The prolonged death of Australian Auto Manufacturing

[Crazy Dazz]

At the end of the day I can fully understand (although still mourn) the simple business decisions to cease manufacturing in a Australia.
I can also understand the decisions to cease production of the Falcon. A unique, limited market, low-volume car with falling sales. The Falcon has been fighting a losing battler for decades, because it doesn't make enough money to support redevelopment.

My gripe is HOW we got into this situation, and WHERE do we go from here.

Ford Australia COULD be building the Focus and Ranger here, and exporting them. But can't because the costs just don't stack up.

Australia is a huge exporter of iron-ore, bauxite, base metals, coal, and natural gas. It would be more efficient for us to make the steel and aluminium here and export that (not to mention better for the environment) but its too costly. The next logical conclusion is that we should also me making cars, white goods, and heavy machinery, but again too costly.
Where does it end? Look at any product, it can be made cheaper in China or Thailand. It won't be long before all our boats, caravans, trailers, etc are also made in Asia. We already export garbage for recycling. All those RO-ROs returning empty will soon be carrying "written-off" cars for repair and re-sale.
Large Accounting, Engineering, Architectural, and Legal firms already outsource work to India.
It's only a matter of time before health insurers figure out its cheaper to send patients to Malaysia for treatment.
Bank Branches already feature interactive teller machines where you pick up a phone and are guided through your process by someone in a call-centre.

30-40 years ago, Australian Universities were at the forefront of electronics and computer work. Now they don't even offer the courses because there is no demand in Australia.
And whilst for decades Australian Universities have been the destination of choice for (rich) Asian students, the trend is now reversing. You can now send your kids to Asia, to study in English-Only universities, and get internationally accredited degrees, for a fraction of the cost.

This isn't all gonna happen overnight, but it IS already happening.
Ironically, the worst thing for MOST of Australia will be if the mining boom kicks off again, as that will simply make our currency stronger.

The government needs to make fundamental changes to ensure that Australia develops and maintains the industries that we SHOULD have here.

[pottery beige]

have you been drinking

[Romulus]

I don't just see the Australian automotive sector going down the drain, but the economy as a whole. I'll expand on this later.

The death of the Australian automotive manufacturing can be blamed on many levels. Government, corporations and private buyers all share a portion of the blame. Several issues come to mind that I've discussed with a fleet purchaser from a government department here in WA. While the Federal Government was pumping hundred of millions of dollars into the automotive industry, state and local governments had no local content purchasing policies. Less than 20% of state/local government fleets are Australian made vehicles. Why didn't the Federal/State governments mandate a "buy local" policy? I see this as a large contributing factor to the decline in the Australian automotive manufacturing sector.

Ford's decision not to introduce a diesel Territory in 2004 and build the Focus in Australia sealed FoA's fate. Holden's continued policy of building junk sealed it's fate.

Australian's by-enlarge have no loyalty and don't give a shyte supporting local industry. As long as their purchasing decision doesn't affect their immediate financial position she'll be right mate. Selfish attitude.

I was speaking to a client a few months ago. He was of the opinion that Australia's economy will be comparable to a third world country in 30 years time. The continued protection of wages by successive governments has caused wages to be at artificially high rates. 2012 studies show Australia has the fourth highest pay rate in the World. This is simply unsustainable and is making our economy uncompetitive in the World. Don't believe me? Ford, GM, Toyota are closing shop. Business is outsourcing most services overseas. Qantas, ANZ, Westpac, NAB, Telstra etc all run call centers in Manila and Cebu, Philippines. India is doing very well from our high wages demand, Australian based companies have call centers in India too, at our expense.

Unless fundamental changes are made to our perception of what we expect and how we live the divide between the have's and the have-nots will increase. Australia is set for a tumultuous period ahead. Cut protectionism of wages. Let supply and demand set wage levels.

