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Ford’s exit spells the end of the road for manufacturing

“You’ll never see Japanese cars in an RSL car park.” That was Bill Bourke, Ford Australia’s sales supremo of the ’60s. Bourke was wrong. Dead wrong. In 2016, Ford will cease manufacturing in Australia…

Ford’s impending shutdown of its car-making plants in Australia does not bode well for an already ailing manufacturing sector. AAP

“You’ll never see Japanese cars in an RSL car park.”

That was Bill Bourke, Ford Australia’s sales supremo of the ’60s.

Bourke was wrong. Dead wrong.

In 2016, Ford will cease manufacturing in Australia. The company, headquartered in Broadmeadows, Victoria, has lost $600 million over the past five years. Neither sales nor subsidies can justify continuing its domestic manufacturing operations in Australia.

Gone are the days when Ford could build legendary sports sedans, like the Falcon GTHO Phase III. In 1971, it was the fastest four-door saloon in the world.

Fans of this era cite Holden and Chrysler’s supercars as well: the Monaro 350; the Torana L34 and A9X; and Chrysler’s E38 and E49 Chargers.

But nostalgia isn’t what it used to be.

The heyday of Ford and Holden’s domination of Australian motor industry are long gone. In the 1980s, Japanese firms, such as Toyota, completed their long march to the top of the Australian car sales charts.

By the 2000s, South Korean brands, such as Hyundai, also began to dominate as imported car sales outstripped locally-produced models.

Consumers changed. Tastes changed. With a plethora of 4WD and SUV imports to choose from, as well as high-quality, economical four and six-cylinder cars from Japan, Korea and Europe, by 2012, Australian consumers could choose from up to 500 models from 50 different brands.

Ford arrived late with the local manufacture of the 4WD Territory, which has been a modest sales success, particularly the diesel variant. The petrol model employs Falcon’s six-cylinder engine.

But Territory sales couldn’t offset the disastrous plummet in Falcon sales, which has been the mainstay of Ford’s range since the 1960s. Corporate fleet and government sales, which account for two thirds of large, local car sales in Australia, are insufficient to meet the volumes required to keep products like Falcon profitable and viable.

The news is devastating for 1200 Ford workers, with over 600 employees in Geelong and more than 500 in Broadmeadows, losing their jobs by October 2016. Previously, in July 2012, Ford announced 440 redundancies (although, ultimately 100 were redeployed) as Falcon sales continued to sink.

In Geelong, the news comes on the back of Shell’s announcement in April this year that it would sell its Geelong refinery. The move threatens 450 jobs, plus hundreds more who have contracts with the Shell operation.

Long history

The company’s departure also represents the end of 90 years of Ford manufacturing in Australia, going back to Henry Ford I’s Model T.

From the 1960s, like Holden, Ford counted on sheltering behind the high tariff walls that rendered imported vehicles less competitive. They depended on Australians buying their luxury car derivatives, the Ford Fairlane and LTD and the Holden Statesman, instead of imported BMWs, Mercedes-Benzes and Jaguars. Tariffs and taxes meant German cars cost twice as much in Melbourne as in Munich. Even more modest German imports, like VW’s Golf, cost more than an average Australian car.

That’s still true today, despite the slashing of tariffs. As a little exercise, look at the retail price of a 2013 BMW 750i. About $281,000. Right? Now look at the US price: about $85,000.

Despite the tariffs and the luxury car taxes, Australians buy plenty of BMWs, Lexus-es and Toyota Landcruisers. The biggest-selling car in Australia in February 2013 was the Mazda 3 (somewhat ironically, Ford had effective day-to-day control of Mazda until 2008, via a large minority holding, although the company owns only 3% of Mazda now).

Small, efficient, quality cars: precisely what Ford and Holden couldn’t deliver.

Like everyone else, Australians are car snobs. Like Alec Baldwin’s character in 30 Rock, they wouldn’t be seen dead in an American car.

Small wonder Falcon is dead and Commodore is on the endangered species list. Nobody buys cars out of patriotism anymore — not even RSL members.

Endgame: cost versus scale

Two basic economic propositions underscore Ford’s decision to withdraw from manufacturing in Australia: returns to scale; and factor costs.

At the peak of Falcon and Holden Commodore production, the local manufacturers could count on 100,000 sales annually. But with the Falcon counting only around 14,000 units annually, its continued production does not justify the enormous R&D expenditure (supported only to a relatively small degree by subsidies) required to develop a new model, which would also need to comply with forthcoming emissions standards.

There’s the rub. One of the core reasons for Ford’s decision to wield the axe is Australia’s adoption of the Euro 5 vehicle emissions standard, which will come into effect in November 2013. The more stringent Euro 6 standard, which Australia has also adopted, will be implemented by mid-2018.

Euro 5 would have required major re-engineering of Ford’s six-cylinder engine, which would be costly and an unviable proposition, given Falcon sales have fallen by around 75% over the last few years.

Sales have not been not helped by the four-cylinder EcoBoost Falcon, which received $230 million in government subsidies and has proven a sales failure, with few consumer or government orders.

The other contributor to Ford’s decision to shut down local production is cost. Ford Australia’s CEO, Bob Graziano, noted that it cost twice as much to build a Ford in Australia as it does in Europe. And Australian production costs four times as much as building a Ford in Asia.

Do the maths: Lousy scale x escalating costs = shutdown

The loss of 1,200 jobs in Broadmeadows and Geelong is only the tip of the iceberg. Victoria, the manufacturing hub of the country, is in recession. The high Australian dollar is killing the manufacturing sector. Sectors of the farm industry are in huge trouble. Much of the world economy is in an extended state of recession and austerity.

If the mining super-profits boom has plateaued or, worse, disappeared, as some pundits have predicted, then Australia is in for a long winter of discontent.

Neither side of politics has any solution to these problems. Future Australian governments face a hollowed-out manufacturing sector, declining revenues from resources and an ageing farm population facing import competition as never before.

Australia rode out the GFC on the back of virtually unprecedented mining boom and a fiscal revenue position that was Made in China. But that was a thin, glossy veneer on what was – and is – in reality a deficit-ridden, Dutch-diseased, debt-financed bubble.

Shell is selling the Geelong refinery. BAE Systems is getting out of Australia. Ford will be gone in 2016.

Who will be next?

Join the conversation

177 Comments sorted by

    1. Adrian Gibbs

      Retired

      In reply to Jack Arnold

      Can someone tell me why, except for the usual gravy train, our politicians continue to pour our money into soon-to-be-outdated enterprises - petrol driven transport . We are said to have plentiful natural gas, and even though a large part has already been given away to overseas buyers, there should still be enough for Australians. Surely tax-payer subsidies should only be given to commercial enterprises wanting to develop a CNG-powered transport system for Australia - CNG vehicles plus the gas.distribution network, which should include home compression..

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    2. Geoffrey Harold Sherrington

      Boss

      In reply to Adrian Gibbs

      Yeah, LNG looks good until you calculate the extra numbers of fire appliances and staff that would be needed, especially with home compression (which can lead to rapid home expansion).
      I'm guessing here, but you can bet that LNG economics have been studied minutely. Just have not read any studies lately.

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    3. Henry Verberne

      Former IT Professional

      In reply to Adrian Gibbs

      The future of cars is electric in my view and will really take off once the range issue has been overcome.

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    4. Geoffrey Harold Sherrington

      Boss

      In reply to Henry Verberne

      There has been a large amount of work done on range solutions, with very little but incremental improvement.
      Perhaps your day will come when they shorten the roads to 50% of present length.

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    5. Graham Walker

      IT Architect

      In reply to Henry Verberne

      Hi Henry,
      Only if we change things significantly in regard to the cost of owning an electric vehicle.

      Holden recently introduced the Holden Volt in Australia (brought here as an Australian version of the Chevy Volt). I took one for a test drive and really liked the car overall, although having only 4 bucket seats was one of the negative points for us as we wanted 3 seats in the back. Anyway, the main problem for our family in purchasing this car was the price tag. At $59,990 plus on-road costs it puts it in the luxury car tax bracket. This really is frustrating when the same car in the US comes as low as US$31,645 with their various low emission schemes.

