Rudd announces $6bn bailout plan
November 10, 2008 by George Skentzos
Prime Minister Kevin Rudd has today announced a bailout plan for the Australian automotive manufacturing industry worth $6.2 billion, based on results from a federal inquiry led by former Victorian premier Steve Bracks.
This follows confirmation that the Government would reduce car tariffs to 5 percent in 2010 under a new 10-year plan for the industry, with many critics labelling the bailout as compensation merely aimed at delaying the inevitable.
The plan incorporates incentive for local industry to develop more fuel efficient vehicles, with $1.3 billion going towards the development of energy efficient cars.
This is a figure just shy of Holden’s highly marketed “billion-dollar baby” development costs for the VE Commodore – effectively acting as a Government-funded mulligan for poor local industry foresight.
Mr Rudd shunned warnings from the Coalition that the Government should postpone its decision until President-elect Barack Obama reveals his own plans for the dwindling US car giants.
Clive Matthew-Wilson, editor of the car buyers’ Dog & Lemon Guide, says that unless Australia is prepared to block all imported cars, our industry is doomed.
“While I sympathise with the workers and businesses who rely on the car assembly to survive, the government’s package is simply corporate welfare that will not save the industry.”
As much as we all like to believe that Holden and Ford are Australian, the fact remains their future rests with their American parents who have not made a full-year profit since 2004 and 2005 respectively.
“The U.S. government will rescue Ford & General Motors because it has no choice. However, as part of their rescue package the U.S. government will almost certainly force Ford & General Motors to dispose of their unprofitable overseas assembly plants. The Australian Ford & General Motors plants will be near the top of the list for closure.”
The looming threat of substantial job loss closer to home has allegedly forced Mr Rudd’s hand in the matter; however Matthew-Wilson tepidly suggests the bailout fund would be put to much better use if applied directly to the affected workers.
“If the Australian government simply shared the $6billion among the affected car workers, these workers could pay off their mortgages or perhaps start small businesses. At least that way the money wouldn’t be wasted. As things stand, the government’s $6billion will do nothing but fill the coffers of a few multinational corporations, while doing nothing to solve the underlying problems.”
While we are certainly a patriotic bunch, perhaps it is time to accept the fact that a Government-funded and American-owned automotive industry is never going to be a positive influence on our economy.
Print it: 
I have just been given a Falcom XT company car…what a piece of crap! And thirsty! OMG!!
I don’t know if I am missing something here but it does not return 10.5L/100km (more like 18L/100km)no matter how efficient I drive it, it just guzzles. After driving my mazda6 MZR-CD for the last year I got such a shock to see a car that moves the needle significantly after just 100km. And don’t get me started with the gearbox! my god!
As for the comment of “not seeing the fuel price rise coming”…sorry but its been very well documented for at least 20yrs…just nobody wanted to listen…for fear of being called a hippy or greeny etc. Why did the EU get it right?
Its sad that Oz car manufacturers have let so many people down and now need yet another hand out to keep pumping out crap like the commodore and falcon.
JEYKL & HYDE
Ha ha ha I am so sorry about bad behaviour, if you feel bad :)
But you said “YOU ARE 6″4′ TALL WITH 3 TEENAGE KIDS 6″ TALL”.
It should be great view…
And I thought Falcon and Commodore are not big enough for your family. Where does mum sit? Boot?
So 7seater would be only option… But maybe not.
Just postponing the inevitable – good money after bad. Making cars in Australia might have been a good idea 60 years ago, but today it’s like making TV sets in Fiji.
I Think you all should admit what car’s you drive and what you all do for a living, when posting what can be seen as utter nonsense, For the record I sell cars and a BF2 XT sedan (11.1/100 currently)
Toyota R&D ? two motors and 1 body style (front and rear bumbers don’t count on the V6)not inc TRD
Ford 4 body’s (Ute & Wagon both with 100 year old rear’s) sedan and territory. 2 motors for development (V8 L6) plus DLPG and Turbos.(ex FPV)
Holden Wagon ute and Sedan, with 2 motors (one built here) Xe HSV).
the point being with the “Bail out” with “Ford GM bashing, it seems to me, all you car nut’s think Ford should just build 1 car and so should Holden, with no real variation and then we all can be like Toyota, i’m sure some of their employee’s are bloging now.