[MrEL]

Big business has to make things cheaper in Australia first so Australian wages can be cut.
People get too wrapped up in numbers.
If I could still live my current lifestyle while only taking home $300 a week Id be happy. I couldn't care less about the number.
But life has turned into a massive ****ing contest where everyone has to be earning more then each other.
Eventually it will fall over.

[93EB_SXR6]

...it's easy to second guess business decisions when your money isn't on the line...

[1TUFFUTE]

Originally Posted by 93EB_SXR6

...it's easy to second guess business decisions when your money isn't on the line...

Yeah tell that to the government employees.....the ones who let all this go on and do nothing......but they'll take all the pay rises tho(head smack aimed at the pollies...not 93ebsxr6)

[Franco Cozzo]

Originally Posted by F6 Concorde

state and local governments had no local content purchasing policies. Less than 20% of state/local government fleets are Australian made vehicles. Why didn't the Federal/State governments mandate a "buy local" policy? I see this as a large contributing factor to the decline in the Australian automotive manufacturing sector.

Old man works at Centrelink and in the last 6 months they enforced uniform on everyone, instead of having it made locally its been made in Indonesia, and their company cars are all imports.

Only Australian made piece of clothing I own is my AMWU T-shirt, go figure.

Government didn't support the locals, locals didn't support the locals.

I'm guilty of being in the position in the past to buy 2 new cars and none of them were locally made, but not everyone wants a large sedan.

Though before I bought the Focus in 2011 had my eye on this nice FG R6 Falcon ute, 6sp manual but the dealer didn't want to deal with me, got offered a lower price on a 6sp auto from a forum sponsor (same price my Focus cost me) but I didn't want an auto.

[Crazy Dazz]

Originally Posted by Big Damo

Old man works at Centrelink and in the last 6 months they enforced uniform on everyone, instead of having it made locally its been made in Indonesia, and their company cars are all imports.

Only Australian made piece of clothing I own is my AMWU T-shirt, go figure.

Government didn't support the locals, locals didn't support the locals.

I'm guilty of being in the position in the past to buy 2 new cars and none of them were locally made, but not everyone wants a large sedan.

Though before I bought the Focus in 2011 had my eye on this nice FG R6 Falcon ute, 6sp manual but the dealer didn't want to deal with me, got offered a lower price on a 6sp auto from a forum sponsor (same price my Focus cost me) but I didn't want an auto.

I've certainly been guilty. Look around my house and the only things made in Australia are the house, the AU, and the meat in the fridge.
We all buy cheap, and I'm not racist or xenophobic about this. If country X is better at producing thongs, and country Y is better at producing shirts, great. But WHERE does it end? WHAT are we better at producing? Iron Ore, Natural Gas, and Wheat?

[rdmr]

I think a thought provoking idea crazy dazz has that has some merit is the idea that hospital patients will be shipped off overseas for cheaper operations. Some people already do this but I can see this becoming a regular policy option in the future.

[Romulus]

Originally Posted by Big Damo

Old man works at Centrelink and in the last 6 months they enforced uniform on everyone, instead of having it made locally its been made in Indonesia, and their company cars are all imports.

Only Australian made piece of clothing I own is my AMWU T-shirt, go figure.

Government didn't support the locals, locals didn't support the locals.

I'm guilty of being in the position in the past to buy 2 new cars and none of them were locally made, but not everyone wants a large sedan.

Though before I bought the Focus in 2011 had my eye on this nice FG R6 Falcon ute, 6sp manual but the dealer didn't want to deal with me, got offered a lower price on a 6sp auto from a forum sponsor (same price my Focus cost me) but I didn't want an auto.

And the only ones that seem to jump up and down are the unions. Everyone is seeing what's going on, but no one is observing what's going on.

Obama introduced Buy American policy in 2009. It was labelled 'economic rationalism' but it helped the US economy. What is it that Australia did? Oh that's right, the government handed out $900 to every man and woman, whether or not they lived in Oz or were dead, so it could be spend on imported products.