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    6. Mike Stasse

      logged in via Facebook

      In reply to Henry Verberne

      Cars don't have a future...... there are 1 billion cars on the planet now. It takes some 60 barrels of oil just to BUILD the car, that's 60 billion barrels or two years of global consumption. Even the roads are made OF oil.... once peak oil starts biting hard, it's all over for cars, no matter what they're powered by.

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    7. Hardy Gosch
      Hardy Gosch is a Friend of The Conversation.

      Mr.

      In reply to Geoffrey Harold Sherrington

      "Perhaps your day will come when they shorten the roads to 50% of present length".
      Very funny smart Aleck!
      Seriously now, better battery storage capacity and faster recharge times are just around the corner. They already exist in the laboratory. Extraordinary events will accelerate the commercial introduction within a relatively short time. Mark my words.

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    8. Michael Hay

      retired

      In reply to Mike Stasse

      If our federal politicians had any idea of innovation and any capacity for forward thinking, they could legislate that all those entities holding public funds (insurance, superannuation, trading banks) be required to place 10% of their funds into an Infrastructure Fund which could then provide the infrastructure required to distribute LNG to all parts of Australia.
      Creating combustion engines that run on LNG is not the problem; forward thinking is.

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    9. Geoffrey Harold Sherrington

      Boss

      In reply to Graham Walker

      Graham,
      Does not elementary physics tell you that the weight of batteries added to a car carries a penalty of energy consumption? There is no solution as yet to this simple impediment. There is plenty of slanted advertising, but it's cheap.

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    10. Geoffrey Harold Sherrington

      Boss

      In reply to Michael Hay

      Michael, why do you not look for a solution that does not rely on the funds of others? Why do you not get out there and start selling LNG cars? That's the sort of action that people take to get rich.

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    11. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      Sorry Geoffrey but your ideas are outdated and simply wrong.

      There are plenty of natural gas powered dual fuel and single fuel cars in Australia manufactured specifically by GM and Ford. My own ute was converted with government subsidy to dual fuel. It drives the same except for a little less power (when you flick the fuel switch back to petrol as required).

      The local Shell service station has no more staff to dispense gas from a dedicated bowser, just like diesel.

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    12. Jack Arnold

      Director

      In reply to Adrian Gibbs

      HI Adrian, I agree entirely. Presently there is OVER $600 MILLION CORPORATE CHARITY paid directly to the bottom line of international car manufacturers that failed to make a profit over the decade before the GFC due to inept management policies of personal greed and market ignorance, and only made a profit after government intervention & bail out by Obama prevented their closure.

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    13. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      Once again Geoffrey you are ill informed and wrong about electric vehicles.

      The duration and range of electric vehicles is dependent upon the capacity (size), quality, physical weight & physical volume of the batteries and the rapidly developing battery technology.

      There are presently Australian entrepreneurs converting existing model cars from petrol to electric. There are enthusiast clubs and associations with members doing the same in their own garages. So, any half competent home mechanic with some knowledge of auto-electrics could do the job following directions in any one of a number of publications showing the process.

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    14. Jack Arnold

      Director

      In reply to Graham Walker

      Hi Graham ... this price point is the real reason for electric cars being disabled in the market. The Chicago based manufacturers want to put a high lead price on electric technology to profiteer on a technology that has about the same cost of production as petrol cars.

      Check out www.converturcar.com

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    15. Jack Arnold

      Director

      In reply to Mike Stasse

      HI Mike ... how about re-directing the about $600 MILLION corporate charity presently paid to Chicago based car manufacturers into Australian manufacturing?

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    16. Jack Arnold

      Director

      In reply to Mike Stasse

      Hi again Mike ... your figures are interesting, but electric vehicle technology, especially battery technology, is rapidly improving so cars have a real future, especially in short haul locations like cities (where pollution and declining public health is a major social cost and drag on the economy).

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    17. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      Once again Geoffrey your logic and Mathematics is flawed.

      Petrol engines and petrol fuel tanks full of petrol have weight and mass which is off set against the weight of the electric motor and batteries.

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    18. Greg North

      Retired Engineer

      In reply to Jack Arnold

      Great Link Jack, seeing as they have ceased trading ( might have been bought out by Ford or Shell! )

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    19. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      Jack, not wrong, you read it wrong. I was referring to electrical vehicles whose battery weight, to give an acceptable range, is quite large; and more to hybrid vehicles where the battery weight is mostly extra to that of a normally powered car. Nor are my comments outdated. The physics has not changed.
      As I said, simple physics dictates that extra weight takes extra fuel, from whatever source. You can massage the economic numbers to make them look appealing, but you cannot escape the physics. It's pretty dumb to cart around all that extra battery weight based on some proposition that the globe is heating, when it has not been heating for some years.

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    20. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      Jack,
      The duration and range of electric vehicles is not dependent on rapidly developing battery technology. You can't measure the range of a vehicle using batteries that do not yet exist. There has been a very large investment in battery technology, with a Pink Floyd result. There seems to be a wall that opposes both light weight and high energy density. I would not formalise it into a rule, but it is a most common outcome from battery research.
      Naturally, we should all be delighted if there was a breakthrough of significance. I am unaware of any in the pipeline. Do you know of any? For the last 40 years I've heard of impending breakthroughs in battery design, so I've got a little blasé, I suppose.

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    21. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      Jack,
      The removal of lead compounds from petrol led to increased use and more pollution by petrol residues. The science is still unsettled.
      http://dnacih.com/SILVA.htm

      We live in an era where The Establishment, often reliant on a shallow investigation of issues, can bulldoze a certain outcome, whether the science is right or not. Most recently, the Warren/Marshall Helicobacter ulcer affair. Then there's the lack of global warming for 16 years or more .....

      The unravelling of the backstory in some of these issues, like why Australia's car industry is collapsing, is most often a complicated layer on layer where a specialist interpretation is needed, though not often available.

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    22. Michael Hay

      retired

      In reply to Geoffrey Harold Sherrington

      You may be a Boss, but not mine. In any case, as a retiree I have no intention of becoming a car salesman at this late stage of my life. And again, why sell LNG cars when they cannot be refueled ? - the infrastructure must come first and it will never happen if it is left to private enterprise because the return is not instantaneous enough.

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    23. Michael Shand
      Michael Shand is a Friend of The Conversation.

      Software Tester

      In reply to Mike Stasse

      Hardly anyone has $100,000 to spend on a car, I dont know who you are friends but no one I know has that sort of money

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  1. Geoffrey Harold Sherrington

    Boss

    Australian unions are a major factor in the demise of Ford Australia. The first person I heard interviewed was Paul Bastian of the AMWU who has a web reference -
    "Paul is a powerful advocate for secure and long term employment for our members in manufacturing through research and innovation, skills development, targeted industry policy and increasing the number, and quality, of apprenticeships." Whatever that means. Why was the union making a statement at all, let alone a prominent one? In my Australia…

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    1. Mike Swinbourne

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      ".....Australian unions are a major factor in the demise of Ford Australia....."

      "....Australian unions are minnows in setting international work conditions,...."

      Ummmm...............

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    2. Graham Walker

      IT Architect

      In reply to Trevor McGrath

      I own a Ford Fiesta Econetic that was manufactured in Germany. This high efficiency turbo diesel car gives me a real-world (not under testing conditions) average of 4.57L/100km. I use an app that I plug in my kms and litres at every fill up which calculates this for me so I know the real efficiency and not just advertised figures.

      The problem is that there aren't too many of these cars in Australia as apparently Australians weren't willing to pay the higher price for the higher efficiency diesels and so Ford has stopped bringing them into the country. In the end it is the consumer that dictates what is sold. You only have to look at all the 4x4's on the road to see what Australian's are demanding in cars.

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    3. Graham Walker

      IT Architect

      In reply to Mark Jablonski

      The problem is that we do have world-leading solar research and development, but there is no support for commercialising the technology here so everyone seems to go overseas and commercialise it there.
      There must be some way that we can provide incentives to our very smart r&d guys and gals to stay here and commercialise in our country and then export to the world. I know that the Aus$ is high at the moment but that won't last forever and we have to plan for the longer term rather than the immediate, short term and support and build these industries and technologies now.

