Sections

Services

Information

UK United Kingdom

Holden to cease making cars in Australia by 2017: experts react

General Motors Holden has confirmed speculation it will withdraw from car production in Australia by the end of 2017. The announcement by Holden comes after days of sustained public speculation and calls…

Chairman and Managing Director of GM Holden, Mike Devereux, has confirmed the company will cease making cars here by 2017. Julian Smith/AAP

General Motors Holden has confirmed speculation it will withdraw from car production in Australia by the end of 2017.

The announcement by Holden comes after days of sustained public speculation and calls from the federal government for the company to clarify its intentions.

Holden has said it will “transition to a national sales company in Australia and New Zealand” and “discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.”

GM Chairman and chief executive officer Dan Akerson cited a “perfect storm of negative influences”, including the sustained strength of the Australian dollar, the high cost of production, a small domestic market and highly competitive and fragmented market.

Holden said a total of 2900 jobs will be affected, comprising 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.

Attention is now turning to Toyota, which will be the single remaining car manufacturer in Australia. In May, Ford announced it would cease manufacturing cars by the end of 2016, with the loss of 1200 jobs.

Expert reaction follows:


Paul Gollan, Associate Dean, Research and Professor of Management, Faculty of Business and Economics at Macquarie University

Holden’s decision was very predictable and I don’t know why didn’t they announce it earlier. The issue is they were playing politics. One of the things that’s often forgotten is the federal government is one of the biggest single customers for Holden cars, so will they continue to support Holden in this way when they cease manufacturing?

Toyota must be looking at their own operations very closely to see if they are viable. Unless they export a lot of more, and given the high cost base in Australia that will be hard, they will continue to struggle. They could focus on more prestige areas like Lexus or sports cars – low volume high value – which rely on the level of skills we have in this country. But I’m still not sure that would work given global markets.

The reality is that large scale manufacturing of this type has very limited opportunities to grow and if we look at consumables, much of our manufacturing will continue to go offshore. We need to look at alternatives if we are going to continue manufacturing. High value products that quite obviously require a great deal of skill and high levels of qualification when it comes to labour, then certainly we have proven that we can achieve those sorts of outcomes.

Just look at Cochlear in medical devices. We can do it in niche areas. We need to think in a more strategic and sophisticated manner about what we are good at and try to focus around those areas, and the government should focus assistance to those.


Phillip Toner, Honorary Senior Research Fellow Department of Political Economy at University of Sydney

Nothing was inevitable about it, however it comes down to (whether it was) possible to reach a renegotiated arrangement to retain the production facility, reflecting the incredibly adverse affect of the high exchange rate. What’s pretty clear is the hostility of the current government and parts of the former government to the industry – you can only describe it as indifference or hostility – and that’s probably a decisive factor.

This will make it so much more difficult for Toyota given the part makers will lose so much scale that their unit cost will become prohibitive. There will come a point where there’s really not much in it for Toyota. It’ll simply be assembling 80% to 90% of a vehicle from imported parts.

The other thing to note is there is no economic logic behind failing to deliver a reasonable level of assistance. The net returns to tax payers are many, many times the level of assistance. The Productivity Commission estimated assistance was A$1.1 billion and that supported an output of A$21 billion.

And of course there was the over A$600 million the auto sector invested in R&D. It’s really unlikely, in the long term, that an R&D facility can be supported without a production facility. You can’t disassociate R&D from production in the long run given how intimately related they are.

The demise of the motor industry will see a rapid contraction in the remaining manufacturing industry and it will lock us into resource development as the key economic driver. The implications of that are quite severe, that we’ll have no option but to degrade the environment, and the sorts of risks the national economy will be exposed to if dependent on resource extraction is really extraordinary.


Henry Ergas, Professor of Infrastructure Economics at University of Wollongong

The announcement that Holden will cease its manufacturing operations in Australia will obviously have significant consequences for Holden’s employees and for Holden’s suppliers, as well as for the communities in which they are located.

Governments should do what they can to assist in smoothing the transition that lies ahead. Unfortunately, the fact that previous governments lacked the courage to face up to the inevitable means those adjustment costs will now be higher than they need to be, as the car industry attracted resources away from viable and competitive activities.

The reality is that our labour costs are extremely high by international standards and have risen further in recent years. Moreover, productivity levels are low, and labour force flexibility is even lower. With a further tightening in domestic environmental standards for cars looming, there is no realistic prospect of the Australian industry achieving the levels of competitiveness that could allow it to survive.


Hamza Bendemra, Doctoral Candidate of Engineering at ANU

Any news that involves losses of Australian jobs is of course unfortunate. Job losses associated with this news go beyond the reported figure of 3,000 Holden workers as there is an entire ecosystem of suppliers and contractors, typically SMEs, that deals with car manufacturers. The car industry is also a contributor to R&D research in Australia through various projects either held in-house or in partnership with Australian universities.

