Comment from Kim Carr - Auto industry woes

[bobthebilda]

=Road_Warrior;4694760]A bit of context, by Remy Davison.
However, as Kim Carr noted recently, the industry, cumulatively, received subsidies amounting to less than $18 per person over the last decade. So it cost you, the long-suffering Australian taxpayer, the princely sum of $1.80 per annum to prevent the collapse of plants like Elizabeth, Fishermans Bend, Altona, Geelong and Broadmeadows

I assume, neither Kim Carr or Remy Davison have a PhD in mathmematics (or basic knowledge). Reports over the last week have revealed Holden, Ford and Toyota have received approx. $4 billion over the last 12 years. $4 billion / 12 years / 22 million people = the sum of $15.15 per year per person (not the $1.80 as stated above). And thats what they got. For every dollar that Holden, Toyota or Ford got, their suppliers got alot of money too. It would probably be around $50 per person per annum.

Then people start making comparisons to other countries - and they tend to use different comparisons. They include US money that was given to GM to bail it out (the US took an equity stake in GM, it wasnt money thrown at GM never to get a return (altho they got less than put in)). They include German states equity in BMW etc (once again an equity stake). If the Governments of Australia had saved all the money they have given to the car companies over the last 12 years, the government could own approx. 25% of GM right now. Thus instead of being in charge of a 220,000 per year car industry, they could be in control of 25% of GM's 8 million cars they make each year (2 million cars).

And they make other comparisons, but they make it on a per capita basis, and not a cars made per year per person. Australia makes 220,000 cars a year, with a population of 22 million. The US makes 40 times more cars a year, with 15 times the population. Japan makes 40 times more cars each year, with 6 times the population.

Didnt Kim Carr recently lose his position in the ministry because he and his team couldnt get the numbers right lol

[turbodewd]

Bob,

suppose we close the local manufacturers today. If Australia then has to import those 220,000 vehicles thats going to send $5.5 billion dollars overseas ($25,000 per car x 220,000), every year.

Sounds like the sums do add up to supporting this industry if it will keep $5.5billion at home!

[Charliewool]

How true.....
"Australia has first-rate engineers and builds world-quality suspension and braking systems, develops advanced composites and innovative alloy technologies.

Australia also builds second-rate cars. It has a third-rate managerial class and fourth-rate governments".

[tweeked]

Originally Posted by bobthebilda

I assume, neither Kim Carr or Remy Davison have a PhD in mathmematics (or basic knowledge). Reports over the last week have revealed Holden, Ford and Toyota have received approx. $4 billion over the last 12 years. $4 billion / 12 years / 22 million people = the sum of $15.15 per year per person (not the $1.80 as stated above). And thats what they got. For every dollar that Holden, Toyota or Ford got, their suppliers got alot of money too. It would probably be around $50 per person per annum.

Then people start making comparisons to other countries - and they tend to use different comparisons. They include US money that was given to GM to bail it out (the US took an equity stake in GM, it wasnt money thrown at GM never to get a return (altho they got less than put in)). They include German states equity in BMW etc (once again an equity stake). If the Governments of Australia had saved all the money they have given to the car companies over the last 12 years, the government could own approx. 25% of GM right now. Thus instead of being in charge of a 220,000 per year car industry, they could be in control of 25% of GM's 8 million cars they make each year (2 million cars).

And they make other comparisons, but they make it on a per capita basis, and not a cars made per year per person. Australia makes 220,000 cars a year, with a population of 22 million. The US makes 40 times more cars a year, with 15 times the population. Japan makes 40 times more cars each year, with 6 times the population.

Didnt Kim Carr recently lose his position in the ministry because he and his team couldnt get the numbers right lol

Ok so lets say they had killed the industry 12 years ago. 45,000 workers http://www.fapm.com.au/Autoindustry/...U/Default.aspx x an ave of say $60000 p/a means 2.7 billion a year or 25 billion of wages being replaced with dole queues. There goes your chance of buying a bit of GM. I dont want to live in Bobthebildaland

[In Focus]

Originally Posted by tweeked

Ok so lets say they had killed the industry 12 years ago. 45,000 workers http://www.fapm.com.au/Autoindustry/...U/Default.aspx x an ave of say $60000 p/a means 2.7 billion a year or 25 billion of wages being replaced with dole queues. There goes your chance of buying a bit of GM. I dont want to live in Bobthebildaland

You're assuming that none of those workers would have jobs elsewhere for 12 years?