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    4. Michael Hay

      retired

      In reply to Mark Jablonski

      Every export-oriented manufacturer who is having problems with export competition blames the high Aussie dollar. USA and Japan can devalue - why cannot Australia? Are we servants of Lehman Bros and George Soros along with all the other fancy financiers who make their millions out of currency trading ? Surely there are sufficient practical economists and businessmen who are fully aware that our dollar should be at least as low as 85c American. Why is there not an outcry to our leaders to actually do something about the obvious problem

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    5. Michael Hay

      retired

      In reply to Graham Walker

      There are Ministers for Innovation in both the ranks of the Federal Government and in the Opposition. They are both pretty useless, aren't they.

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    6. Geoffrey Harold Sherrington

      Boss

      In reply to Graham Walker

      Graham,

      Smart R&D is to solar research what Beethoven was to cooking.

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    7. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      "Smart R&D is to solar research what Beethoven was to cooking."

      Mr Sherrington, without further explanation that's just a throwaway smear.

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    8. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      Oh dear Geoffrey, you long for the distant past to justify your outdated ideas and inept management strategies ... are you also a card carrying member of the Notional Party you have to celebrate a 19th century future??

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    9. Greg North

      Retired Engineer

      In reply to Michael Shand

      Australia is a land of vast distances Michael and if you have ever been driving longer distances quite regularly, you'll be fully aware of the benefits of a larger wheel base vehicle such as a Falcon/Fairlane etc. compared to the more compact family cars, especially if you're somewhere approaching or over 185 cm.

      And then you might also just find that Ford and GMH produce more in the six cylinder range, even turbos than they do with V8s these days, fuel consumption of a much lower revving six…

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    10. Greg North

      Retired Engineer

      In reply to Mark Jablonski

      " America has exactly the same problem - they're still trying to solve issues by maintaining second-world economics. It just doesn't work. The workers and the unions are not to be blamed for that oversight. "

      Businesses will not be too innovative Mark if they have been making massive losses for a number of years for re-inventing a manufacturing entity is going to take far more than government subsidies of even a billion$ spread over a decade.
      Think tens of billions$ and who is going to provide the capital?
      Are unions likely to make investments?

      An then at the end of the day, so you have a new smarter design vehicle whatever that is, just like competitors abroad who are also using the latest in manufacturing technology and they have their manufacturing cost at less than half that of what is occurring here, what do you think will happen?

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    11. Greg North

      Retired Engineer

      In reply to Graham Walker

      " I use an app that I plug in my kms and litres at every fill up which calculates this for me so I know the real efficiency and not just advertised figures. "
      Ever heard of mental arithmetic Graham?

      " There must be some way that we can provide incentives to our very smart r&d guys and gals to stay here and commercialise in our country and then export to the world. I know that the Aus$ is high at the moment but that won't last forever "

      I don't know how old you might be Graham but it seems…

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    12. James Hill

      Industrial Designer

      In reply to Greg North

      And those "far cheaper labour wages" are not supporting half million dollar mortgages, the antipodean economic blind spot!

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    13. Michael Shand
      Michael Shand is a Friend of The Conversation.

      Software Tester

      In reply to Greg North

      Australia is a land of great distance eye?

      ohhhh, I see, so like how the sun never sets on russia - it rises in the east when setting in the west....therefor russians need cars that can drive halfway around the globe right? and the majority of australians need cars that can drive the length of the country, mhmm, yup, makes perfect sense

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    14. Michael Hay

      retired

      In reply to Greg North

      Which means that for decades our home-made cars have been unable to compete on both a domestic market as well as a world market. An excellent reason for not having a car industry.
      We could probably do better building a massive steel manufacturing works and to sell our steel so that we could import all our vehicles. As to your last paragraph, is it not a bit sweeping to set your negativity onto "any product that that might get invented" ? At this stage of our existence, who can tell what might be invented next year or in ten years time ?.

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    15. Jack Arnold

      Director

      In reply to Greg North

      Rubbish Greg, "It is simply our Labor (sic) wages rates".

      I agree; the executive component of LABOUR costs that look like telephone numbers are certainly excessive especially when structured to minimise taxation liability for the executive, by paying to an overseas bank account, or other such device.

      Why do conservative critics consider that executive salary packages do not contribute to the cost of production???

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  2. Geoffrey Harold Sherrington

    Boss

    Another matter.
    About year 2000 I met with all or most State Ministers responsible for car matters at a session of a seminar at the HQ of a major Australian automobile manufacturer. Several company managers were present.
    My colleagues from Europe were here to expand knowledge of new, unreported and very effective car theft countermeasures. I shall not reveal all of them.
    For example, using laser technology, they disclosed that they could print the sufficient identification details of a car on…

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    1. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      Back around 1998, a consortium of Australian vehicle components manufacturers, formed a consortium to build a prototype small-medium car. 

The project successfully developed a 100% Australian-owned, designed and built concept vehicle, which they named the "aXcess" car. The consortium's efforts were widely applauded, but no more came of it.



      ~2007, the consortium repeated the exercise, this time employing a hybrid drive-train with much lower fuel use and CO2 emissions. This time, they called it aXcess Mk II, and again nothing more came of it.



      Meanwhile, Nissan, then Mitsubishi and now Ford are withdrawing from Australia, leaving behind factories and skilled workforces that would be perfectly capable of mass-producing these aXcess vehicles. All that is needed is an order from a vehicle fleet operator (eg Commonwealth public service) for 10,000 of these vehicles.

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    2. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      "On corrupt thought - as we left that meeting, a young lady engineer said quietly to me “You won’t make any progress. In Australia, the makers have a saying that a car stolen is a new car sold.”"

      Thank you Geoffrey, FINALLY a contribution that makes good sense and is "evidence based analysis and news".

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    3. Jack Arnold

      Director

      In reply to David Arthur

      Thank you David. We need to lobby the Cross Benches to encourage your proposal to go forward. The military strategic problems that accompany to loss of vehicle manufacturing capacity is being overlooked in Canberra.

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  3. Jack Bowers

    Learning Adviser

    I look down my street. One falcon, one commodore, at least 3 Subaru Foresters, several Corollas, several Hyundai i30s. Australians want decent cars which suit their purposes - over decades, the local car industry tried to fob its guzzling, sluggish, out of date vehicles on the public, treating us like mugs, relying on subsidies and govt purchases - Holden and Ford deserve no allegiance, no subsidies and no tears.

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Daniel Boon

      Daniel Boon,
      Put on your coon skin cap and a final 'e' and laugh with me.
      HaaaaHaaaaHaaaa
      Then calculate the subsidies you conveniently forget to mention for windmills and solar devices that are supposed to make cheap electricity. They are the analogue you raise of making cars that are too big. Their problem is that they do not work efficiently and power costs about 5x that of fossil fuel. The public is already growing weary of alt energy propaganda.
      In five years, you might find yourself writing similar words, once your thoughts catch up. Then you can write, as the other Daniel did,
      "Many heroic actions and chivalrous adventures are related of me which exist only in the regions of fancy. With me the world has taken great liberties, and yet I have been but a common man."

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    2. Graham Walker

      IT Architect

      In reply to Geoffrey Harold Sherrington

      Surely there is nothing wrong with subsidies for a period of time to get an industry going until volume can compensate to bring the price down. I for one wish there was a subsidy for double or triple glazed windows in Australia. Then people could start buying them at reasonable prices and improving the efficiency of their new houses. When enough people are buying them as standard components of a new house the subsidies could fall away as the volume compensated with lower production costs.
      We…

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    3. Mike Stasse

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Really Geoffrey? Growing weary of alt energy propaganda? Every second house around here has a solar array on its roof (we have two + solar water heater) and they work very very well.........

      My next project is to electrify my ute with a range ~60km to pick up my farm supplies...... all run on free energy.

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    4. Geoffrey Harold Sherrington

      Boss

      In reply to Mike Stasse

      Hum drum, Mike. My Dad & I built a solar hot water system in 1956 to plans from CSIRO. It was in Townsville. In winter it went cold. Another example of the cost to harness diffuse energy.
      How about you organise a tax rebate for those of us in high rise buildings who can't put a significant rooftop system in, yet subsidise the carpetbaggers to a not inconsiderable sum? Is that not a prime example of inequity? I bet there'd be very few rooftop systems without a subsidy handout. This blog seems well populated by those with cargo cult thinking. Whatever happened to looking after yourself?.

