Ford, Holden production at risk as parts supplier closes | CarAdvice

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Ford, Holden production at risk as parts supplier closes

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By Tim Beissmann
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Australia’s automotive manufacturers have been placed in limbo today after a major parts supplier closed its factories indefinitely.

Approximately 400 employees from aiAutomotive in Woodville, South Australia and Dair Industries in Dandenong and Gisborne in Victoria were turned away from work this morning as parent company Autodom Limited closed its doors, citing difficult economic conditions and a lack of support from the local manufacturing industry.

Autodom supplies hundreds of unique components to Australia’s three local automotive manufacturers – Ford, Holden and Toyota – and the sudden announcement has put the immediate production plans of two of those under a cloud.

Ford Australia, which sources more than 400 different components from Autodom for its Falcon and Territory vehicles, appears to be the hardest hit by the plant closures.

Ford Australia public affairs director Sinead Phipps said the Broadmeadows-based manufacturer could be forced to stop production as early as the middle of next week if Autodom did not resume supplying parts soon.

“We are currently assessing what effect it will have on our production,” Phipps said. “We are okay until the middle of next week but if it’s not resolved it could potentially affect our production then.”

She said it would require “significant work” to find new suppliers for all 400-plus components if Autodom did not reopen its doors.

Holden external communications director Craig Cheetham said the Elizabeth-based manufacturer, which sources roughly 100 parts from Autodom for its Commodore and Cruze vehicles, may also be forced to stop production next week if no resolution was reached.

“They build some fairly critical components for us and without those components we could see an idling of production from some point next week,” Cheetham said.

“We’re in a bit of a limbo period at the moment. We’re waiting to see how it all pans out but it’s a bit difficult to give any clear answers right now.

“We’re going to do what we can to minimise the disruption to both our employees and to our manufacturing capabilities.”

Toyota is more sheltered from the closures than Ford and Holden as it sources only two components from Autodom for its locally produced vehicles.

Toyota Australia external affairs manager Beck Angel said it was business as usual at the company’s Altona production plant for now.

“At this stage we’re not impacted by the closure of Autodom,” Angel said. “We’ve got sufficient supply from them so we’re not stopping production.”

She said Toyota had enough parts to support production for “more than a few weeks”, and would get a better idea of its stock levels after completing a stocktake over the coming days.

Autodom released a statement earlier today, with CEO Calvin Stead revealing the company was struggling to stay afloat in the declining local automotive industry and was working towards restructuring its operations.

“Our company is constrained by high fixed costs that cannot easily be aligned to the pace of the current volume reduction in the local car manufacturing sector,” Stead said.

“We need time and assistance to reorganise ourselves and structurally change the direction in which we are headed. We have made excellent progress in this regard.

“Unfortunately we have no choice but to make this very difficult decision whilst we work together with all stakeholders in the hope that a solution can be found.

“We trust that the car companies and stakeholders will see the benefits of the restructure plan put forward and how their support will allow the company to develop a more robust and sustainable business.”

Ford Australia’s Phipps said all three local car makers had offered support to Autodom to avoid a situation like the current one.

“We have provided them with significant assistance in recent times including things like increasing the prices we pay for what they provide to us, improving payment terms, as well as supporting them in their efforts to diversify their business,” she said.

“The action they’ve taken this morning is extremely unfortunate but it is their decision.”

Cheetham said Autodom’s claim that the local car industry had failed to give it adequate support was “extremely disappointing”.

“Throughout the whole process over the past few years that we’ve done business with [Autodom] we have been very open,” he said.

“We’ve kept a continual dialogue, and while I can’t put a number on [the level] to which we may have supported them, I can certainly say that in line with our industry colleagues we have worked with them to try to find a solution to their problem, because it was our mutual interest.

“For them to come out and plainly state the industry hasn’t given them enough support is somewhat unfair.”

Autodom will make a further announcement on Friday afternoon to clarify its future production plans.


 

  • Guest01

    Sounds to me like an inside job. 

  • James

    For God’s sake Australia. Just buy the bloody cars! 

    • Sydlocal

      So are you saying that people should compromise and buy a vehicle that doesn’t necessarily meet/suit their current needs just because it is made in Australia? Not everyone wants/needs a car that big in the case of the Falcon/Territory/Commodore/Camry Aurion. The Cruze, maybe it doesn’t suit their needs in one way or another either. Don’t get me wrong, I’m all for being patriotic and the current crop of Aussie made cars are really good and worth considering, however not everyone needs these types of cars. Could you imagine if everyone drove a Commodore/Falcon in the city etc and trying to park in shopping centres etc with sedans that actually have a larger footprint on the road than many SUVs?

      • James

        As irresponsible and stupid as it may sound, my answer to your question is yes. 

      • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

        Much of the local cars are a very good product. As you said some of the decline is for legitimate reasons like not suiting the needs of the buyer. Although there’s also the badge snobbery at work where people don’t buy a car simply because it’s local, ridiculous. This decline is starting a vicious cycle where the manufacturers know the vehicles the market wants, but their margins are too low at the moment to design the vehicles that will sell well and be profitable.

      • Luke

        Sadly your right about that, it may not soot their needs, and because there is so much competition out there, it’s only going to get worse

    • DanielD

      Simplistic James, but yes you are right we need to buy the cars, but we don’t. The reasons are many, the solutions lie with the executives of those car companies to address. They don’t and sales reflect that simple fact.

