The Australian car industry will not survive the downturn, expert says

[DanielXR8]

From news.com.au. I think what he is saying is certainly possible and it would be naive to say it couldn't, but it would have been nice if the reporter had asked some other industry pundits like part suppliers and ex auto executives to comment on this for some more balanced thoughts to go with the headline.

Dan

The Australian car industry will not survive the downturn, expert says

AAP

April 14, 2009 07:27am
AUSTRALIA'S car industry will not survive the economic recession, and Holden will probably be the first to go, an industry expert says.

Editor of the car buyers Dog & Lemon Guide, Clive Matthew-Wilson, said the Australian car manufacturer is poised to shut down for good because it can no longer compete in the global market.

Holden signalled the beginning of the end when it recently halved production at its South Australian plant, he said.

In early April the company announced that from May 4 it will reduce production at its Adelaide plant from about 600 vehicles a day to 310, citing reduced demand in domestic and export markets.

"Australia's car factories are losing money on every vehicle they make," Mr Matthew-Wilson said in a statement.

"No amount of incentives from the state and federal governments can solve this basic problem.

"It's not a matter of whether they close down, but when they close down."

He said Holden will be the first to go, followed by Ford and then Toyota.

"People falsely believe that Ford is doing okay. That's not true," he said.
Related Coverage

* Reader's Comments: Holden is doomed, says expert - The Courier-MailCourier Mail,
* Federal fleet car shockHerald Sun, 6 Apr 2009
* Obama axes GM boss, but hope for HoldenHerald Sun, 2 Apr 2009
* Toyota to build 4WD in AustraliaNEWS.com.au, 4 Mar 2009
* Rudd ads smile through job cutsThe Australian, 28 Jan 2009

"American Ford's sales are down 43 per cent in the first quarter of this year.

"Ford is losing billions just like GM; it's just that Ford arranged private sector finance before the recession, so it's not quite so obvious how serious things are."

Amid the financial turmoil, the big three US car makers - Ford, Chrysler and Holden owner General Motors - have asked the US government for a loan guarantee of $US25 billion ($37.51 billion).

Earlier this year Toyota, the world's No.1 car maker and Australian market leader, accepted a $35 million federal government grant to build a hybrid version of its four-cylinder Camry sedan in Melbourne from 2010.

But Mr Matthew-Wilson said the money is a waste.

"Globally, there's a glut of new cars at bargain prices, yet Australia, which produces a small number of high cost cars, is trying to compete with countries like China, which produces ten million cars a year and pays its car workers as little as one dollar per hour.

"The Australian government can throw $6 billion or $600 billion at these car plants, but they still won't be economically feasible," he said.

"Australia's car plants are losing money faster than a drunk at a casino and there's no feasible way of turning this around.

"The Australian car industry can re-focus on small cars, green cars, blue cars or red cars. None of this will make the slightest difference."

Mr Matthew-Wilson believes the government money would have been better spent by giving it to the affected car workers.

[banarcus]

Yep, thats about it in a nutshell.

[ltd]

The expert is from the so called Lemon guide, and he ommitted the fact that Ford do not want the bailout cash from the US Treasury. Some journalists are lazy, and Ford is hitting the top of their quality surveys in the US whilst only producing cars once they have a buyer. This idiot of an editor of some obscure little publication should be more worried about his own job than that of Ford; to quote the great Eric Cartman - "He can suck my Balls"

[GS608]

things would start to turn around if they introduce higher tariffs on imported cars instead of reducing them, its the only way Holden, Ford and Toyota will keep building cars here.

[cob115]

give it a few years and nothing will be left,how can you compete against wages,etc from china,india,you cant ,i hate to think about it but its hapening now

[duaned]

All I can say is go out and splurge on a new aussie made car now, before they are gone for good!

[Road_Warrior]

This guy is a first class douche, and he has conveniently ignored the small car plans that both Holden and Ford are about to start on. In fact, they've already started on.

[T3ts50]

So if the Australian factories close down, will the Government reduce tariffs on imported cars?

[Bossxr8]

How is an editor of a crappy lemon guide somehow an industry expert?

And then he says that the government would be better off giving the money to the workers. What, so they can go on the dole que, pay no taxes, the companies pay no business taxes, no GST, no stamp duty, no R&D expenditure, the closure of suppliers and all their workers on the dole que, the loss of jobs at business who provide uniforms, food etc.

Sounds like a great idea moron. It would probably end up costing the government more money in the long run through less tax and having to pay the unemployed workers dole money. :

I guess we don't need the 2nd biggest export industry in Australia because we have minerals right, isn't that going great. Not only are the losing business hand over fist they are starting to get bought out by Chinese firms who will send the profits back to China. Man this country is going down the tubes.

[paulvdb]

Originally Posted by Bossxr8

How is an editor of a crappy lemon guide somehow an industry expert?
.

Go and look him up on google - hasn't had a solid job in his life, no real education to speak of, very limited automotive experience. "A Genuine Expert" - with his right hand anyway !!

I'm sick of the pseudo-automotive press publishing rubbish from guys like this and killing the automotive industry. One article won't make a lot of difference but repeated articles will. If all the mums and dads start reading every week that Australian cars are gone, then they will be. That's how people's minds work.