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    5. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      So your high rise location is the cause of your pain, Geoffrey> Why not re-locate to an urban regional location where you can buy a house residence on a 1,000m2 lot for about the same price ... and have both space and clean air. There are even regional universities with relaxed entry requirements for interested and committed prospective students.

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    6. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      Jack,
      No doubt you mean well with your comments, deep down, but if you are near my age you will find that the close proximity of good medical specialist care is a major determinant of location to reside. Flats are cheaper than houses. Ours has 2 bedrooms and no roof, just more units stacked on top. I heard the news this morning, someone was making the same point about inequity. Another factor, on topic here, is car use. I've got macula degeneration, my wife does not drive, so there's another constraint…

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    7. Geoffrey Harold Sherrington

      Boss

      In reply to David Arthur

      David,
      Nowhere did I say that I had not followed and participated in later developments. I was simply making the point that even slow learners have had decades of demonstration of limits to growth of some forms of energy. Some of those limits are dictated by physics.
      Sorry, I don't get excited by news that $100 million of research has improved solar conversion efficiency by a few %. I read that as unforgivable, almost criminal exploitation of the community asset.

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    8. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      Oh dear Geoffrey, you have got things muddled up. It is the bosses who are the experts at crying "We need a government subsidy to maintain our long lunches and enormous salary packages".

      Historically, the ruling classes, that tend to compose the management classes, have had their hand out for some form of government subsidy since landing in 1788.

      First, it was convict labour for keep, then it was free land grants to operate wool growing enterprises, then it was accelerated tax deductions…

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    9. Geoffrey Harold Sherrington

      Boss

      In reply to Mike Stasse

      Mike,
      The energy is not free. It costs to provide the electricity to charge the batteries, does it not?
      If hybrid or electric cars were so good, a lot of people would buy them. Apart from those that are given away for publicity purposes, the main buyers seem to be celebrity airheads.

      As for the solar array on the roof, yes, there are a some niche applications where it makes sense for hot water, but for electricity, you ought to brush up on the concept of spinning reserve and if you are trained in science, on alternating current theory and difficult-to-manage concepts like quadrature and power factor. The have a look at recent reports on the actual endurance of units now failing as opposed to the estimated lifetime. It looks like they are failing terminally 10-20% sooner than they ought, though of necessity, that applies to older designs.

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    10. Geoffrey Harold Sherrington

      Boss

      In reply to Mike Swinbourne

      Mike,

      In return, try
      http://climateaudit.org/2012/09/08/lewandowsky-scam/
      and
      http://joannenova.com.au/2013/05/cooks-fallacy-97-consensus-study-is-a-marketing-ploy-some-journalists-will-fall-for/

      Never mind the source of the blogs, just concentrate on the methodology of the authors of the papers.
      I don't trust the polling approach, the data are too soft.
      Shell, BTW, is up to its ears in funding green NGOs. Don't kid yourself that it has a neutral corporate stance. BP is ahead of it, though, in excesses.

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    11. Greg North

      Retired Engineer

      In reply to Geoffrey Harold Sherrington

      Seems as though something wnt wrong between design/construction and Townsville winter Geoff or was it a snowy winter that year!

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    12. Greg North

      Retired Engineer

      In reply to Mike Stasse

      And if they cannot be produced at a competitive cost!, what then Mike?

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    13. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      "Nowhere did I say that I had not followed and participated in later developments." Err, your comments suggest that following and participating in later developments has not informed your views, which seem reminiscent of the "New Right" movement circa 1983.

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    14. Geoffrey Harold Sherrington

      Boss

      In reply to David Arthur

      David,
      I think we can say more correctly that you did not inform your views , given the clarity of the demonstration I referenced. Don't be side tracked by the 'New Right' label, many of us get labelled or libelled from time to time. It does not mean, by definition, that something is wrong with the information attached to the label.
      One has to learn from the lessons of history.

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    15. Mike Stasse

      logged in via Facebook

      In reply to Jack Arnold

      I don't NEED more than 60km................. and I believe in living within my means.

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    16. Mike Stasse

      logged in via Facebook

      In reply to Jack Arnold

      Nice link. Convert UR Car has ceased trading. Must be a message there somewhere......

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    17. Mike Stasse

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      The energy IS free, the storage is not. I wouldn't buy a hybrid in a fit. As a trained energy consultant, I don't find "quadrature and power factor" hard to understand at all!

      The units that usually fail are not panels (NASA has 50 yr old ones that STILL work), the problem is usually in the peripherals like charge controllers and inverters.

      I'm more aware than most that one day, EVERYTHING will stop.......... I give it no more than 20 years.

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    18. Mark Amey

      logged in via Facebook

      In reply to Graham Walker

      I tend to agree, Graham. The very same folk who tell me that we don't need double glazing, or a higher level of insulation in floors/walls/ceilings are the same folk who run heating for five months of the year.

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    19. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      Mr Sherrington, to what demonstration do you refer?

      My understanding of the 'New Right' is that it began quite correctly as a criticism of cloying social interventions and market distortions in which governments engaged over the preceding couple of decades.

      My view is that there was a great deal of validity in those arguments, particularly as
      i) governments were persisting with fiscal deficits even when economies were growing. [It is ironic that the inevitable results of these irresponsible…

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    20. Graham Walker

      IT Architect

      In reply to Mark Amey

      Hi Mark,
      Not just heating. I just can't understand why there isn't more effort to insulate for cooling (which is more costly than heating) in this country. In my last house (a rental, which had some insulation in the ceiling) we had the benefit of cooling breezes and with careful opening and closing of windows and blinds we could avoid the A/C for most of the time other than the worst days. I reckon with full insulation and double or triple glazing we might have managed to avoid using it altogether.

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    21. Mark Amey

      logged in via Facebook

      In reply to Graham Walker

      This week we are having our black cement tile roof replaced with the new Colorbond Coolmax, plus roofing blanket.

      We are hoping to see a radical reduction in heat gain next summer, but, probably little change in winter. I agree that a more concerted effort towards insulation could make us all more comfortable, and use less energy for heating and cooling.

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    22. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Geoffrey

      As a participant in the study - I was one of the 24 people who rated the papers - I have to disagree with you.

      Their are several quite separate questions one can ask.
      1. Do the majority of scientists agree with the idea of AGW, based on their published work
      2. Does their agreement constitute valid or sufficient support for the idea of AGW itself?
      3. To what extent is the general public aware of the degree of support for the idea AGW (whatever its actual level) by the scientific…

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    23. Geoffrey Harold Sherrington

      Boss

      In reply to Glenn Tamblyn

      Glenn,
      I was bowing out but I can't let this crap stand unchallenged.
      One knows when a non-proficient scientist is writing, from indirect indicators, like 'truth' in technical matters. Hardened scientists are very reluctant to use 'truth' in relation to a hypothesis.
      One knows of a lack of education in logic when you postulate that if you ask one question, a counter must follow.
      Remember that very many accepted scientific propositions started from a minority view. Perhaps a majority do. It's…

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    24. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      And what the scientists base their views on is the hard evidence Geoffrey. That is why their opinion is so important, their job is about looking at the evidence, uncovering that evidence.

      Evidence like the IR absorption properties of gases, the observed IR spectrum of the planet, heat accumulation in the oceans, the chemistry of buffered solutions in the oceans,

      "One knows of a struggling brain when there is nothing better to do than to take a proposition that few agree with, then torture data to make it seem valid."

      That is about the most exact description of 'climate skeptic scientists' I have ever heard.

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    25. Mike Swinbourne

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Geoff

      Well done! I was awaiting the predictable links to the denier echo chamber.

      You really need to read a little wider than the opinions of ill-informed idiots. Try some science once in a while.

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    26. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      So Geoffrey why not increase the number of recycling hydro-electric power stations as proposed for the northern NSW escarpment and prevented by metro based inner city basement dwellers?

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    27. Mike Swinbourne

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Geoffrey

      ".....Mike... If you were up to date and forthcoming, you might like to comment on this..."

      Apparently you failed to read my post. Note that I said that you should read some science, not the opinions of ill informed idiots. And what was your response? A link to a blog.

      I don't comment on the musings of deniers who post discredited nonsense on their own blogs. Try again. And science next time.

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  4. John Crest

    logged in via email @live.com.au

    "Ford’s exit spells the end of the road for manufacturing"

    What a load of rubbish.

    It spells the end of the road for Ford manufacturing, nothing more.

