9. Nov, 2017

Follow the money – The car industry

So Australia has lost it car industry… it never had one! What we had were international brands.

Holden, Ford, Mitsubishi, Toyota have never been ours. They were owned by International companies who decided to lodge here as a brand until it suited them not to. Australia has thrown Billions of dollars at this and in the past ten odd approximately $4B. By the time we count land grants, factory grants, and all funding the bill could be as high as $20B. Even that beloved lemon the Leyland P76 was really a British subsidiary. This phenomenon has happened in several countries. There are three example of this in Brazil, Argentina and India where the industry has nearly crippled the country.

Let us investigate other problems associated with the Australian car industry. Firstly is the problem of lack of market strategy to keep up with demand. Overseas producers such as Korea read the market very well and built smaller, less polluting and gas guzzling cars. While we went on with our love affair with large cars and lots of unnecessary power. We also missed the SUV market by a generation. The question needed to be asked, were they just catering to a few rather than the market to get funding?

Secondly is the question of pricing ourselves out of the market by way of union demands (this is happening in many Australian industries) in high wages and costs and not being able to substitute a worker in the manufacturing line. When in Thailand the basic wage is more than 20 times less than here. If you don’t turn up, do what you are told or strike…you don’t have a job. Now I am not condoning that but it makes an enormous difference to the bottom line.

Thirdly we talk about innovation but really we do nothing about it. We were more innovative in the 1950-60’s than we are now. We made aero planes during and after World War II. Our steel industry was the most advanced in the world but that technical skill is now all but lost. So is the ability to manufacture world class boats and ships for defence. After all you put weapons systems on a platform…not the other way around.

Let’s look at countries who have made it in manufacturing cars. Sweden who also manufactures aero planes has a thriving car industry of its own. India probably makes more cars than any other country but it has a two tiered industry. South Korea makes both ships and motor cars.

Who is responsible and who needs to address these problems…simple politicians. Yet again we can blame the 2 party system for its failures. We had a chance but let it go… because party politics make terrible decisions. There is no reason we can’t have a car industry. Along the way we have been swindled literally out of some $20B and what do we have to show for it.

The investment in the car industry could represent as many as 20000 jobs on the average wage over 30 years… The industry employed less than that and decreased over the last 10-15 years. Yes we didn’t just buy a lemon, we were sold the whole toxic farm! Moreover what are we left with now…a waste-land and an opportunity lost. While those international companies walked away with profits and our money… and have set up elsewhere to make more profits. Follow the money!