[XplosiveR6]

Originally Posted by cob115

give it a few years and nothing will be left,how can you compete against wages,etc from china,india,you cant ,i hate to think about it but its hapening now

Of course you can compete, Using up to date technologies such as smart highly automated production lines which Chinese factories could only dream about. Reducing low skill jobs and replacing them with high skilled jobs such as robotics engineers, electrical/electronic engineers etc.

Gone are the days when you can expect to make a living from dropping out of school at year 10 and doing rote, brain-dead work all you're life.

[zetec]

Originally Posted by XplosiveR6

Gone are the days when you can expect to make a living from dropping out of school at year 10 and doing rote, brain-dead work all you're life.

This "expert" has.

[FalconXR6]

Looking to make some spare cash?
Simple!
Write an inaccurate, uninformed article about the Australian automotive industry, submit it to an online newspaper and BAM - get paid for doing it!!!

[Cookie-XR8]

all a expert is

x is unknown amount, and a spert is a large drip under pressure

only time will tell whats going to happen

[RG]

I love it, people bagging out a so called expert for having limited knowledge while drawing their own conclusions on the situation despite having no more knowledge themselves.

Irony much?

[Dave_au]

Originally Posted by RG

I love it, people bagging out a so called expert for having limited knowledge while drawing their own conclusions on the situation despite having no more knowledge themselves.

Irony much?

Yeah FFAU is reknown for knee-jerk reactions. The above expert may be corect on Ford's global financing position (private sector debt financed for mid term periods prior to the downturn) and the fact that Ford has also been living off the proceeds from sale of some of its brands (Jaguar, Land Rover, Aston Martin).

Had it not been for these sales, and when the private sector debt was negotiated, Ford would probably be in the same boat as GM and Chrysler.

[Ohio XB]

Originally Posted by XplosiveR6

Of course you can compete, Using up to date technologies such as smart highly automated production lines which Chinese factories could only dream about. Reducing low skill jobs and replacing them with high skilled jobs such as robotics engineers, electrical/electronic engineers etc.

Gone are the days when you can expect to make a living from dropping out of school at year 10 and doing rote, brain-dead work all you're life.

Don't fool yourself. There are automotive factories in China right now that have more advanced technology than the Ford plant I work at in Ohio, USA. There are plants there with as many, or more, robots assembling cars in the body shop as you will find in a US plant. It just depends on the car company and who they are in business with, besides the government.

Add to that the $1/hour wage, no retirees, and who knows if there are any benefits, and the comparison becomes obvious. This is another reason so many Americans are concerned about the WTO and "Free Trade" that is not "Fair Trade". How can a country (US or Australia) compete with such a low standard and cost of living country? Its not possible when the equipment used by both is equal.


BTW, I think this reporter is a tool too.


Steve

[Burnout]

Hereunder layes an a seemingly more accurate description of this bloke:

http://en.wikipedia.org/wiki/Clive_Matthew-Wilson

[SB076]

Originally Posted by Ohio XB

Don't fool yourself. There are automotive factories in China right now that have more advanced technology than the Ford plant I work at in Ohio, USA. There are plants there with as many, or more, robots assembling cars in the body shop as you will find in a US plant. It just depends on the car company and who they are in business with, besides the government.

Add to that the $1/hour wage, no retirees, and who knows if there are any benefits, and the comparison becomes obvious. This is another reason so many Americans are concerned about the WTO and "Free Trade" that is not "Fair Trade". How can a country (US or Australia) compete with such a low standard and cost of living country? Its not possible when the equipment used by both is equal.


BTW, I think this reporter is a tool too.


Steve

Occasionally I met comissioning agents (people that are sent over seas to supervise, install and train on new plant and equipment) They say similiar things (that advanced automation equipment is already over there) Both Oz and the States need manufacturing to survive in both our countries to ensure employment and skills for future generations

[gtfpv]

where are all the people here telling everyone all is fine , because they have a job, a few investment properties and work hard .

[RATT]

A nice little earner for him having his article published on the news website...
Yes it is tough, but with a solid (Ford) Focus export program as well as reasonable local sales, Ford Au will survive. Holden became too dependent on exports which required a big investment to sustain it.
The industry is too valuable to the country for it to disappear.
As we all know, the jobs and expertise are priceless to Australia.

[Burnout]

Originally Posted by Ohio XB

Don't fool yourself. There are automotive factories in China right now that have more advanced technology .......................

I know a bloke over there, he's in partnership with locals.... tells me Chinese Universities graduated 5 million engineers at the end of 2008.

Just think on that for a moment or two.

[FalconXR6]

Originally Posted by RG

I love it, people bagging out a so called expert for having limited knowledge while drawing their own conclusions on the situation despite having no more knowledge themselves.

Irony much?

Difference is we don't get paid to draw our own conclusions, nor do we report on them for mainstream media distribution. Nor is it our proffession - unlike the reporter in question...

[flappist]

If you would like to see high tech plants, look an the VW one in China and the Ford one in Brazil.