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    1. Hardy Gosch
      Hardy Gosch is a Friend of The Conversation.

      Mr.

      In reply to John Crest

      Agree, inappropriate headline.
      Plays right in the hand of ultra conservative doomsday sayers!
      We have enough of those in the old media!

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    2. Glenn Tamblyn

      logged in via Facebook

      In reply to John Crest

      End of the road. Probably not. The road gets much harder for Australian manufacturing yes.

      The biggest concern is the loss of engineering capacity and expertise that follows when you loose major manufacturers. It is the skills and knowledge of all the people in the supply chain that is a precious resource for the nation. And very few industries can support the wide range of skills needed to give a nation a good technical base - automotive, shipbuilding, defense technologies, aircraft industries, heavy construction, power generation and nuclear.

      It is easy to have a nation that can build lawn mowers and vacuum cleaners. A serious technical base takes a bit more than that.

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    3. David Arthur

      resistance gnome

      In reply to Glenn Tamblyn

      At least Ford's departure is yet another opportunity for the aXcess consortium of Australian component makers to get a skilled workforce to bring the aXcess MkII hybrid concept car to production.

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    1. Michael Shand
      Michael Shand is a Friend of The Conversation.

      Software Tester

      In reply to Hardy Gosch

      Thanks for the link, it was very interesting but sort of strawman arguments

      So his arguments were great and very logical for supporting manufacturing

      Not nessecarily an argument for manufacturing cars, just for manufacturing in general

      This is the definition of a strawman, ie. See how important manufacturing is > Therefor we need to manufacture cars...wait, what?

      And the usual arguments about, manufacturing has flow on effects to the economy....which whilst true, its also true for almost every industry, airline industry, trucking and logistics, etc - so just more strawmans

      See how interlinked industries are....therefor we need to manufacture cars - say waht?

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    2. Geoffrey Harold Sherrington

      Boss

      In reply to Hardy Gosch

      Hardy, Did you know that South Australia has the highest cost of the Eastern States for electricity, mostly because of recent over reliance on alt energy? This moderates ones attitudes to experts from there who make public speeches.
      Goran should be concentrating on attracting new industry by provision of cheap energy. There's no way that industries that have high energy use will find SA attractive until it does something sensible like go nuclear.
      Whether you like it or not, in SA you are seeing a departure of investment BECAUSE the cost of alt energy is uncompetitive. That's the reality. (As a friend once said, 'Reality is for people who can't face drugs.')
      I'm crossing my fingers that the whole of Australia will not go under because of this trendy stupidity of alt energy.

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    3. Mike Stasse

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      REALLY? A quick google unearthed:

      The increasing proportion of renewable energy in the state has caused a significant decrease in the emissions intensity of electricity generation in South Australia. This means that, even though electricity demand is increasing, the total emissions from generation has been in decline.[18]

      South Australia's wholesale electricity prices, which were once the highest in the country, are now the lowest. This decline in wholesale price has been attributed to the impact of wind power on the merit order effect, where relatively low cost wind power is purchased by retailers before higher cost sources of power.

      http://en.wikipedia.org/wiki/Wind_power_in_South_Australia

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  5. Dennis Alexander

    logged in via LinkedIn

    "Small, efficient, quality cars: precisely what Ford and Holden couldn’t deliver." Not couldn't, wouldn't. Mostly because the (male) population of the time said they would buy them: remember the P76 was designed to specifications derived from research of Australian consumers. Blaming unions is pretty damned stupid seeing as most of the german manufacturers seem to get along pretty well with works councils, collective bargaining and high levels of unionism - as do the Japanese: maybe some Australian…

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Dennis Alexander

      Dennis,
      And you have proof that German unions are not stuffing industry around there? Germany is rather close to bankruptcy, you tell me the main causes. (Hint, two key words are union and windpower).

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    2. Dennis Alexander

      logged in via LinkedIn

      In reply to Geoffrey Harold Sherrington

      Gee, Geoffrey, you mustyou have better information than the OECD, the Budesbank, the NY Times and just about everyone else.
      ”This is absolute nonsense, utter nonsense” was the response of trade union leader Rainer Einenkel to a call for indefinite strike against the impending closure of the GM-Opel plant in Bochum, Germany. (http://www.wsws.org/en/articles/2013/01/25/opel-j25.html) This was against the wishes of some of the workforce. Trade unions and works council have a pretty good history…

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    3. Graham Walker

      IT Architect

      In reply to Geoffrey Harold Sherrington

      I have no idea as to whether Germany is "close to bankruptcy" or not; however it seems rather far fetched to blame this on unions and wind power of all things!

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    4. Geoffrey Harold Sherrington

      Boss

      In reply to Graham Walker

      Graham, They contribute. I think they contribute more than people imagine. What utter stupidity to close down nuclear. Nutters at work there.

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    5. Geoffrey Harold Sherrington

      Boss

      In reply to Dennis Alexander

      Dennis, BTW, my appellation of "Boss" was picked up by software from a facebook spoof, not chosen by me. In fuller title, I was described as Boss of the Geoffrey Sherrington Retirement Benefit Fund NL, contributions welcomed. Also BTW, I was before retirement a graduate manager as were almost all of my top 50 colleagues. No blunt knives in the drawer there.
      I was a director of a modest company by age 29, have never been in a union, have never been on strike, have organised international meetings on matters like property rights, have given several invited overseas lectures on various topics, was paid most of my career more than 2x Profs' salary ... an interesting life, but how I weep when I see the heartless destruction of this lovely country by people with ideologies instead of innovations.

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    6. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      Ideology instead of innovation, Mr Sherrington?

      If it's innovation you're wanting, you realise that Australia could end its dependency on imported petroleum with biofuel extracted from less than 10,000 sq km of algae ponds?

      Australasian Science editor Julian Cribb has written a discussion paper (16 pages) for WA think tank Future Directions, available from Future Directions' website (http://futuredirections.org.au/publications/associate-papers/1044-food-and-fuel-forever.html). Here's the Science Alert story which alerted me to Mr Cribb's work (http://www.sciencealert.com.au/news/20132105-24387.html).

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    7. Jack Arnold

      Director

      In reply to Geoffrey Harold Sherrington

      So Geoffrey by your own admission you still have a lot of management to experience first hand before you pass. Still, your sentiments supporting Australia manufacturing industry are valid.

      I am reminded that when McGeechie was Chairman of Telsra, the Three Amigos destroyed one of the most efficient telecommunication corporations in the world.

      Now which former Prime Minister was McGeechie related to by marriage??

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    8. Geoffrey Harold Sherrington

      Boss

      In reply to David Arthur

      David,
      I studied aquatic biota in the Top End as a fast-growing potential fuel when President of the NT Chamber of Mines and Energy about 1990.
      If you follow the history of rabbits, foxes, cats in Australia, then add blackberries introduced by Baron Sir Ferdinand von Mueller, then go to cane toads, Mimosa pigra, night-flowering cactus like Eriocereus tortuosus and a few others, you might just find that there are dangers in using gay abandon to fiddle with nature on a grand scale.

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    9. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      No, Jack,
      I've been retired many years. In retirement, I have never received a cent for any work in any way related to Global Warming or its hydra-like reincarnations.
      I've done my management stint, with a small team that added a few tens of billions of new wealth $$ to Australia, for which no person (apart from close friends) has ever thanked me. Abuse and ad homs seem to be the game these days, gratitude went out the door when Menzies left. When young people who write on TC realise this, they might think again about how they are going to get anywhere within cooee of that achievement. Then they might listen harder.
      Have you made an error in spelling the Telstra person? Maybe Donald McGauchie? Not interested in gossip about rellies.

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    10. Greg North

      Retired Engineer

      In reply to Graham Walker

      Read up on the Dennis version Grahamn
      " Blaming unions is pretty damned stupid seeing as most of the german manufacturers seem to get along pretty well with works councils, collective bargaining and high levels of unionism - as do the Japanese: maybe some Australian union leaders are also stupid, but the bosses are still the bosses and as much as anything responsible for the tone aned quality of industrial relations. "

      It's all the bosses fault and seeing as it would have been bosses somewhere that have gone with higher power cost developments, we could near say it's doubly the bosses fault..

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    11. David Arthur

      resistance gnome

      In reply to Geoffrey Harold Sherrington

      Thanks Mr Sherrington.