What a world that would be…..
its actually the parent companies in the US that should close the doors for 12 months and let europe, SA, and australia carry on to see how the profits go.
its Ford Australia, Europe, SA etc that send profits 4 steps forward only to be taken 5 steps backward be the mothership in the US.
Government handouts are a fact of life.
its always the auto industry thats thrown under theicroscope for some reason.
can anyone tell me how much government money was thrown to various manufacturers by Peter Beatie to bring industry to certain areas in SEQ????
giving grants to buy cars will also be useless.
it will set the industry up for a bigger fall just like the initial installment of the homeowners grant that fuelled the building boom.
its just as pointless as holden offering fuel rebates capped at 99c as opposed to reducing fuel consumption.
as for the rest,
i totally agree with “Frontman”.
you beat me to a bit of it, enough said….
JEYKL & HYDE get real. No-one is saying that Commodore and Falcon size cars should not be available.
What I am saying is that cars that size should not be the MAINSTAY of Australian car manufacturing. That time has passed.
You would have to go back to the early 80’s for big cars still to be the major players for private buyers.
All that can be hoped is that the Senate will block KRudd’s (so-called)”plan”. The $6bn may then be spent on programs more beneficial to Australia than propping up the balance sheets of two old, arrogant and badly managed (Amercian)multi-national corporations and gift-givng to a (Japanese) multi-national corporation which has no right nor need to receive assistance from Australian taxpayers.
^samR. mainstay cars you say, mmmm, yes i agree.
I was only thinking that not so long ago this country made ford lasers, mitsubishi colts, nissan pulsars and even further back, hb toranas, vw beetles & minis, as well as falcon, kingswood, commodore, valiant.
Didn’t mum always tell us not to put your eggs into one basket??
when you consider the latest GM announcement, there is no way that the federal government should be entering into any discussions at this time with either of these companies.
technofreak, unless your company car is a 10yo ex-taxi your comment is toal bs. If you are going to make up lies to support your biases, then at least make them half believable.
Silky, keep spinning…..
Hilarious isn’t it? A month or two ago this and other sites were full of screaming rants about the mere fact that Ford admitted that they had not ruled out FWD for the next Falcon. Yet this week we are told they are to slow, beligerant and wrong for making cars that people don’t want (even though it has increased it’s market share in the worst October on record).
Also so few of you have actually looked at the “bailout plan” and the conditions attached. Like the Green car plan requires the Manufacturers to spend $3.00 to get $1.00 back (oh and for a cheap shot, this condition is NOT retrospective so it DOESN’T affect the two lots of $35mil that Toyota has recieved). This package is for ALL Automotive manufacturers (not Just GM & FORD) and the component industry as well. It also has a large slice going to the public in the form of doubling the LPG rebate. As to whether this situation is the realm of just the Americans, read the news today, China & India are joining the lines of car manufacturers to be putting their hands out to respective Governments for assistance.
In response I’d wager that their governments don’t repond by lowering tarrifs!
Hmmm Mr Rudd, i still recall you saying not less than 2 weeks ago that australia is far better off than any other country to cope and to ride out this global tough times,hmmm.. GOD I HATE YOUR ARROGANT GUTS RUDD…your such a smug little runt…
thats my say people….i never voted for him anyhow….
:)
Sure will Brett, you keeping up with the latest news. GM doing it tough huh mate :)
Results of telephone vote in today’s Herald Sun: 78% people said NO and 22% said YES to Mr Rudd’s bailout plan. We are not so stupid (like Labor), thanks God!
ZVER,
i found a poll that said 99% of people only care about themselves.
next to that poll i found another that said 22% of people in the workforce are connected to the automotive industry
where is the poll on whether Capral should have been given buckets of money to set up their new plant in QLD??
or the many other manufacturers for that matter??
another poll also shows that only 22% are able to comprehend how an economy works…….
ZVER,
So, all that proves is something like 80% of those surveyed actually either haven’t put the effort in to understand the package or are too stupid to.
No Brett, it just means they don’t want to hand out any MORE money to the OZ manufacturers. Are you to stupid to understand that perhaps :)
Marcoz Says:
November 12th, 2008 at 1:04 pm
Umm do you feel strongly about this ;-)
Poles Poles Poles, I am not young, am in the phone book but have never been poled for my opinion?? Maybe I just don’t fit the demographic of the questions they are asking?
