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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.

 Rudd announces $6bn bailout plan; headstart for 2010 tariff reduction

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.




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