      There's a whole army of people all around the world looking at developing algae for biofuels; for example, even while funding the George Marshall Institute's campaign of climate science dissemblement (I've read some of your repetitions of those memes), Exxon were also funding Craig Venter's work on algae biotech.

      The Good News? It's crossed these peoples' minds that they want to keep their high-tech algae strains isolated from the surrounding environment in order to…

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    12. Mike Stasse

      logged in via Facebook

      In reply to Graham Walker

      The whole world is "close to bankruptcy"............ and it has NOTHING to do with unions and everything to do with Capitalism that utterly relies on debt to invest in growth for growth's sake, a system called FRACTIONAL BANKING, where debt grows FASTER than GDP causing the eventual explosion of financial problems evident everywhere........ not least Europe.

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  6. David Leigh

    logged in via Facebook

    Whatever happened to Australian ingenuity and the positive attitude that saw this country through so many crises?
    Songs were written and poems recited over centuries of adversity and many great inventions given away to other countries because we just did not get it and we still don’t.
    A large US company, after eighty-eight years on Australian soil, has decided to move offshore and suddenly it is the end of the world. Well it’s not. Australians have had eighty-eight years of training on how to…

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    1. Michael Hay

      retired

      In reply to David Leigh

      David, I heartily agree with your thoughts and ideas. What a pity that our Governmental Ministers for Innovation cannot comprehend what you are saying. Just think what could be done if like thinkers got together with enough funds to utilise what we are about to waste.

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  7. Geoff Taylor

    Consultant

    Like many economist's views, this describes the presumed basis of past events.
    Remy, the challenge now is "what to do?"

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    1. Greg North

      Retired Engineer

      In reply to Zvyozdochka

      So exactly what structural change would the Greens have happening Z....?

      It does not matter whether it is manufacturing agricultural industries, tourism or education, with international competition it's a case of being able to compete in international trade or have a lesser trading poorer country which we'll gradually see with wages what they are only being obtained by those who have work which will gradually become less and less.

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Glenn Tamblyn

      Glenn,
      So how did this lead to the local Chief saying that you could build a car in Asia for 1/4 of the cost here? Your statements might be right, but they hardly explain the situation. To do that, you have to look at costs.
      Seeing that Australia produces, or could produce, virtually all of the raw materials for a car, and given that it has designed cars from the ground up, where else does the cost factor arise except from labour?
      Look to the Unions.

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    2. Dennis Alexander

      logged in via LinkedIn

      In reply to Geoffrey Harold Sherrington

      For a start intellectual property (patents, design, trademaks, etc), secondly technological sophistication, thirdly incompetent and lazy managers, fourthly repatriation of revenues and attribution of costs, fifthly tarriff protection that insulated managers and workers from the outside world (yes, unions were in on that too, but not the prime instigators), sixthly government bail-outs which hide productivity problems, seventh some lazy and incompetent workers (and that largely independently of unions) ... the list could go on.

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    3. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Economies of scale is the big killer. If you are paying wages for a production line that is intentionally running slow to reduce production volumes then those wages are wastage no matter what the actual level of the wages you are paying. Wages in Europe aren't lower than here. Production volumes and productivity is higher.

      Ford are down to producing fewer than 20,000 Falcons a year. In contrast major overseas car plants produce multiple 100's of 1000s of units a year. Volkswagons giant Wolfsburg…

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    4. Geoffrey Harold Sherrington

      Boss

      In reply to Dennis Alexander

      Dennis, A fair part of the federal government is trade unionists or people like lawyers who specialised with them. So much of your list when added to direct union activism accounts for much of what I assert. As for lazy workers, how do you terminate them under Australia's crazy IR laws (again inspired by unions).
      Look, you can't assert that it costs 4 times as much to make a car in Australia as in Asia without including a very large slab of worker pay. You can't write much off as materials or technology gap. There are probably some tax differences like carbon tax, but not enough to explain a quarter of the cost. So what are you left with? Militant unions who cut off their noses to spite their faces. It's the major factor. I would guess that the next would be economies of scale coupled with the tyranny of distance for exporting.

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    5. Geoffrey Harold Sherrington

      Boss

      In reply to Glenn Tamblyn

      Glenn,
      Mostly in agreement, but why are you so afraid of calling out the black hat union guys?
      This is familiar turf. In the late 1980s I worked under Charles Copeman, the Rhodes Scholar (and not a lazy boss) who retrenched many managers and some 1,000+ workers at Robe River Iron mine in WA, inviting them back with no union membership. Most came back, the company moved from loss to profit, the safety record jumped and some guys said they were far happier working in an environment where they were not troubled in conscience by forever breaking the law or being coerced into doing silly things like striking because there were not enough flavours of ice cream in the free mess.
      More recently, I helped install some new gear at Broadmeadows and was able to judge in a rough way just how productive the workforce was.

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    6. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Geoffrey.

      Read my previous comment. Economies of scale is the big big issue. Everything else comes second to that. You need to produce enough vehicles before you can get anywhere near break even. Development costs and sunk capital costs are the big factor in what your break-even production volume is.

      And a fair part of 'the government' is public servants. They do 99% of the work of government.

      How much actual experience do you have of automotive unions. Or was your comment just a cut-and-paste generic bias against unions?

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    7. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Just saw your previous comment.

      Yes, things aren't good at Broadmeadows, haven't been for a long time. But I don't put that down specifically to the unions.

      It is the entire culture there of which the unions are just one part. And a significant part of the issue is demoralisation. When things are bad all parts of the culture start to become defensive, protecting themselves and their turf in what is seen, validly, as an environment where everyone is under threat. I would absolutely hate to have…

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    8. Glenn Tamblyn

      logged in via Facebook

      In reply to Geoffrey Harold Sherrington

      Geoffrey, specifically wrt your comment about the 1980's. Yes, much union culture was bad then. But that was decades ago. Many (although not all) unions have transformed themselves since then.

      Criticism of unions cannot be on the basis that they are all tarred with the same brush. They aren't, any more than all business people are the same.

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    9. Geoffrey Harold Sherrington

      Boss

      In reply to Jack Arnold

      Jack,
      No, not much. Work it out.

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  8. Frank Moore

    Consultant

    What a debacle! Countless Billions wasted over decades subsidising a foreign car maker, effectively limited to the domestic market, and so dependent on the directions of their Detroit masters that the so called Chairman of this taxpayer funded outfit received his close down orders via email! Australia not worth a phone call.
    Contrast this to the tiny country of South Korea. Who subsidise and protect national brands in their national interest.
    The entire globe is their market.
    What lemons we have…

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  9. Alan Stenhouse

    Chief Monkey

    The same mistakes repeat themselves... Both management and govt (and others) are at fault - for trying to stick with the status quo and not looking to the future. (Coal mining anyone??!!) As someone else has responded (and exactly what should have been done in the States a few years back) - the factories should be converted to make windmills, solar and other newer technologies that will be useful and necessary in our joint futures. Perhaps even other vehicle types...

    Crisis = opportunity.

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Alan Stenhouse

      Alan, I'm over 70 now and I don't notice any crisis. Has something dreadful happened to you lately? My regrets if it has.

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  10. Alan O'Neill

    Freelance Consultant / Inventor at freelance consultant

    The Ford closure reflects US Ford global strategy..nothing more.. and a Ford is not an Australian car.

    An Australian Car company would have been organised to build either premium and/or small cars for the Asian market and for Australia, making use of the Australian and not US branding. Ford and GM would never allow this. They only needed to build here due to tariffs, and when these dropped away, because the Australian market was unique as regards environment and/or engine size/type demand…

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    1. Glenn Tamblyn

      logged in via Facebook

      In reply to Alan O'Neill

      One idea that has been floated is that maybe a Chinese or Indian car maker might buy the Ford Australia plants. They certainly have a more entrepreneurial spirit where cars are concerned (and occasionally a rather cavalier attitude to protecting IP rights as well)

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    2. Frank Moore

      Consultant

      In reply to Glenn Tamblyn

      Glen Tamblyn, your attitude - yet another example of cargo cult Australian low risk, cringing groping for an easy "let them look after us" - is the reason we have wasted the potential productive capacity of our cities for the entire post war period. Strong stuff, but listen to yourself. WHy on earth would any Chinese or Indian car maker want to manufacture in Australia? To increase their costs 8 fold? To leverage the threat of mass sackings to gain policy advantages pertaining to defence, mineral and agricultural rights?