Several billion dollars of taxpayer money has already been spent supporting the industry but I believe more may be needed for government to offer assistance with this new influx of highly-trained technicians and engineers that will enter the job market when Holden finally closes shop in 2017. The form in which such assistance can be provided may differ depending on the individual circumstances but making sure that those skills are appropriately transferred to other industries will be key.

This news, as well as the struggle for other large companies (like Qantas) to keep a profitable base in Australia, only reinforces that a long-term strategy is needed to move towards building a highly-skilled and specialised workforce that would enhance the value proposition for companies to stay in Australia.


Liz van Acker, Senior Lecturer in Government and International Relations at Griffith Business School

Holden’s announcement that it will stop producing cars in 2017 is no surprise. Neither is it a shock that the Federal Government will not “rescue” this manufacturing company.

To do so would require breaking free of the historical policy legacy of excessive protection and assistance, leading to a fragmented and small-scale industry over decades of managed decline.

Perhaps the Rudd/Gillard Labor government prolonged the life of the car industry, but it was unable to take action apart from maintaining an ethos of survival. Despite its rhetoric of manufacturing revitalisation, it presided over a sustained fall in the size of the manufacturing sector and the automotive industry.

For decades, governments have missed the opportunity to develop a “green” car industry policy as part of an integrated approach to economic growth, employment and environmental sustainability.

It seems that it is now too late to re-engage Holden or to employ a more innovative approach and develop environmental policies. Industry policy has incorporated managed decline as the best way of keeping the ailing car industry from going to the wall.

The seemingly never-ending rescue missions continued at the expense of pursuing productivity and longer-term economic diversity. Now the Government will not encourage innovation or promote international investment. If anything, it will accelerate the process of managed decline.


Nick Economou, Senior Lecturer, School of Political and Social Inquiry at Monash University

The decision sends fear through the state governments of Victoria and South Australia where the direct impact of job losses will be felt most. The question now arises as to whether the long lead-time gives these state economies time to absorb the displaced labour, or if things will be made worse by Toyota also ceasing its operations.

The federal government will also express its disappointment, but the political reality may be that GMH has done prime minister Tony Abbott two favours – first, by announcing that closure will occur the year after the next federal election is due; and, second, by making the decision that they have, GM executives will spare Abbott the challenge of trying to reconcile a future fight within his ministry between protectionists and free traders over whether or not Australian tax payers should continue to subsidise local car manufacturers.

Join the conversation

80 Comments sorted by

  1. Mike Swinbourne

    logged in via Facebook

    Opposition Leader Tony Abbott on the closure of Ford:

    Opposition Leader Tony Abbott called the decision “a black day for manufacturing for Australia’’ and indirectly blamed the government, its carbon tax and other policies. “It’s incumbent on everyone associated with government in this country to do everything we reasonably can to make it easier, not harder, for manufacturing to go ahead in this country,’’ he said.
    http://www.afr.com/p/national/ford_to_pull_out_of_australian_manufacturing_1y7BTSXmf5L0XWQQxfuwNJ

    Deputy Prime Minister Warren Truss on the closure of Holden:
    Mr Truss rejected Labor's suggestion that the government was to blame, saying he had been advised that government action had little to do with the carmaker's decision.
    http://www.smh.com.au/federal-politics/political-news/blame-game-erupts-in-parliament-over-holden-decision-20131211-2z5pl.html

    Can this lot get any more hypocritical?

    report
    1. Henry Verberne

      Once in the fossil fuel industry but now free to speak up

      In reply to Mike Swinbourne

      I doubt if they can be any more hypocritical than they already are Mike ! They are so far along the hypo criticality index that I doubt any more movement in that direction is possible.

      report
    2. Mark Amey

      logged in via Facebook

      In reply to Henry Verberne

      Did you mean 'hyper' criticality?? Given that 'hypo' means 'less than' or 'below'.

      report
    3. John C Smith

      Auditor

      In reply to Mike Swinbourne

      GM in Detroit made the decision. A car sold in OZ for about 11K is made in cheap labor country. CIF about 3K and the wholesale about 8K. Why should anyone make cars here or even in US where labor cost is half.

      report
    4. Chris Saunders

      retired

      In reply to John C Smith

      So that's the simple argument, somewhere on this earth or maybe even Mars it can be done cheaper. Point is you will always find someone to do it cheaper except in some extremely rare circumstances. So do you think then we all ought to down tools wherever we are and just go home?

      report
    5. Terry Reynolds

      Financial and political strategist

      In reply to Mike Swinbourne

      Sadly, as women gained more influence on economic decisions, we have become the "woman's handbag" economy. They go for bulky expensive handbags and need a new colour or design every year. That is why Jeep successfully marketed to women in its, "I bought a Jeep" campaign. We see all these mums driving around in huge imported four wheel drives applying the same thought processes as buying a handbag.