[BENT_8]

Originally Posted by F6 Concorde

I don't just see the Australian automotive sector going down the drain, but the economy as a whole. I'll expand on this later.

The death of the Australian automotive manufacturing can be blamed on many levels. Government, corporations and private buyers all share a portion of the blame. Several issues come to mind that I've discussed with a fleet purchaser from a government department here in WA. While the Federal Government was pumping hundred of millions of dollars into the automotive industry, state and local governments had no local content purchasing policies. Less than 20% of state/local government fleets are Australian made vehicles. Why didn't the Federal/State governments mandate a "buy local" policy? I see this as a large contributing factor to the decline in the Australian automotive manufacturing sector.

Ford's decision not to introduce a diesel Territory in 2004 and build the Focus in Australia sealed FoA's fate. Holden's continued policy of building junk sealed it's fate.

Australian's by-enlarge have no loyalty and don't give a shyte supporting local industry. As long as their purchasing decision doesn't affect their immediate financial position she'll be right mate. Selfish attitude.

I was speaking to a client a few months ago. He was of the opinion that Australia's economy will be comparable to a third world country in 30 years time. The continued protection of wages by successive governments has caused wages to be at artificially high rates. 2012 studies show Australia has the fourth highest pay rate in the World. This is simply unsustainable and is making our economy uncompetitive in the World. Don't believe me? Ford, GM, Toyota are closing shop. Business is outsourcing most services overseas. Qantas, ANZ, Westpac, NAB, Telstra etc all run call centers in Manila and Cebu, Philippines. India is doing very well from our high wages demand, Australian based companies have call centers in India too, at our expense.

Unless fundamental changes are made to our perception of what we expect and how we live the divide between the have's and the have-nots will increase. Australia is set for a tumultuous period ahead. Cut protectionism of wages. Let supply and demand set wage levels.

Its a vicious circle and were stuck in it unless we see a recession or worse.
The cost of a roof over your head dictates that wages must increase beyond a sustainable level.
The employee at Ford, Holden NAB etc. etc. needs $30 an hour to conduct their basic skill level tasks so they can afford to buy that entry level home for $400k or pay that $400pw rent.

Australia is located right next door to the worlds emerging manufacturing hub, Asia, and we have priced ourselves out of the labour/manufacturing market.
The problem in this country is that Australians think every decision they make is a gem, when in reality their once lucky Australia is fast becoming the ******** of the world, a dumping ground with deep holes to fill.

Don't expect anything to change though, if the thought of someone earning $180k losing a few hundred dollars for the budget deficit was so hard to swallow, imagine the outcry if someone got told their hourly value to their employer was halved.
I've been hammering the job pages and the offer of $28 an hour to drive a rubbish truck is ridiculous when you think about the skill required to do the work
Australians wouldn't be smart enough to understand that wages and cost of living are all relevant.
If everyone received 25% less income then things like housing, food and utilities would have to decrease to stay competitive.
Companies like Ford and Holden support that theory as they are still prepared to supply our market with their product in exchange for our inflated wages, they just don't want to pay what we want to build them here.
No one is innocent.

[Syndrome]

We could retitle this thread "The prolonged death of Australian Manufacturing Industry". Look at cities in the US who once were giant manufacturing hubs and what has occurred to them once these industries closed. It is not a pretty sight.

[tut0r]

Originally Posted by BENT_8

No one is innocent.

That right there sums up our situation, I can say I need a minimum of $25 an hour, equate this to a 38 hour week that's 950 pre tax, $840 after tax if you tick the threshold, in one of our major cities so for Melbourne where I am you are looking at 200 - 250 for a place that's either one room or a tiny tiny apartment that's by no means well kept and when I say that I mean falling apart.

You get left with around 600 bucks a week to spend on whatever, when you dumb it down for a single person that's not bad but its by no means somewhere you're going to be able to get into the housing market any time soon.