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    3. Jack Arnold

      Director

      In reply to Glenn Tamblyn

      Hi Glenn ... this is surely a poor second choice to being Australian owned and operated while developing electric vehicle technology funded by the $600 million per year now available due to Fird exit.

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    4. Glenn Tamblyn

      logged in via Facebook

      In reply to Jack Arnold

      Frank & Jack

      Having an Australian take-over of Ford would be the preferable course. I just think it is unlikely, sadly. And in the modern world, the idea of a national car industry is dated. No company can be viable based just on targeting it's domestic market. Everything is global companies or global partnerships. That is the only way they can be viable. That isn't to say that local companies couldn't enter into partnerships with foreign companies to launch a global business. But they would need…

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    5. Greg North

      Retired Engineer

      In reply to Alan O'Neill

      Alan, there's one thing you as many people ignore and that's competition.
      " An Australian Car company would have been organised to build either premium and/or small cars for the Asian market and for Australia, making use of the Australian and not US branding. "
      It'll not matter what branding we have nor maybes for you'll find Asians are already way ahead of us with R&D and keeping manufacturing costs down.

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    6. Greg North

      Retired Engineer

      In reply to Glenn Tamblyn

      " The US in contrast has always been very conservative yet jingoistic at the same time. Their belief that the good old US of A is the greatest country in the world, including being the best at business, has meant that they have been so busy believing it that they have forgotten about actually doing it. "

      Glen, you could say much the same about many Australian attitudes and just look at how our PM even feels there is a lot that Australians can do for Asia, complete and utter BS.

      Australia might…

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  11. David Arthur

    resistance gnome

    Back around 1998, a consortium of Australian vehicle components manufacturers, formed a consortium to build a prototype small-medium car. 

The project successfully developed a 100% Australian-owned, designed and built concept vehicle, which they named the "aXcess" car. The consortium's efforts were wisely applauded, but no more came of it.

    

~2007, the consortium repeated the exercise, this time employing a hybrid drive-train with much lower fuel use and CO2 emissions. This time, they called…

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    1. Frank Moore

      Consultant

      In reply to David Arthur

      David Arthur - the car industry and manufacturing is caught within a policy pincer movement consisting of two myopic camps. International Socialists who rule our current government academia and media love international treaties. Gilliard is more turned on by her communist comrades in the PRC pulling millions out of poverty than she'll ever be by any notion of a "nation" based, Australian owned and operated manufacturing outfit. She only mentions the word "Australia" because her advisers tell her…

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    2. David Arthur

      resistance gnome

      In reply to Frank Moore

      Mr Moore, you miss my point: where I refer to the Commonwealth "throwing money at the car industry", the rest of my comment clearly specifies the form which this money throwing should take - to wit, commissioning the aXcess consortium to build and supply its aXcess MkII vehicle (say, 10,000 such vehicles) to the Commonwealth public service fleet.

      Your remarks about International Socialism would have been relevant in the half century up to the 1970's. As Glenn Tamblyn's description elsewhere on this page show of the cultural transformation programmes (both manufacturing and cultural) undertaken at Holden since the 1980's show, such views are no longer applicable.

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    3. Frank Moore

      Consultant

      In reply to David Arthur

      David Moore, you miss my point - which is: Your vision of a aXcess consortium to build and supply its aXcess Mk11 vehicle to the Commonwealth public service fleet REPEATS the mistakes made all those decades ago when Ford, GM and Chrysler were invited to manufacture in Australia, behind protective tariff walls and enjoying taxpayer subsidies. You aim the manufacturing product / project at a DOMESTIC market only.
      What was needed was the development of a domestically owned and operated - that is, an Australian owned and Australian operated car manufacturing brand - aimed at the world market - not just Australia.
      Succeeding in this endeavour would depend upon reaching the numbers needed. Note, we don't need now - nor have we ever needed - a mass immigration program to make manufacturing possible.
      Countries who lose control of their borders are always consumed by negative governance and motivational problems. Check Sweden, Australia, France, U.K. and USA.

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    4. David Arthur

      resistance gnome

      In reply to Frank Moore

      Thanks Mr Moore, I understand your point perfectly well.

      You rightly point out that foreign-owned and controlled corporations may well make decisions favourable for their Australian operations and hence for the Australian economy as a whole - GM's decisions to allow Holden to progress into overseas markets, much as you describe - or may make decisions that are not favourable to their Australian operations - this has certainly occurred in the case of Ford, and possibly also for Mitsubishi and Nissan…

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    5. Frank Moore

      Consultant

      In reply to David Arthur

      David Arthur, good to spell it out. Note, I doubt any foreign owned and operated operation would make any decision with Australia's current and potential interests at heart.
      It is in Australia's national interest to have a viable and Australian owned and operated vehicle design and manufacturing center. Else, you are fulfilling the requirements desired by many on these pages to become a De-Developing or De-Industrializing, failed state.
      Tonight's revelations on 4 Corners, pointing to the priority…

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    6. Garry Baker

      researcher

      In reply to Frank Moore

      Frank I think you are on the money with most things here. Though Australia with it's 3rd rate leadership, sets the stage for everyday opinions, which in turn cause the 3rd raters to react. No think tanks driving the show, no strategists - just flag in in the breeze politics managing the country

      Australia: Losing 'know-how' economy?

      ... Well that's how CNN global news headlined the situation in big black letters a few days ago.

      The fact that the Ford Mo Co happens to be the…

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    7. Frank Moore

      Consultant

      In reply to Garry Baker

      You pretty well have it Garry IMHO.
      You need to factor in the annual multi billion dollar (all import orientated) overhead for taking in more consumers - almost none of whom are engaged or hope to be engaged in Export Orientated industries.
      The bloating of our population for the benefit of import orientated industries such as Retail, Home Building, Newspapers etc, structures us up NOT to be able to react.
      Hence the popularity of moving off needed infrastructure to PRIVATE debt / private equity…

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    8. David Arthur

      resistance gnome

      In reply to Frank Moore

      Thanks Frank. About the only point with which I might not quite agree is your last sentence: "Hence, manufacturing in all its aspects in the West and in Australia need to be protected at all costs."

      "protected at all costs" sounds a little hysterical to me, and smacks of the short-term throwing-money-at-problem that too often is the substitute for policy.

      I'd put it this way: "Hence, Australia should thoughtfully and intelligently engender its culture of manufacturing and technological prowess, thus enabling its manufacturing sector."

      I recommend Senator John Button's memoirs.

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  12. Garry Baker

    researcher

    Remy Davison - you are indeed, one of the few in Australia who has a handle on what this is going to do to us. De-industrialising Australia, sums it up - Or rather, the alternative Coup de grâce - as some of the chattering hordes would have it

    This article of yours a year ago, hits it on the money - Best call yet !

    https://theconversation.com/australias-choice-pay-for-a-car-industry-or-live-with-the-consequences-8305

    One might add, our lack of political nous about the ramifications of…

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    1. Jack Arnold

      Director

      In reply to Garry Baker

      And Donald Horn in "The Lucky Country" (1964?) forsaw the present debacle ... and was generally ignored.

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    2. Garry Baker

      researcher

      In reply to Jack Arnold

      Too true Jack - more than fifty years ago in 1964 Donald Horne wrote a best selling book called “The Lucky Country”…. a title abused for decades

      What Donald Horne really said within the book, was .....

      “Australia is a Lucky Country, run by second rate people, who share in its luck” …circa 1964

      To counter this observation, many years ago Canberra coined the term “Smart Country”.

      What rubbish they retail, the only smart businesses here are small businesses, Canberra has done little…

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  13. ian cheong

    logged in via email @acm.org

    I'm glad some experts believe our manufacturing economy is toast. Why don't the pollies wake up to themselves.