      Holden and Ford make practical family size cars for large Australian bodies and families. They overlooked…

      Read more
    6. Mike Swinbourne

      logged in via Facebook

      In reply to Terry Reynolds

      Hey! I bought a Jeep as well - and my wife drives it! But in my (and her) defence, it is a Wrangler (a real 4WD) and 90% of her driving is off-road over some pretty rough terrain.

      But I agree with you about getting what you pay for. The only trouble is, Tony's big business and big media mates are reaping all the benefits of their decisions, while it is the rest of the country which is suffering.

      report
    7. Geoff Henley

      Research Associate in Health Statistics at Flinders University

      In reply to Terry Reynolds

      "Can this lot get any more hypocritical?"

      What about the hypocrisy of the Unions?

      When Ford and Mitsubishi pulled up stumps, did the Unions blame the then Labor Government. Now that Holden have pulled up stumps, all of a sudden it's all the Coalition's fault.

      Union tactics such as featherbedding, excessive demands and restrictive work practices are a big reason than car manufacturing is becoming unviable in this country.

      Unions are supposed to protect their members, not make businesses so uncompetitive that they are no longer viable.

      report
    8. Geoff Henley

      Research Associate in Health Statistics at Flinders University

      In reply to Geoff Henley

      Oops, this was a reply to Mike Swimbourne, not Terry Reynolds.

      report
    9. Chris Saunders

      retired

      In reply to Geoff Henley

      Geoff, just the facts:
      1. Devereux had brokered an enterprise bargaining agreement with the unions that enshrined a three-year wage freeze and won an extra 16 minutes of work time per employee a shift.
      2. Devereux told the Productivity Commission he did not have to eliminate the entire $3750 gap, just enough to keep his masters happy.
      3. Devereux said "GM, where possible and where feasible, the general philosophy of our company is to build where we sell."
      4. Holden management had been in commercial-in-confidence discussions with the government for months.
      5. For GM it was simple Australia was suffering a severe case of Dutch disease.
      They wanted a public-private partnership over the long term.
      6. When Hockey and Truss called the company out in parliament, Detroit pulled the plug.
      That's it.

      report
  2. David Stein

    Businessman

    Dutch disease is alive and well in Australia. Just as the mining boom comes off and the currency is depreciating, the Abbott government has basically told Holden to pack its bags and go. It's astonishing that governments rush to tell workers they will do anything to assist sacked workers, but barely lift a finger to attempt to keep those jobs.
    Let's face it - Hockey was under pressure to prove his laissez faire credentials after being roundly criticized for the GrainCorp decision. A cabinet fight ensued between Hockey and the Industry Minister which Hockey obviously won. Now Hockey has to wear the job losses. We will also be able to see laissez faire economics in action. According to Mr Ergas, Mr Hockey and his ilk, Elizabeth and Adelaide should emerge as a vibrant thriving economy if only the government got out of the way and stopped providing 'damaging' government assistance. If you believe that, I have a bridge to sell you.

    report
    1. Tom Fisher

      Editor and Proofreader

      In reply to David Stein

      Stand back a little, detach yourself and be observant, David Businessman, and see new opportunity for your obvious entrepreneurial skills, as the rest of us have had to do; in the event far easier and far more effective than had been feared, and very quickly far better off.

      report
    2. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to David Stein

      Victoria and Adelaide David. Close to 200,000 people will be feeling vulnerable. We will probably have a change of government at the next election. There is no doubt, restructuring, the dollar, and the Australian market, (small/overly diverse by world standards) have impacted this situation, but Joe and Warren have (nailed it).
      No surprises considered and orderly, we were told this government would be. What a crock. Rampantly destructive is what we have. The flow on cost to the Australian economy is 21.5 billion. Good economic managers these people are not.
      http://www.caradvice.com.au/258192/australian-automotive-manufacturing-industry-exit-cost-economy-21-5b/

      report
    3. Chris Saunders

      retired

      In reply to David Stein

      It's the hostility displayed by Hockey towards Holden in parliament that I find difficult to understand. Yes, I know the LNP are bullies, but to call a respected firm like GM out during parliament does not give me any faith that Australia is open for business at all.

      report
    4. wilma western

      logged in via email @bigpond.com

      In reply to Chris Saunders

      What about Tony's statement "We're not going to run down the road after them waving a cheque book"??
      Now he's all complimentary about the Holden workers " these are all highly skilled people " etc. Didn't speak to Devereux at all after the election until this a.m. Devereux was talking to Mc Farlane who must be bitterly disappointed at the events of the last week. Of course he was the Coalition Shadow Minister trying hard to get an agreement re the Labor ETS ' negotiating with then Climate Change minister , Penny Wong. Soon after , Abbott got elected Leader and everything changed.