[bobthebilda]

Originally Posted by turbodewd

Bob,

suppose we close the local manufacturers today. If Australia then has to import those 220,000 vehicles thats going to send $5.5 billion dollars overseas ($25,000 per car x 220,000), every year.

Sounds like the sums do add up to supporting this industry if it will keep $5.5billion at home!

Umm its a different arguement, but fails for anumber of reasons anyhow. We export approx 100 -120,000 of the cars made here, so we would only have to import circa 110,000 to replace the cars for the locals. And since the standard car made in Australia consists of 30% of imported parts (up to 60% for the cruze), then your sums become even more questionable.

tweeked: Ok so lets say they had killed the industry 12 years ago. 45,000 workers http://www.fapm.com.au/Autoindustry/...U/Default.aspx x an ave of say $60000 p/a means 2.7 billion a year or 25 billion of wages being replaced with dole queues. There goes your chance of buying a bit of GM. I dont want to live in Bobthebildaland

I do recall seeing an article on news.com.au yesterday about Holden giving career advice to others that were made redundant, that they can become hairdressers, gardners, care workers. And the Union saying this was demeaning to the the highly skilled workers. Looks like Holden was being generous, for you seem to think that these people would have been unemployed for 12 years if they werent employed on the car lines. And just for the record, the three manufacturers and their australian suppliers do not employ 45,000 people to make these cars (the article states the automotive manufacturing sector). If they did, they would be spending $2.7 billion on wages (as you say) making 220,000 x $25,000 = $5.5 billion of cars. Wage figures like that in the manufacturing sector, are enough to destroy it.
The automotive manufacturing sector, consists of alot more businesses than ford,holden, toyota and their suppliers (and its only these companies which do get governemnt assistance). Theres alot of other companies like ARB etc, which are classified as being in the auto manufacturing sector, that also export, do not get governemnt assistance, and keep profits in Australia.

[mik]

So Bobthebuilda, you are saying that for australians to put in the contribution of 2 hamburgers per year that is just too much of a sacrifice ? Know this, IF YOU EVER GET INTO POLITICS I WON.T BE VOTING FOR YOU !

[turbodewd]

ARB products arent super high value nor super complex elaborately-transformed-manufactures (ETMs).

Just under 5% of our imports are autos which is our 3rd largest import segment

http://www.dfat.gov.au/publications/...ot-cy-2011.pdf

It is a valuable industry to be in, certaintly not at ANY cost, but as long as the various levels of government also buy local then the whole industry makes sense.

While youve got everywhere other than SA and Vic buying locally youre undermining the federal support grants. (SA and Vic have AU-made purchasing policies)

https://www.vicfleet.vic.gov.au/CA25...hicle-policies

[Resurrection]

Falling sales lead to
Falling profits lead to
Reduction in future production development which leads to
Less appealing products and puts us back to the first line

This is a vicious cycle.

[FGX-351]

I realise the link i'm providing is political in nature but after being questioned on his policies towards supporting our auto industry Tony Abbott goes on to say he personally owns a Ford Territory & is arguably the best car ever made in this country which should be exported.

Territory comments start at 11:05, plus questions on local Ford and Holdens as Government cars afterward.

http://www.youtube.com/watch?v=SwonvpufBr8

Ford use this for marketing!

[Bill M]

Originally Posted by bobthebilda

I assume, neither Kim Carr or Remy Davison have a PhD in mathmematics (or basic knowledge). Reports over the last week have revealed Holden, Ford and Toyota have received approx. $4 billion over the last 12 years. $4 billion / 12 years / 22 million people = the sum of $15.15 per year per person (not the $1.80 as stated above). And thats what they got. For every dollar that Holden, Toyota or Ford got, their suppliers got alot of money too. It would probably be around $50 per person per annum.