The Aussie car industry cannot be destroyed by this little hickup, it was destroyed in 1987 and befor that it was destoyed in the late 70s and before that it was destroyed in the 60s.

Doom and gloom always sell newspapers.

I have the perfect cure for this whole problem.

If everyone in Australia stopped advertising in the newspapers and on radio and TV to save money because of the "world economic crisis" suddenly it would be gone and the media would be full of "recovery stories" and good news and happly little vegemites.....

And then this totally imaginery manufactured crisis would just go away....

[Luke Plaizier]

He is a little bit right - about the cost of labour that is.

The Australian Government enforces the Award Wages scheme on Australian employers, to ensure that all Australians are paid a minimum wage.

But items that are imported into Australia are not regulated by these same laws. I too would move my factory to another country - why wouldn't you?

A solution to this could be that any company that import goods and services into Australia should be forced to demonstrate that they have paid their employees the minimum Australian award wage.....but it's not like that's ever going to happen now is it.

How about this one. We need for Earth to be attacked by Aliens, forcing us to all unite against a common foe, and form a single worldwide government. Maybe then we could have a way for globally enforcing a minimum wage.....that seems more realistic don't you reckon?


Lukeyson

[dave289]

Like others have mentioned you cannot compete with chinese when it comes to production costs(anybody who thinks you can is dreaming).This to me is why the world economy is now stuffed.thankyou china. We should ban all cars coming from china and korea for a start,they are helping to kill the australian car market and the economy, we already have enough jobs going overseas (this is another thing that should be banned and I'm sick of it). Everytime I ring optus I get someone from manilla answer the phone, so their paying these people peanuts and still charging us a fortune. We should increase taxes on overseas imports to subsidise the australian car market. If the australian car market goes so many jobs will be lost it is behond comprehension. The government needs to do the right thing by australians but once again they are shittting on themselves and us. So to look at it this way it is not a matter of if the australian car market will die but when. Thanks again to the government we are going to be screwed. While I am on a roll we should sack about 2/3 of politicians as we dont need them ,they make wrong decisions and get paid a fortune for doing so. This is another rort killing australia that should be stopped, is this a dictatorship or a democracy, they dictate their wage and constant crap yet we dont get a say. So yes while the government keeps making the decisions the australian car market seems to be doomed. They went and gave 35 million to toyota but not to ford or holden, so it looks like they are helping to kill the australian car market in more ways than one. I would say in the next couple of years, it will be the beggining of the end for the aussie car market, or is that already here . Sorry to sound so gloomy and I dont like it anymore than you but if you look hard enough you will see the reality.

[Daymoe]

Originally Posted by dave289

Like others have mentioned you cannot compete with chinese when it comes to production costs(anybody who thinks you can is dreaming).This to me is why the world economy is now stuffed.thankyou china. We should ban all cars coming from china and korea for a start,they are helping to kill the australian car market and the economy, we already have enough jobs going overseas (this is another thing that should be banned and I'm sick of it). Everytime I ring optus I get someone from manilla answer the phone, so their paying these people peanuts and still charging us a fortune. We should increase taxes on overseas imports to subsidise the australian car market. If the australian car market goes so many jobs will be lost it is behond comprehension. The government needs to do the right thing by australians but once again they are shittting on themselves and us. So to look at it this way it is not a matter of if the australian car market will die but when. Thanks again to the government we are going to be screwed. While I am on a roll we should sack about 2/3 of politicians as we dont need them ,they make wrong decisions and get paid a fortune for doing so. This is another rort killing australia that should be stopped, is this a dictatorship or a democracy, they dictate their wage and constant crap yet we dont get a say. So yes while the government keeps making the decisions the australian car market seems to be doomed. They went and gave 35 million to toyota but not to ford or holden, so it looks like they are helping to kill the australian car market in more ways than one. I would say in the next couple of years, it will be the beggining of the end for the aussie car market, or is that already here . Sorry to sound so gloomy and I dont like it anymore than you but if you look hard enough you will see the reality.

Instead of increasing tax on cars made in other countries, how about the government subsidises Australian cars? So they have competitive prices?

[dave289]

Originally Posted by Daymoe

Instead of increasing tax on cars made in other countries, how about the government subsidises Australian cars? So they have competitive prices?

This is basically what I am saying but to subsidise something you need to take it from somewhere else so thats why I said to increase the taxes on imports as the subsidise,where else are you going to take the money from, are you a politician?

[Daymoe]

Originally Posted by dave289

This is basically what I am saying but to subsidise something you need to take it from somewhere else so thats why I said to increase the taxes on imports as the subsidise,where else are you going to take the money from, are you a politician?

Where else am I going to get the money from?

YOUR WALLET.

If you cared so much about Australian jobs, then I'm sure you wouldn't mind paying some extra taxes to keep others like yourself in a job.

[dave289]

Originally Posted by Daymoe

Where else am I going to get the money from?

YOUR WALLET.

If you cared so much about Australian jobs, then I'm sure you wouldn't mind paying some extra taxes to keep others like yourself in a job.

glad your not in charge. and dont worry we will all be paying extra taxes before to much longer, how else will the country survive.strap yourselves in and enjoy the ride.