      It would be great to have an expert consultation and bipartisan approach - for example a parliamentary joint committee calling expert submissions to at least start on "Plan B" etc ....can we look forward to such a huge change in our political scene?

      report
    5. Pauline Billingsworth

      Anthropologist at UOL

      In reply to wilma western

      What happened to Labor's 2022 agreement with Holden to stay manufacturing until then? What were the critical assumptions? I would like to know. Sounds like GM were out of here sooner and Labor told know one!

      report
  3. Tom Fisher

    Editor and Proofreader

    Yes, I agree, an inevitability which might have been announced more promptly and clearly for all the reasons given, and many more discussed here further over the past week.

    I am less inclined to point the finger wholly at General Motors, however. The ACTU and the Victorian left wing with their behind the scenes machinations, and not least over a very long period for pushing up wages above lagging technology and reasonable productivity standards also need to be more forthcoming.

    The US motor…

    Read more
    1. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Tom Fisher

      I'm not so sure that the unions and wages are to blame. Adelaide Holden workers accepted a wage freeze, and deferral of a wage increase of 3%, in August. Some think that the car industry in Australia, based on the american model, as you say, meant that we weren't learning from european success. If we do start to build new technology cars, I hope they are good.

      report
    2. Rene Oldenburger

      Haven't got one

      In reply to Alice Kelly

      That's wrong, they went for a pay rise instead

      report
    3. Tom Fisher

      Editor and Proofreader

      In reply to Alice Kelly

      Not blaming anybody, merely making an observation that there is far more to all this than meets the eye.

      The simple fact is that, regardless of all else, the costs of production here like the costs of government are far to high against actual productive output, the most part of that being wages and salaries.

      Europeans? Well, yes, I've been watching Citroen and Peugeot from many years now, to me like the French generally the most innovative, but for us all fades into insignificance against Asia…

      Read more
    4. Gary Murphy

      Independent Thinker

      In reply to Rene Oldenburger

      No - they accepted the pay freeze in return for a commitment to stay in Australia. Which Holden reneged on and hence the deal fell through.

      report
    5. Rene Oldenburger

      Haven't got one

      In reply to Gary Murphy

      So they took the pay rise instead

      report
    6. Gary Murphy

      Independent Thinker

      In reply to Rene Oldenburger

      Well, if you want to play semantics. They 'got' the pay rise instead of a commitment to remain in Australia because of a decision by management.

      report
    7. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Tom Fisher

      "regardless of all else, the costs of production here like the costs of government are far to high against actual productive output, the most part of that being wages and salaries."

      There's a *very* simple solution to this problem : currency devaluation. It would improve the competitiveness of Australian workers and producers both industrial and agricultural, in both the export market and domestically. A floating currency is meant to let devaluation happen "automatically" as the balance of payments…

      Read more
  4. Robert Tony Brklje
    Robert Tony Brklje is a Friend of The Conversation.

    retired

    Toyota is pretty much guaranteed to stay, why, obvious as the last Australian manufacturer of vehicles it will have a huge marketing advantage, something that Toyota would be very stupid to give up. It will push to gain sales in every avenue of government and private industry. Military transport, police vehicles, government vehicles and in will give it a real marketing advantage in the retail market.
    The onus is still upon government to ensure that imported product competes upon a equal basis with locally produced product. A regulation induced cost impact on a locally product should be equally applied to an imported product.
    Of course under the Liberal Party this will never ever happen, as the sole focus is breaking the back of the Australian working class and pushing the back to working in poverty, so the Liberals et al can have cheap gardeners, maids etc.

    report
    1. Tom Fisher

      Editor and Proofreader

      In reply to Robert Tony Brklje

      It still needs to be made explicit, apparently, that Ford, Chrysler and General Motors are American companies, while Toyota is Japanese. Mitsubishi were merely an Australian partner with Chysler having taken over their faltering operations way back then, when the Valiant and the new Hemi failed.

      My best is with signing of the new FTA with them, not too far down the track we will see the Koreans here too, part of the broader Asianisation of this country.

      Watch the space.

      report
    2. Rene Oldenburger

      Haven't got one

      In reply to Robert Tony Brklje

      Strange, Joe Hockey clearly stated that Toyota workers should accept some offer that comes on the table on Friday, now lets see what the unions do and what they recommend

      report
  5. Notta Mehere

    logged in via Facebook

    if, years ago, car manufacturers had started designing and producing cars that people wanted (economical, designed for australian conditions, etc.,) then we'd have a vibrant industry today.

    as it is, we'll probably end up like nz - a dumping ground for various manufactures old or non viable models - which wouldn't be such a bad idea ;-)

    report
    1. David Arthur

      resistance gnome

      In reply to Notta Mehere

      Perhaps you'd care to comment on the following?