Please those of you who are saying that this is bad and that MR 07 is doing the wrong thing, take the time to read what he is doing.
First and formost it is a very good bit of politicing that makes the smug so & so look good without him having to do anything. Secondly it is NOT a recue package, it is a package to get the companies to invest more into Australia.
One contributor to this discussion has suggested that other contributors (a) have not read; and (b) should read the Australian Federal Government’s “plan”. Earlier today I submitted a comment containing a link to the “plan” so that anyone interested in reading it may do so. However, my comment (containing the link) was not permitted to remain posted. Why? One might have thought that reference to the document which is at the nub of this discussion may be illuminating and edifying (although possibly embarrassing for some who have made inaccurate assertions about it).
How do you know they don’t understand the question?
All these people are apparently “stupid” but not you. the numbers seem to suggest otherwise :)
Brett you seem to be in denial, everyone who voted “no” in the pole are stupid, but you are not, GM and Ford really are not in trouble are they, Holden makes profits every year in Australia don’t they. The Australian car industry has not received billions and billions of dollars in government support over the last 40 years have they. This industry has not shed almost 50000 employee’s over the last 15 years has it, from an employment perspective this is not a declining industry is it?
You are living in your own little world,where the facts have no relevance at all. A simplistic one where job losses is just bad, even though its been happening anyway, we survived the shedding of those 50000 jobs in the last 15 years, we will survive this.
I admire Toyota’s business model and acumen, mostly the car’s are only average, strangely though, it’s what people seem to want.
Whats the weather like in your world today :)
Anthony it’s a safety thing I believe, the link could go anywhere, perhaps somewhere nasty and shocking(GM’s Balance sheet?)
Its may be that they review it first, before letting it up.
Silky, no the only one who is stupid is you. The survey respondants were uninformed (as they usually are).
As you have proven yourself to be stupid, resort to personal insults and unable to admit when you are caught out making pro-toyota spin comments, I won’t be responding to your cr@p anymore.
Say hello to Dingo & juice when you pick up the Toyota paycheque.
Really Brett, you have made no response’s of note anyway, so thats just fine with me. Is it sunny there today :)
Isn’t it funny how those who are shown to be wrong, totally dissmaiss those who show them up, then start the abuse, then the la la land comments. But somehow everybody else sees and recognizes the reallity.
It’s a “dog” of a trait isn’t it dingo?
To the moderators, please allow the link (or publish the link yourselves) in the interest of the motoring fraternity. Would be good for the site one thinks as that takes away any onesided Journalistic comments others are putting forward. Perhaps you could post a linked page and at the end of the page a questionaire to guage understanding and feelings of your readers.
Just a thought
Bret you do make me laugh :)
still drivelling juice silky?
Those who use different names usually do so because they continually embaress themselves and need to back themselves up.
Still laughing nobby, do relax its only a blog :)
Not as much as everyone on drive.con and we all do at you.
That would be drive.com.au actually, and yes I’m still laughing :)
BTW – “As you have proven yourself to be stupid, resort to personal insults and unable to admit when you are caught out making pro-toyota spin comments, I won’t be responding to your cr@p anymore.” – brett
SO, when exactly does this start :)
The publicly listed Australian energy company I work for has decided to outsource what is described as “back office”functions,even though many of us do speak to customers to sort out their problems.
The banking sector is to shed 1000’s of jobs.These too might be outsourced.
It would not be unreasonable to expect this could equate to a quite a few Holdens & Fords not being sold from already quiet showrooms.
On one hand the government is proposing handing out cash to prop up a local industry but on the other allowing large businesses to outsource employment overseas countries on the premise of cutting costs.
If the same dry,burnt earth economics are applied to the automotive industry where would it be? China,Mexico,India?
We moved away from a mixed economy more than a decade ago & wholeheartedly embraced Capitalism.Or did we?
bret
spot on mate this silky/juice guy is a looney-just ignore his tripe
Some good comments here supporting both viewpoints, apart from bret, it would seem that if you don’t concur with his view you are wrong, maybe he should provide some fact, at least then he will have an argument.
Mike
i totally disagree. its pretty clear silky is just ’spinning’ i dont see any evidence behind his opinion. as i see it he got called on his bluff about toyota not designing anything in oz and was unable to deliver a suitable answer. silky just sounds like hes paid touota pr.