Then people start making comparisons to other countries - and they tend to use different comparisons. They include US money that was given to GM to bail it out (the US took an equity stake in GM, it wasnt money thrown at GM never to get a return (altho they got less than put in)). They include German states equity in BMW etc (once again an equity stake). If the Governments of Australia had saved all the money they have given to the car companies over the last 12 years, the government could own approx. 25% of GM right now. Thus instead of being in charge of a 220,000 per year car industry, they could be in control of 25% of GM's 8 million cars they make each year (2 million cars).

And they make other comparisons, but they make it on a per capita basis, and not a cars made per year per person. Australia makes 220,000 cars a year, with a population of 22 million. The US makes 40 times more cars a year, with 15 times the population. Japan makes 40 times more cars each year, with 6 times the population.

Didnt Kim Carr recently lose his position in the ministry because he and his team couldnt get the numbers right lol

"For every dollar that Holden, Toyota or Ford got, their suppliers got alot of money too. It would probably be around $50 per person per annum."

What are your sources for the extra $34.75? That's a helluva big jump!
The component suppliers get this? I worked for a component manufacturer and there was nothing like that on offer. You accuse Kim Carr and Remy Davison of rubbery figures but yours don't stack up.
When you use the word "probably" it means you don't know!

[bobthebilda]

Originally Posted by Bill M

"For every dollar that Holden, Toyota or Ford got, their suppliers got alot of money too. It would probably be around $50 per person per annum."

What are your sources for the extra $34.75? That's a helluva big jump!
The component suppliers get this? I worked for a component manufacturer and there was nothing like that on offer. You accuse Kim Carr and Remy Davison of rubbery figures but yours don't stack up.
When you use the word "probably" it means you don't know!

Well, it used to be quite easy to calculate. Some of the larger suppliers, were / are listed on the asx (autodom/ Futuris auto (via elders), and list the government payments in the financial reports. Let me know who you worked for, and I'll do some searching.

[Bill M]

So the extra $34.75 is a guess? Either you made a calculation you based that figure on or you are guessing. Not a strong foundation for a point of view ridiculing others.

[bobthebilda]

Originally Posted by Bill M

So the extra $34.75 is a guess? Either you made a calculation you based that figure on or you are guessing. Not a strong foundation for a point of view ridiculing others.

No, based on a PriceWaterhouse analysis done a few years ago. If i can find it for you, I will attach it.

[Bill M]

Originally Posted by bobthebilda

Well, it used to be quite easy to calculate. Some of the larger suppliers, were / are listed on the asx (autodom/ Futuris auto (via elders), and list the government payments in the financial reports. Let me know who you worked for, and I'll do some searching.

No chance, that would be disclosing information that's commercial in confidence, career suicide.

I doubt very much you can find that sort of sensitive info specific to smaller supplier companies of which there are hundreds.
If you had based your figures on substantial research then I would be interested but it appears to be a superficial hash.
Bill.

[1TUFFUTE]

I hope all these slightly positive articles poping up aren't just pollies dipping their toes to make it look like they care to get the car lovers on board...because if they want to fix the industry long term here...its going to take a lot more then a couple of articles and positive spin up

[bobthebilda]

Originally Posted by Bill M

No chance, that would be disclosing information that's commercial in confidence, career suicide.

Bill.

Heres a link to autodoms last financial report (before it went into administration), from 23/10/2012

http://www.asx.com.au/asx/statistics...me=D&period=M6

Page 41 shows you an outstanding loan from the government of South Australia for $1.6 million dollars.

Page 29 & 40 detail the $2.2 million the company recieved in government grants from the Automotive Transformation Scheme and the Automotive Competition and Investment scheme in 2012

In the 2011 financial year, they received $3.9 million from the government under AISAP (page 15), $2.2 million under ACIS/ATS (page 40)

Over the two years that the financial report cover, Autodomn recieved $8.3 million in government grants (and interest free loan from south australia). Company sales to Holden accounted for approx. 40% of turnover. Holden effectively received that subsidy of $3.32 million over two years ($1.66 million per year). Just under 5% of this companys revenue came from government grants over a two year period (and it still couldnt make a profit)

Now, lets not let your inability to find basic information, or your somewhat miscontued belief that these government payments are commercial inconfidence, trouble me further. I will try to locate the PWC report (which explains it so much better).