      How about Australia's vehicle components manufacturers form a consortium and take Holden's operation over?

      They could call the consortium "aXcess", and start manufacturing an updated version of either the aXcess small-medium car from 1998 (http://museumvictoria.com.au/collections/items/289292/motor-car-axcess-australia-concept-car-1998), or the aXcess Mk II, the small-medium hybrid-powered update (http://news.drive.com.au/drive/motor-news/government-grant-for-axcess-mk-ii-20100823-13ge7.html

      Read more
    2. Peter Hindrup

      consultant

      In reply to Notta Mehere

      '(economical, designed for australian conditions, etc.,) '

      The most ridiculous con every inflicted upon the credulous!

      'Australian conditions' means what exactly?
      Does any part of Australia require that tyres be switched to winter/summer units at fixed periods of the year? Does Australia have areas where snow ploughs operate during winter and where it gets stinking hot in summer?
      Thought not.
      But the terrain! Where is it as extreme as on other countries across the planet -- where are the roads at extreme altitudes, the truly mountainous country, the extremes in temperature from night to day?
      But Australians like to think that the country is somehow 'exceptional', or at least manufacturers have made a killing on pedaling such nonsense.

      report
  6. Mike Swinbourne

    logged in via Facebook

    It's all Labor's fault. It's the carbon tax. It's the unions. The MRRT is to blame. All those child care workers getting too much money. Illegal immigrants blocking the roads. Gonski. The debt crisis making our economy unsustainable. Climate scientists committing fraud. There was an earthquake. Flood. Cyclone....... It's not our fault!!!!!!

    report
  7. David Arthur

    resistance gnome

    So what's the Czech Republic (population ~10.5m) got that Australia doesn't? Skoda.

    What's Sweden (population ~9.5m) got that Australia doesn't? Caresto, Esther, Koenigsegg, Saab, Volvo

    report
    1. Pauline Billingsworth

      Anthropologist at UOL

      In reply to David Arthur

      Czech Republic - More reasonable wage rates for its workers that allow Volkswagen to run its Skoda plant, and better export markets. Thank the unions for putting Australian workers out of business.

      report
    2. David Arthur

      resistance gnome

      In reply to Pauline Billingsworth

      "Thank the unions for putting Australian workers out of business." Err, we're getting a lot of that meme today. On behalf of your usual victims (err correspondents), I'm nevertheless delighted to welcome you back to 'TC' anyway, John Coochey/helen stream.

      As I say, we've been getting a lot of that meme from the usual suspects - Greg North and Ken Inglis, for example. I recommend the exchange between myself and Mr Inglis following an initial comment by David Stein at https://theconversation.com/holden-is-one-piece-in-gms-global-restructuring-puzzle-21317

      Read more
    3. David Arthur

      resistance gnome

      In reply to David Arthur

      I wonder what GM-H's departure will do to the $OZ? my guess is it will bring it down to a level where we'll be paying through the nose for imported cars, even without Joe Hockey acquiring all that debt overseas - which he'll want to do anyway because Holden's closure means taxation revenue is going down the tubes.

      report
    4. Michael Ekin Smyth

      Investor

      In reply to David Arthur

      It would be very difficult to calculate any impact on the value of the $Oz. Canberra will initially be better off - as it saves the massive subsidies it was providing. If the 2,000-3000 workers are quickly re-employed in other, preferably subsidized, industries, there will be no loss of other tax revenue. Declines in turnovers in ancillary industries may hurt but then they have a number of years to adapt.
      Vehicle building was never a big money spinner for Oz.The opportunity costs of supporting it were considerable, and they will now be removed. Holden's manufacturing demise is symbolically important but likely to be financially negligible.
      The real money is in other parts of the economy: mining, financial services, retailing, etc. The growth industries are online, new materials and biotech.
      .

      report
    5. David Arthur

      resistance gnome

      In reply to Michael Ekin Smyth

      Thanks for that reply, Mr Smyth.

      My pondering the effect of Holden's shutting down on the value of the $OZ was based on how the cessation of much manufacturing industry (Holden's supply chain) would have on GDP. There would still be as much $OZ floating around, but its net backing will be a smaller GDP.