So who does someone like that blame? Home investors for having housing to high? Or if you look at the investors to you blame the person they bought the property off for selling it for to much? What about the cost it was to build said property is the builder to blame for charging to much, the builder has kids charges high to support his family because he either has a mortgage pays rent etc etc etc..

Unfortunately its a vicious cycle where everyone is equally to blame in one way or another and you can put it down to the government if you want because they are pointing us in this direction.

But lets be honest if you can rent your house out for a high fee I'm going to bet dollars to donuts there are a lot of people out there who will as its money in their pocket and who cares about others...Enough said.. rant over! I'm going to Tijuana!

[Romulus]

Land prices are hurting Australia. There's an abundance of land but supply is choked. Who's holding us to ransom? Developers, governments, investors? Probably a combination of all.

http://www.businessspectator.com.au/...ting-australia

[borough]

I used to try and buy Australian made stuff but now I've raised the white flag. Last major Australian made item I purchased was a fridge. Now I purchase on cost and quality. Australia. First World living standards with a Third World economy.

[gtfpv]

Don't Compare us with U.S.A they have investment and ownership of most things , Australia sells everything to other countries .
WE were taken over by selfish get rich quick crims over the last 40 years or so . believeing that these crims were smarter and higher educated than we were . the NON HANDS ON , DUMB PEOPLE , WE GAVE THEM WAY TOO MUCH CREDIT . I'm sorry but believeing someone who needs to be hand fed , is OUR CRIME .
PEOPLE WHO CANT WIPE THIER OWN BUM , EVOLVE INTO TRICKSTERS , THEY NEED SOMEONE TO WIPE THIER OWN BUM , NOT CAUSE THEY ARE LAZY , BUT BECAUSE THEY ARE INCAPABLE OF WIPING THIER OWN . so over millenia these people evolve into tricksters , and quite clever ones at that , into getting other peoples money,
You see one who can build his own house , gather his own food , and make his own way , doesnt need to try and trick people to survive , and this is what the basic of life in australia has become . WHITE SUIT TRASH .

[pbk1776]

Originally Posted by Big Damo

Old man works at Centrelink and in the last 6 months they enforced uniform on everyone, instead of having it made locally its been made in Indonesia, and their company cars are all imports.

Only Australian made piece of clothing I own is my AMWU T-shirt, go figure.

Government didn't support the locals, locals didn't support the locals.

I'm guilty of being in the position in the past to buy 2 new cars and none of them were locally made, but not everyone wants a large sedan.

Though before I bought the Focus in 2011 had my eye on this nice FG R6 Falcon ute, 6sp manual but the dealer didn't want to deal with me, got offered a lower price on a 6sp auto from a forum sponsor (same price my Focus cost me) but I didn't want an auto.

Well said

[Syndrome]

Originally Posted by F6 Concorde

Land prices are hurting Australia. There's an abundance of land but supply is choked. Who's holding us to ransom? Developers, governments, investors? Probably a combination of all.

http://www.businessspectator.com.au/...ting-australia

What does this have to do with this thread?

[Romulus]

Originally Posted by Syndrome

What does this have to do with this thread?

Land prices.

[Pugsley100]

Originally Posted by Crazy Dazz

At the end of the day I can fully understand (although still mourn) the simple business decisions to cease manufacturing in a Australia.
I can also understand the decisions to cease production of the Falcon. A unique, limited market, low-volume car with falling sales. The Falcon has been fighting a losing battler for decades, because it doesn't make enough money to support redevelopment.

My gripe is HOW we got into this situation, and WHERE do we go from here
.

Hi CD,
You may be interested in this recent article by Craig Milne of the Australian Productivity Council. The article starts of by listing some of the benefits of the trade liberalisation policies dating back to the 1970's then lists some of the costs of those policies.
Then concludes.......

"From this it could be argued that to have stepped back, as Australia has done by chosen policy, from the progressive endeavour of striving to participate in the form of economic activity that defines membership in the elite group of advanced nations has been an act of national short-sightedness; an egregious error and a failure by that part of the governing class that has been the author of it, to perform its allotted task and duty."