Dear squished
Toyota keeps platforms to a minimum, this is how they make money, stay with me on this, you see thats what business is all about.
Secondly whilst dev costs reported by Toyota OZ are certainly not as high and Holden and Ford, they make profits in OZ and pay tax on same. Ford also has been generally profitable and as such paid Oz Taxes. Holden, profit..what?
With the uncertain future of GM, why give the company more funding..wait and see what transpires, Ford and Chysler will be putting their hands up as well in due course.
This a declining industry, numbers have halved in the last 15 years(almost) and will halve again in the next 15. Holden and Ford will certainly not be here in there current guise within 5 years.
Thirdly, Toyota as a group posts billions in profit, has billions in reserves, operates using a business plan. GM cannot pay next months wages without FURTHER federal assistance. Ford MoCo is not so bad, but…
Finally, Both Bret and yourself don’t have a clue, you wear development/design as a badge of honour, its not if you go broke, its weight hanging around your neck dragging you down. Im not ignoring the facts, you two fools are, its not Toyota going broke, its not Toyota that cant pay its wages next month, its not Toyota BEGGING for money, its not Toyota losing HUGE market share, its not Toyota with BILLIONS of dollars in debt..and on and on..
What do I think of Toyota, they make okay cars mostly, Appliance is a most appropriate word in some cases, nothing speccie, are definitely having quality issues the last 18 months or so, will cease manufacturing activities in OZ prolly within 10 years.
You see I admire the business model, what they have achieved, how they go about it, truly its a case study in good business 101. I drive german you twats, and would not consider buying a Toyota as its not for me, lexus yes, who knows next year…
Bye Bye to this thread :)
Silky,
thatrs one of your better posts that i have read.
toyota certtainly are more efficient in terms of their business strategy. that and that alone is what i will ever give toyota credit for.
Ford are slowly heading to a more efficient business model.
even though we are gutted to lose the I6, its probably a good global decision from a business stand point.
ford is also making use of the focus platform for more than the focus, and ford is now developing a global RWD platform. Also ford has built the territory off of the falcon platform to make up for lost sales to keep the falcon justified. All that coupled with platform/developmental stuff with mazda all makes for a very good case.
when you talk toyota and Tax dollars, do you talk of the tax dollars they actually pay, or the tax dollars they try to not pay here in OZ??
Remember they got investigated a while back???
employment numbers in the industry declining over the last 15 years is not due to the industry itself dying.
for the last 5 years alone we saw record sales years after what was previously a record the year before.
with the industry booming over the last 5 years only set it up for the bigger fall that it is now experiencing.
i suspect the areas that saw the biggest growth will be hardest hit.
Aurion sales have fallen something like 34% so toyota isnt immune.
what bret is saying holds merit though.
hypotheticlly if you took the whole of the aurions platform development costs and laid it on the aussie books,
toyota would be further into the red than the rest.
for the falcon and commodore to still stay alive in such a small market with no shared costs for decades is something i doubt any other manufacturer would be able to do
Andrew, the declining worforce is not due to the fact that the industry is dying, look at the effect of technology and other methodology’s can have on workforce. Of course over time the workforce will become less labour oriented.
As it is, and will continue to do so..
May I again point out that Toyota pays tax in this country on profits, not elsewhere where tax rates may be cheaper. As to the tax evasion issue, obv Holden has no issues in this regard :)
Does Bret have a point? I don’t see where, GM and Holden determine their own accounting/tax methodology, and rwd does not help in terms of costings and developement.
When you get right down to it, its the consolidated group profits that only matter, Toyota is profitable at both the regional and Parent level. Unfort neither Holden or GM can say that, no matter what accounting methodology they determine to use.
Perhaps if we subistitute VW for Toyota …lol.
Andrew, toyoya could expense Aurion r&d, then discontinue production altogether, would you like to hazard a guess as to the impact of its share value and reserves?
Silky,
I already said the declining employment numbers isnt a sign that the industy is dying.
I said that in response to you saying the industry is dying and usng employment numbers to support that idea.
may i also point out again that toyota has been investigated for its tax paying habits or should i say their avoidance to do so……….
shifting profits to a country where lower taxes are paid is exactlly what they have done in the past.
I dont know why you keep reiterating that GM isnt profitable at the moment……
ive seen the headlines……..
I know you arent a fan of GM and neither am I, but it doesnt give one the right to harp on about it