      "If the 2,000-3000 workers are quickly re-employed in other, preferably (un?)subsidized, industries, there will be no loss of other tax revenue." To me, that seems to be a very big "If…

      Read more
  8. Sean Arundell

    Uncommon Common Sense

    Phillip makes an axcellent point here imho " What’s pretty clear is the hostility of the current government and parts of the former government to the industry – you can only describe it as indifference or hostility – and that’s probably a decisive factor. This will make it so much more difficult for Toyota given the part makers will lose so much scale that their unit cost will become prohibitive. There will come a point where there’s really not much in it for Toyota. It’ll simply be assembling 80…

    Read more
    1. Gary Murphy

      Independent Thinker

      In reply to Sean Arundell

      As usual Mr Ergas completely ignores the real cause to push his idealogical barrow - the high $A. Why was it allowed to stay so high for so long?

      report
    2. Sean Arundell

      Uncommon Common Sense

      In reply to Gary Murphy

      He wouldn't know mate. He's an Economist. It's all 'thesis and hypothetical' through the rear view mirror. Present reality and tomorrow is irrelevant. Not part of the skills set.

      report
    3. Chris Saunders

      retired

      In reply to Sean Arundell

      Sean, I agree completely with your comments about the experts on this topic. I had exactly the same reaction: "Do we really live in the same place?" and "have they any real experience of real countries".
      They seem to share common mantras from the most far right wing (and one would have to say ignorant) of free marketers' made-up songbook; a free market situation, it really should be pointed out to them, never really existed. It is quite despairing that there was not one idea amongst them…

      Read more
    4. Chris Saunders

      retired

      In reply to Chris Saunders

      Apologies everyone and 'The Conversation' on my last comment the Andrew Beer article "Moving on: Holden closure shows...." in this same edition has imagination and ideas in both the article and comments.

      report
    5. wilma western

      logged in via email @bigpond.com

      In reply to Chris Saunders

      There's a lot of lazy commentary around especially among journos politicians and "academic" political commentators.

      We do need some serious forward thinking and then big efforts to propagate and foster credible ideas and scenarios coming from the community....even Mc farlane's Productivity Commission idea was a small step in that direction.

      Suggestions? Not short -term summits , thanks , but longer-term properly-funded consultations involving parliamentary committee work???

      report
    6. Chris Saunders

      retired

      In reply to wilma western

      Wilma, anyone would think we are a generation of irresponsible children that Santa has disappointed and so have decided we hate him/her. Holden was an icon no matter what we may be saying now. Its loss hits deep into the Australian psyche. Quite apart from the outrage we feel when people are unnecessarily thrown out of work. The journos, the economist and the politicians are saying basically that it is all these Australians grasping at their Australianness that is the backward thinking that is…

      Read more
    7. Alice Kelly
      Alice Kelly is a Friend of The Conversation.

      sole parent

      In reply to Sean Arundell

      I agree Sean, "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country", Dan Akerson.
      This is highly likely to be as much about Joe Hockey and Warren Truss, and their pre-emptive red-ragged aggression, before the Productivities Commission's car industry review had even finished.
      "negative influences" is a good description of their behaviour. When you consider the amount of subsidies and tax concessions which help…

      Read more
  9. David Lees

    Consultant & Coffee Drinker

    Being a HOLDEN 'tragic' I am saddened by today's announcement.

    But I feel devastated for the workers & their families that have and will be affected both directly and indirectly buy this decision.

    Reading all the comments in the media today ... 'blame' seems to be the order of the day. The current Government, past Governments, Holden etc.

    I just want to put my 2c in the ring.

    Had Holden & Ford been able to sell their cars, then perhaps this may have been a different outcome.

    At the…

    Read more
    1. Tom Fisher

      Editor and Proofreader

      In reply to David Lees

      Show some class? Here? In Australia?

      Mate, it's a booze-driven free-for-all, an abusively philistine Ocker landscape especially favoured by the union dominated Bastard Boys; our parliament is theatre . . . of course, what else?

      Just try for a moment a reasonable level or decorum, erudition, consideration and thoughtfulness, and argument based on informed fact and logic and reason, you won't be laughed out of the parliament you'll just as likely get run out of the country, as some sort "bloody…

      Read more
  10. Trevor Kerr

    ISTP

    Labor politicians have had a lot of fun today with the "Joseph Benedict" tag. I'd be surprised if Ms Plibersek has ever owned a Holden, though. More likely a Subaru, then up to Peugeot.
    Since we've had decades to use our "smarts" to engineer ourselves away from such dependence on oil derivatives, it's not likely any sense of urgency will re-direct the passions from sports & entertainment. (Someone I know has completed a PhD on an alternative energy source, and is off to EU to work on conducting polymers.)
    So, to Nick Economou, are the outcomes from this turn of events going to keep cascading down through the manufacturing sector, the community well-being and the economy? If so, I'll be busy lettering up my slogan for the next election - "We will abolish negative gearing on Day One". Either that, or start learning Mandarin.

    report
  11. Pauline Billingsworth

    Anthropologist at UOL

    Well there goes Gillard's $275m down the drain and the promise by GM to manufacture until 2022. Was this agreement written on one of Conroy's inflight drink coasters? Woeful!

    report
  12. Trevor Kerr

    ISTP

    On that short speech by the PM, what's going through his mind? Is he fair dinkum? Is he really struck by the perilous situation of R & D in Oz, sufficiently to put real $$ back into it? A Govt response "in the next few days" he said. At least he thanked Mike Devereux, so maybe he sees Economou's "two favours".