    Goran Roos was also worth a listen yesterday on breakfast - another who knows and can justify why we need a car industry adn need to spend money on it. Would have been a much better GFC stimulus package to invest in something worthwhile rather than funding flatscreen TVs and bigger school halls for everyone.

    http://www.abc.net.au/radionational/programs/breakfast/uncertain-future-for-australian-manufactoring-sector/4710410

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  14. Terry Mills

    lawyer retired

    We seem to be going through a natural evolution of the capitalist process which, with a compulsive lemming like inevitability, will hustle manufacturing production to the global centres of lowest cost.
    Over twenty yeras ago Ford started production in Thailand and I remember speaking a component maker who foreshadowed the shift of regional production to Thailand as cots in places like Australia outpaced Asia. The shift was evolutionary he said and I don't doubt that he was correct.

    General Motors…

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Terry Mills

      Terry,
      All very fine in theory, but who is going to bring new investment to Australia when electricity is so expensive because of no nuclear and too many alt energy high-cost installations already? Having been in the industry, I can tell you that a large metal melting company (such as for making engine blocks under very precise temperature control) would snigger at the thought of using windmill power and go to a country where reality overcomes dogma.

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  15. Lee Emmett

    Guest House Manager

    Germany, with a highly unionised workforce in the manufacturing sector, is able to make quality cars, both for their domestic market, and for export. The answer is not to get rid of unions, but to involve all the workforce in decision-making at all stages in the process of production.

    Australians are good at manufacturing - we have a history making cars, trucks, boats and planes, and although the world's changed (with floating dollar and reduced tariffs) we are very smart developiong technology, and have plenty of raw materials, so perhaps we could consider getting better at being more confident about Australian investment (eg. perhaps accessing investment funds via the huge capital available in superannuation funds, subject to stringent financial controls, of course).

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Lee Emmett

      Lee,
      After making some allowance for the passing of a few decades, please do re-examine the topic of unions as told by one who took a very involved approach.
      http://www.hrnicholls.com.au/archives/vol8/vol8-5.php
      Your argument suffers because you don't have a comparison of with-union/without-union. Charles did. The decided answer was to get rid of unions.
      How else are we in Australia going to adjust to come nearer to neighbouring country work conditions? If we don't, we die the death of a thousand cuts.
      Seems to me that a smaller take home pay is better than no pay at all.

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  16. Alan John Hunter

    Retired

    My wife drives a VW Polo diesel 1.9 turbo. It goes like the powers of piss, and can get under 5/l per 100 km's.

    Can Ford or GMH match that?. NO!.

    As a demo model it cost $ 21,000, can Ford or GMH beat that?, NO.

    Thats why we bought it.

    The reason European cars are cheaper is,

    Modern Technology in building them.

    There are millions of very small cars driving around the UK alone, without alone Europe, the more there are the cheaper they are to build.

    It has nothing to do with…

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    1. Greg North

      Retired Engineer

      In reply to Alan John Hunter

      Alan, smaller cars will always be cheaper because you have less materials to start with and in Europe and the UK they certainly are popular because auto fuel there has always been even more expensive than what it is in Australia, a bit surprising actually given that middle east,Latin American and North Sea oil fields are somewhat closer so maybe it's a demand thing, especially maybe seeing as a lot of oil also goes into home heating systems.

      But that be it as it is, so the incentive is towards…

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    2. Alan John Hunter

      Retired

      In reply to Greg North

      Don't tell me I confuse things, the professional couple I was referring to were nice middle class English persons, my daughters who are also nice middle class persons both live there in shared houses and their story is the same, as it is for most nice middle class persons living in London, school teachers in 40's with no house and can't afford a good night out, wages are low, rent and transport costs are high. People can't live on the minium wage and some employers are paying below that.
      You are the one who is confused, your union bashing has blinkered you to reality.
      Every country with a GENERAL high stanndard of living has high wages, that is an irrefutable fact, low wages mean a large disparity berween rich and poor another fact. Look at the once mighty USA wages have been dropping in real terms as the country slides ever increasingly faster down the gurgler.
      The GFC wasn't caused by the unions it was caused by greedy capialists.

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    3. Greg North

      Retired Engineer

      In reply to Alan John Hunter

      Alan,
      It does not matter how middle class the couple or your daughters are as you have witnessed for it is just the numbers of people wanting to squeeze into London and immediate surrounds, that having come about because of a lot of immigration that was occurring before the GFC.
      Certainly the GFC affected work availability and what wages might be offered for some employment but competition for work in the UK had started well before the GFC with the UK and the EU having open borders.
      The UK economy…

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  17. Alan John Hunter

    Retired

    Geoffrey Harold Sherrington your seem to disprove the theory that wisdom comes with age.

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    1. Geoffrey Harold Sherrington

      Boss

      In reply to Alan John Hunter

      Alan Hunter,
      You write "When you take something from somebody you are both poorer."
      The wisdom of age accepts exceptions to your generalisation. I'm trying to say that if you take unions from our industrial system, those who remain are NOT poorer. I gave an important actual example above.
      Data trumps belief.

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    2. Alan John Hunter

      Retired

      In reply to Geoffrey Harold Sherrington

      It seems rather strange that countries with good wages and a high general level have strong unions, whilst those with low wages and a greater disparity between rich and poor have no or weak unions.
      Now I wonder why that is?
      I suggest you ponder on that one for a while.
      You might also ponder on the fact that countries that socialise the wealthy e.g. USA, UK and Greece are the ones that are the worst affected by the GFC.
      Whilst others who socialise everybody are the least affected.

      Your anecdotal…

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    3. Geoffrey Harold Sherrington

      Boss

      In reply to Alan John Hunter

      Alan, It's beat news that you are not much different in years to me, because you still have time, god willing, to reform your ideas to something realistic and observationally accurate.

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    4. Alan John Hunter

      Retired

      In reply to Geoffrey Harold Sherrington

      I doubt that right wingers of your ilk, have ever viewed anything realistically and observationally accurate, as you see everything through the blue tinted spectacles of the IPA which obscures all reality.
      As you gaze through the blue spectrum it changes to red, and you see that communist conspiracies abound everywhere.
      As you can’t refute any of my assentation's, just retire gracefully, the GFC put paid to most of your right wing garbage, you just refuse to recognise that.

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    5. Geoffrey Harold Sherrington

      Boss

      In reply to Alan John Hunter

      Alan,
      My bet is that you can't even define what the GFC was.

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    6. Alan John Hunter

      Retired

      In reply to Geoffrey Harold Sherrington

      Oh, I can define what the GFC is alright, but I very much doubt that it would be the same as your definition, anyway according to your lot it never happened. BTW it ain't over yet, and there will be another because of the total irresponsibility of bankers and associated government bludgers.

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  18. Greg North

    Retired Engineer

    By the title Spelling the End of the Road for Manufacturing, the author is certainly stating that the Ford Closure is an indicator of Australian manufacturing industries ability to compete internationally.

    There are no doubt numerous factors involved and they have increased in number as more and more international manufacturing occurs, Asian companies already having moved manufacturing to Thailand and Indonesia because of cheaper Labour than what is available in Japan, China or Korea.
    http://www.economist.com/blogs/schumpeter/2013/04/thailands-booming-car-industry

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  19. Geoffrey Harold Sherrington

    Boss

    This topic has roamed far and wide and I'm hopping out now with a final comment similar to my first.

    Concentrate on the workforce. De-unionise.

    Economies of scale are not a full answer. Example. My employer used to make paper here. The machines for common papers used in big countries had up to 10 times the capacity, with large production cost savings. Australia could not put one in because of the high freight cost of the 90% that would need exporting. That's one side of a coin. The other side…

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  20. Andrew Warrilow

    Philosopher

    We are talking the collapse of manufacturing in this country and most of the comments here seem to be about car batteries. On the Titanic you guys would be rushing around checking if the light bulbs were eco-friendly or not.

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    1. Greg North

      Retired Engineer

      In reply to Andrew Warrilow

      It takes their mind off the fact that getting the ship back up out of the dark deep is a monumental task Andrew though you'd not want to dim their optimism.

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    2. Andrew Warrilow

      Philosopher

      In reply to Greg North

      I agree Greg. Whilst our leaders have been busy saving the world from global warming, the really hard stuff of ensuring a future for our economy has been neglected. My plan (which is mine):

      - put tariffs on autos back to 15% where they should have stayed
      - no GST on locally made vehicles
      - government to purchase local cars exclusively and business encouraged to do the same

      In return auto makers commit to stay in the country until, say, at least 2030 and no price increases on local models above inflation for next 10 years - basically increased market share in return for no excessive pricing. Although challenging, such a deal is possible to get through.

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