[mik]

Regardless what anyone says , the truth is govco has steered us down this path for decades, this is not an accident.......... this was all planned, and many politicians have signed off on this direction we have found ourselves in, if you do some reading on certain documents from the UN over the years , blind freddy can see we are following a charter, some of that charter is deindustrialization of 1st world countries, and it is happening before our very eyes.
Whitlam, Fraser, Howard, Hawke, Keating, possibly others I have left out, and the pollies are still putting the nails into our industrial coffin,
I think the last couple of nails where the signing of the Kyoto agreement by some silly sod without any say from the electorate, and the carbon tax, this is where we are and we let our pollies put us here, and from where I sit, I don't see any light at the end of the tunnel for manufacturing here possibly for decades if at all.

[someonealive]

The Australian car industry isn't dead, but the big ones are lost unfortunately :( . Although, there are a few niche car manufacturers such as Bolwell

[someonealive]

The Australian car industry isn't dead, but the big ones are lost unfortunately :( . Although, there are a few niche car manufacturers such as Bolwell but the thing is they're over $50,000 and don't have a massive amount of fan base.

[Syndrome]

Originally Posted by F6 Concorde

Land prices.

And what do land prices have to do with the Australian manufacturing industry?

[Crazy Dazz]

Originally Posted by Syndrome

We could retitle this thread "The prolonged death of Australian Manufacturing Industry".

Correct.

I actually think we SHOULD be building cars here. Not 20,000 unique limited-market cars, but a large export industry built on Australian Steel & Energy.
But if it's not cars, I'm ok, provided we're making SOMETHING.

I'm NOT advocating the old practice of protecting inefficient archaic industry, and I accept that for the foreseeable future auto-manufacturing is dead and buried in Aus. My concern is that every week factories are closing and jobs are being lost across the board. What are we going to be left with? Coles was importing bread-dough FFS.

At the end of the day, the solution, whilst complicated, is conceptually simple. Unfortunately it centres on Australia sending a big FU to all the "free-trade" treaties we have signed.

[GASWAGON]

The trick will be surviving these closures and being employed in an industry that gives you stabiltiy.....I'm thinking Broadmeadows will become a mini Detroit when they close those doors.

[Road_Warrior]

Manufacturing, as practised in the leading industrial nations, demands high levels of applied expertise; for the material realisation of inventions and innovations, the design and engineering of products and processing systems, the management of complex supply and production operations and the steady improvement of quality and productivity. It is the mastery of the art and science that underpins this broad expertise that is, more than anything else, the measure and defining characteristic of a technical civilisation, the engine of its forward movement and the ground of its futurity.

And there's the rub. Governments of all persuasions placed far too much emphasis and gave too much leeway to these free trade arselickers who don't give a stuff about anything else but their ideology and consumerism.

Nick Xenophon was right.

[jpd80]

"Free trade" my butt.
As soon as the ink was dried on our agreement with Thailand, they imposed "legal" capacity based import taxes on our vehicles.

Nowhere in Asia wants to buy our vehicles but they want us to buy theirs without a bat of the eyelid.
How many jobs do we have to export before we realize our dirty neighbors to the north are picking our pockets,
follow the money/wealth drain out of the countries back to theirs and helping build their economies, not ours.

[BENT_8]

I distinctly remember stating when Ford made its announcement to leave that unless Australian people stood up to these corporate giants that the situation would snowball.
Instead of protesting most people went about explaining why it was necessary from an economic standpoint.
Fine, that may be true, but we are comparing Australian jobs with American profits and as Australians we really should have told them in no uncertain terms that if you pull out of Australia, we will pull out of your Dealerships.

This is only the beginning and we haven't even seen the first brand to fold yet.

[XR Martin]

As ive said before we're going to end up like Greece, where they dont even make their own milk on a commercial scale.
Their biggest industries are Sea Sponges and Olives.