[Bill M]

Originally Posted by bobthebilda

Heres a link to autodoms last financial report (before it went into administration), from 23/10/2012

http://www.asx.com.au/asx/statistics...me=D&period=M6

Page 41 shows you an outstanding loan from the government of South Australia for $1.6 million dollars.

Page 29 & 40 detail the $2.2 million the company recieved in government grants from the Automotive Transformation Scheme and the Automotive Competition and Investment scheme in 2012

In the 2011 financial year, they received $3.9 million from the government under AISAP (page 15), $2.2 million under ACIS/ATS (page 40)

Over the two years that the financial report cover, Autodomn recieved $8.3 million in government grants (and interest free loan from south australia). Company sales to Holden accounted for approx. 40% of turnover. Holden effectively received that subsidy of $3.32 million over two years ($1.66 million per year). Just under 5% of this companys revenue came from government grants over a two year period (and it still couldnt make a profit)

Now, lets not let your inability to find basic information, or your somewhat miscontued belief that these government payments are commercial inconfidence, trouble me further. I will try to locate the PWC report (which explains it so much better).

Sorry bobdebilda,
you are not comprehending the posts,

1. You have not shown any thing to bolster your claim on the $50.00 pp on subsidies.I suspect it is a wild guess.
2. Autodom is one company which is hardly representative of the financial statements of component suppliers in this country so my commercial in confidence comment stands.
3. Don't expect those who call you out to do your referencing for you, that is something you should have done before making unsubstantiated comment.
4. Google is not a substitute for insider industry knowledge.

The inability sir is yours.

[Buntz]

Originally Posted by turbodewd

If Europe's tariffs are 10%, then ours should be as well.

Ours should be more.

[turbodewd]

Buntz,

we should apply the Fair Go test. If the country of origin has a tariff of X then that tariff applies to their vehicles. If a country is advanced enough to make a car then they cannot expect special treatment by little ol' Australia.

[Brazen]

The best way to initiate change is direct email contact with Abbott and Gillard. The parties work on an assumption that for every email received there are potentially hundreds in the community who feel the same way. Getting even a few emails on the subject is enough to see this is an issue that will affect the most important thing of all to them.... Votes.

[DanielXR8]

Originally Posted by Road_Warrior

It's 50% for vehicles with an engine capacity over 3 litres.

50% tax on Thai built vehicles under 3 liters seems a fair swap. I imagine if our government had the guts to do it, this umm "tax issue" would be sorted quick smart and Territory's could be sold at more realistic prices in their market.

FTA's are fine, but you occasionally need to ensure the rules are being enforced fairly and to the original intention. Overseas counties know our pollies are a soft target, so hence how these taxes suddenly spring up. They know we won't do anything about it.

[Road_Warrior]

Originally Posted by DanielXR8

50% tax on Thai built vehicles under 3 liters seems a fair swap. I imagine if our government had the guts to do it, this umm "tax issue" would be sorted quick smart and Territory's could be sold at more realistic prices in their market.

FTA's are fine, but you occasionally need to ensure the rules are being enforced fairly and to the original intention. Overseas counties know our pollies are a soft target, so hence how these taxes suddenly spring up. They know we won't do anything about it.

Actually I was wrong. It is 80% for vehicles with an engine size over 3 litres, 50% for everything under.

[FPV GTHO]

I had the idea for something, that for now ill just call a competing industries tax. Basically anything that gets imported into the country, where we have a local industry doing the same product, receives this tax. If we don't produce the product it gets imported normally. It could work as a middle ground to protect all local industries, not just manufacturing, but also still allow competitive pricing on things we don't produce locally and of course may be an incentive to increase locally made goods.