE FROM THAILAND.
THERE IS NO POINT WHINGING ABOUT THE SITUATION THEN GOING OUT AND BUYING A THAI BUILT VEHICLE AND SUPPORTING THE VERY FTA YOU ARE WHINGING ABOUT.

WHEN ARE AUSTRALIANS GOING TO WAKE UP????

When will you wake up is the big question. Again you have a go at ppl buying imports but you don't buy new Aussie cars, or a new car at all. Double standards much?

If oz had something that suited me I'd buy it no doubt.

[Wretched]

Originally Posted by DJM83

When will you wake up is the big question. Again you have a go at ppl buying imports but you don't buy new Aussie cars, or a new car at all. Double standards much?

If oz had something that suited me I'd buy it no doubt.

I think instead of also ramming it down people's throats, why not identify WHY people are buying these imports? What is it that they have over the Falcon's and Commodores that people want?

If it is that many people changing over then there has to be a reason behind it.
If the locals were that good they would sell on their own.

Oh and didn't Ford at one stage build a small car here? Soooo is it really the public's fault that Ford closed it's doors or just poor market insight by a 110 yr old car maker?

[mik]

2011g6e not only do we lose car makers, we lose value in technology developed here, we lose employment across the board, we become more dependant upon other countries for goods we can and should be making here , and apart from every thing else, it is wrong on principle to throw our own industry away due to poor trading deals that benefit countries other than our own.
as for the being clever thing i`m betting if we had a real clever and honest fair trade deal between countries our car industries would be kicking on without needing handouts.


Uberknee, i don't think that is the general consensus at all, i think the general consensus is that most just want a fair trading deal....as it should be.

[jpd80]

Bottom line, our Australian auto manufacturing industry has been thrown under a bus because
people want cheap imported vehicles and don't want to support Australian made anymore..

That was in essence the effect of the Button Plan and elimination of Tariffs, Ford and Holden
were mortally wounded years ago, it's just that we never realised it until now...

[UberKnee]

Originally Posted by mik

you might be right, but it doesn't seem that way, and what about the rest of the world ???

Just seems like a case of grass is always greener on the other side; Australia isn't 'flooded' by different car makes anymore than any other country. Manufacturers/models that only build LHD are unavailable here outside of select importers and then they cost 2 or 3 times more than they're worth/would sell for her otherwise.

A basic Mercedes/BMW/Audi/etc. that sells for peanuts everywhere else is a $100k+ here which keeps it out of most peoples reach.

Overall the biggest sellers here are generally Ford/GM/Toyota/Nissan/Mazda with everyone else selling in small volume.

So local manufactures still have plenty of opportunity, you look at America where typically Pontiac/Chevy/Ford/Dodge/BMW/Mercedes/Jaguar and several others are all the big volume players.

America has a flooded market, every manufacturer in the world sells there yet its still the American brands that sell the biggest due to building the right cars/advertising/etc.

Australia really doesn't have it that bad, most of these cars supposedly 'flooding our markets' are priced for footballers, not the average buyer.

The way to save local manufacturing is not by making life harder for imports but by local manufacturers building cars that are relevant to the times. 400kw GTS's and blown GTs might appeal to performance enthusiasts by the average buyer either doesn't care or it just ins't practical enough for a modern day family. Rather than focusing on the near dead large car market focus on SUVs that out sell them hand over fist.