    report
  13. John Lyons

    Professional Engineer

    I think we need to stop referring to the "automotive industry". Modern automotive operations really consist of three parts, product engineering, component manufacture and vehicle assembly. Contrary to what I think Philip Toner is saying, most manufacturers are splitting these into different countries because they need different work force education levels at the lowest cost. This is how they achieve the lowest overall cost.
    Australia is cost competitive in vehicle product engineering and has the…

    Read more
    1. Tom Fisher

      Editor and Proofreader

      In reply to John Lyons

      I wouldn't be worrying about the professional engineering end of the spectrum, John.

      UWA Engineering Faculty for one has its own design and racing team with no manufacturing or assembly over there at all, aside from Orbital which is a research facility.

      They re-engineer mostly Honda 600cc engines to their own specification fitted into carbon fibre monocoque bodies with full or part space frame chassis, and I note recently that they have developed a dual high-torque electric micro-racer.

      Lang Lang might perhaps be passed to our universities, as the best long-term option. I would certainly favour such a move, with closer collaboration with Ford and Toyota for example and our tertiary sector.

      We can excel there.

      report
  14. Tom Fisher

    Editor and Proofreader

    I will make this last disclosure here before I log off this thread, because it's important background and people do need to know the fuller story than what has been presented of late.

    If you bought a Toyota, or a Mazda or Honda, it didn't matter much from where in the production run for that model the car was assembled, because they were all good.

    If you bought a Ford or Holden, the rule of thumb and good advice was to never buy a car coming out of the early production run for that model. Most…

    Read more
    1. wilma western

      logged in via email @bigpond.com

      In reply to Tom Fisher

      Gee we've nbeen buying ex-fleet Commodores and they've been terrific - low service cost , engines last for donkeys years, suited to Oz conditions...one did have a problem with fuel pump but nothing on bro-in-law's hassle with 4WD Euro model.

      report
  15. Michael Ekin Smyth

    Investor

    It was a bit odd that successive Oz governments lavished billions in subsidies on 100 per cent US owned companies. Some observations on this long running industrial debacle:
    1. If any government subsidizes industry, those subsidies must be strictly time limited. If it doesn't work in ten years, forget it.
    2. Oz consumers have, since the 1940s, been paying over the odds for generally inferior vehicles. Often features common on US models took 5 years or more to be introduced to Oz. We gave them…

    Read more
    1. Carolyn van Langenberg

      Retired

      In reply to Michael Ekin Smyth

      I have enjoyed reading the thread, alerting me to many angles on this subject.
      There will be an election in 2016. What will the government be offering to the remnants of Holden then?

      report
  16. Gerard Dean

    Managing Director

    it is a black day for Australia. I have always been a 'Holden Man'. It sounds corny, it sounds oh so boganish but the 7 Commodores I owned together with the 20 or so Holdens my company has purchased helped keep other Australians in good jobs.

    I don't blame the Labor or Liberal party, this decision was taken in Detroit by General Motors who have the right to do what they want with their operations.

    My main gripe is that we dropped our tariffs in the interests of free trade, whereas other countries…

    Read more
    1. Geoff Clark

      Senior Lecturer at University of Tasmania, School of Architecture and Design

      In reply to Gerard Dean

      Just two things if I may -

      1. Recent events are disturbing, yes, but they only became possible after Holden became a subsidiary of GM in the 1930's (I think). Perhaps that was the mistake...

      2. Raking over the coals, pointing the finger if you like, is valuable, to a degree, but the sooner the opportunities, solutions, alternatives - the future - are on the agenda, the sooner we are able to resolve. Let's focus on moving on!

      report
    2. Michael Shand

      Software Tester

      In reply to Gerard Dean

      I fear that the next big war would be a drone war

      So maybe we can't build enough fire arms to arm our troops

      But china can build drones faster than our children can die in combat, as can america.

      So unless we start a drone program ASAP - no amount of fire arms or tanks will help

      we are in the 21st century now, persueing 20th century technology is a fools eran

      report
    3. Louise O'Brien

      Marketer.Communicator. Observer

      In reply to Michael Shand

      You are right about unmanned aircraft being the future of warfare hopefully that is one of the reasons why the Aussie Government has elected not to buy the Lockheed Martin F35 Joint Striker Jet which is incidentally going down as the biggest disaster in aviation history. It is the wrong aircraft, built by a committee who did not really think through what was going to be needed but just pandered to what everyone said they wanted.

      report
  17. Mike Stasse

    Retired Energy Consultant

    The reality is, the global car industry is in its death throes.

    Limits to Growth, Peak Oil, Peak everything.............

    I predicted this would happen ten years ago. Within five years, no cars will be manufactured here, and within ten, probably world wide......

    The era of happy motoring is fast approaching its nadir.

    report
  18. Bart Brighenti

    Farmer

    Far out , Hard to believe all these experts could have advised holden to build smaller cars because holden couldnt add up... you fools.
    Big cars had higher profit margins, that was the only market left for building cars in OZ.
    Stop believing in fairies and wake and realise that all manufacturing is failing for the same reasons of fools half arsed free trade that Australia has that seems to think you can open up our markets to competition but not our labour force or conditions (drop…

    Read more
  19. John Lyons

    Professional Engineer

    Bart, you are 100% correct. This part was hidden in the back of the free trade orientated text books, so maybe a lot of people making these decisions now missed it.
    With free trade, "A nation with expensive labour will tend to import products embodying large amounts of labour. As imports rise and domestic output falls, the resulting decrease in demand for domestic labour will cause home wages to fall to the foreign level". (Carbaugh, J., 1982, International Economics, Wadsworth, USA).
    Unfortunately, with FTAs with Thailand, Malaysia, Korea and shortly China, the way ahead appears grim for manufacturing.
    I believe we should have concentrated on getting some product engineering work from GM; an area where our labour is not overly expensive.

    report
  20. Wild Master

    logged in via Facebook

    I believe that what the Japan’s monetary easing policy is doing to push the YEN downwards healthily is an appropriate action for the Australian government toconsider.In a layman term, just print more money to make the currency move downwards peacefully.

    Since the YEN is much cheaper now than before, the Japanese export and tourism businesses now become active again. This is exactly what we want to see here in Australia.

    The Australian government should also consider adopting similar monetary easing policy to drive the AUD downwards rightly. So, our Export competitiveness can be strengthened again and, our economy can be improved.

    This can help improving our Car Exports to other countries and save our car manufacturing industry.

    Japan has just announced yesterday another 60Billions economy Stimulus plan............Why cannot Australia?

    report
    1. Jonathan Maddox
      Jonathan Maddox is a Friend of The Conversation.

      Software Engineer

      In reply to Wild Master

      This is an appropriate response to a stagnant economy. It is not an appropriate response to one which is growing, but lopsidedly. We can't devalue the dollar without benefiting the already-booming extractive industries more than we benefit the productive industries. Our economy would become more lopsided, not less, and we'd see drastic inflation with no domestic benefit.

      Moreover, the more nations pile on this bandwagon, the more destructive it is. Floating currencies based on balance of payments make *far* more sense.

      https://en.wikipedia.org/wiki/Beggar_thy_neighbour

      report
  21. Chris Saunders

    retired

    On the local Murdoch news it was reported that the Premiers made representation at their COAG meeting to Abbott to take special consideration for SA and Vic in regards to GM, but Abbott said he saw no point in raking over the past. I think it is terrible. What is up with him?

    report
  22. Louise O'Brien

    Marketer.Communicator. Observer

    The world wants and needs very fuel efficient cars but unfortunately they do not sell well in the US.

    The world wants electric cars but unfortunately this goes against the petrodollar and therefore has received little real support from the US Government.

    No doubt the senior management of GM have always concentrated on making cars that Americans like to buy, large gas guzzlers. You only have to look at how the Americans always put measurement in inches on their products to realise that they are not interested in what consumers outside of the US really want to buy.

    GM Holden has a limited lifespan and I cannot see the US Government agreeing to give them another bailout, so our government might as well cut and run before GM Holden goes under again.

    report
  23. Louise O'Brien

    Marketer.Communicator. Observer

    Whenever a major asset such as Holden is sold we need to make sure it is being brought by a company that will run it profitably and not just run it into the ground and then keep asking for handouts until the business is closed.

    Has the Aussie Government given GM more money in subsidies than they actually paid for Holden?

    It seems that Coca Cola's ownership of SPC is going down the same track.

    I am sure we all remember Ansett Airlines which was brought by News Limited and TNT and then run into the ground and then sold to Air New Zealand. Air NZ only realised what the situation was after they had purchased the airline.

    report
    1. Peter Hindrup

      consultant

      In reply to Louise O'Brien

      Whatever the success of Holden, saddlers, upholsterers coach makers, diverging into sidecars, so bodybuilders, as places that built buses and ambulances later, were to become known as, who began car body manufacture in 1914, — certainly not a “Holden”! — until they began making car bodies for GM in 1924, they were not ‘building cars’. I would guess that they called themselves coach and body builders.

      With a new factory they begin supplies for GM cars, and in 1931 according to http://www.fundinguniverse.com/company-histories/holden-ltd-history

      Read more
    2. Peter Hindrup

      consultant

      In reply to John Lyons

      I checked on dates, lived through much of it in my first apprenticeship.

      Not very informative.

      report