      • Robert Ryan

         Too many cars flooding the market. Very difficult to make profits in a business in Australia if we have TWICE the number of Models that the US  has with 300  Million plus people
          Basically we will be paying a high price for a reduced manufacturing presence, as the US has found out. Strangely “Free Trade” agreements have done nothing to bring down the price of imported vehicles. In many cases prices have been risen to ridiculous levels compared to what people overseas are paying for the same vehicle.

        • Huwtm

          High prices, set by the car companies because they think they can get it from us, and they do. have always been a bug bare here. Unlike the US which pays about a third less. People would obviously buy the cars made here if they suited their needs, they obviously don’t. Large medium is about as large as people want to go here, hence the Mazda 3 is no1, now with our big cars being as large as they’ve ever been, there is buyer resistance.

          But this business smacks of something else. Either the supply company trying to force a sale to one of the manufactures or both as a conglomerate. or those companies haven’t been giving the assistance they say they have. We’ll be told in the end probably. (This is not unlike what happened to daewoo at the hands of GM)

          • JamesB

            Umm, James (without the B), you can’t just ask people to buy locally made cars. People pay big money for them so it will have to be a good one. Once Ford and Holden get their act together, that’s the time I would even drop by a showroom. The only Commodore I’d ever drive is the one in the mall if I win it through the raffle.

          • Mr Irony

            James takes the Camry when he gets a hire car.

            Good choice.

          • Robert Ryan

             On the other hand while supposedly the Australian public is “downsizing” to smaller cars we are buying more and more Pickups and SUV’s. We are like the US in that respect.

    • Unidexter Hopping

      No, I don’t buy badly made dinosaurs.

  • Zaccy16

    Poor ford, always the worst hit in all of these problems! holden deserve it but ford don’t!

    • DanielD

      Australian employees working for one US multinational deserve it, but the Australian employees of another American multinational don’t. Ok got it.

      • Sumpguard

        How does one deserve ot more than the other Zaccy? What a load of tripe!

        • Captain Nemo®™

          Well said Sumpy
          We get it Zuppy16 doesn’t like Holden. but suggesting hard working Aussies deserve to lose their jobs is a bit stupid. I don’t want to see any of the 3 locals manufactures put people off.  But i,am guessing by the amount of post Zuppy makes per day on CA he is probably unemployed and lives in a grimy bogan suburb like Norlane. So not working is nothing new to him. 

          • Zaccy16

            I am full time employed captain and live in newtown, as you know is the posh area of Geelong, do you live in corio?

    • LeStori

       When I worked at a company supplying parts to the Australian Auto industry Ford always wanted cheaper. If you could supply a better quality part at the same price they never seemed to be interested. Holden on the other had were to opposite.

  • Rick

    Ahh the carbon tax strikes again

    • DanielD

      I fail to see anywhere in the article where that connection can be drawn. Australian cars sales being down as the market changes seems a far more logical conclusion. I for one did not consider the carbon tax in the slightest when purchasing a new car this year.

      The poor dealer network of Ford in my case did help my decision however.

    • Zaccy16

      yep another bullet from ju-liar to the car industry

    • Golfmother

      Yes and stupid penalty rates , back to 70′s unionism , screwed down to the floor contracts by the car makers, all adding to the woes of suppliers .

      • Dave W

        Oh sure, blame penalty rates. You want the whole nation to work like the fruit/farm industry where the Govt give incentive to backpackers an extra year of working holiday visa if they would work in rural area where they get paid way under the minimum wage for up to 12 hours a day without any penalty rate.

        Sure, that’ll improve the Australian way of life.

        • Sydlocal

           The Government does that because the average person on the dole etc is too lazy/scared to do a hard day’s work. If the Govt didn’t offer that support many farms wouldn’t survive as they wouldn’t get enough people to pick all their fruit etc. So you are correct, it isn’t just penalty rates!

          • Dave W

            What gets me is how can anyone blame penalty rates when the upper management and executives seem to be getting more and more money regardless of how badly their company is operating.

            Take for example, the Qantas strike last year. They wanted to sack so many workers to “streamline” their operation to cut cost. But at the same time, they were giving the CEO enough pay rise and bonus worth at least 30 workers’ annual salary. I don’t blame them for going on strike.

            We often make a comment about sweat shop operations in China or somewhere and yet we seem to be striving towards the same working condition. Go figure.

          • Sydlocal

             Don’t get me started on upper management and their pay packets!

          • Andrew M

            Ok, lets take the Qantas strike for example, and the Toyota strike.
            The union bosses push and push for an extra .5% of a pay rise untill the company bends.
            These companies have to balance their books somehow so why dont the workers just accept their 3.5% pay rises and shut up rather than put jobs in jeopardy

            Another example very recently is the government staff culling here in QLD. They pushed and pushed for a better pay deal. Campbell Neuman warned them up front that he needed to get the books inline and thet their continual action for more money may be at the expense of jobs.

            They didnt listen, so then he started pulling the trigger.
            The Unions started big campaigns against the government and then changed their tune offering pay freezes in turn for job security. Campbell then said too late, sorry

            Im sick of the poor old worker attitude

          • Noel

            Using Qantas as the example I think you would find the least of the company’s problems is what Alan Joyce earns.  Many of their pilots and crew are earning much more money than they are worth, particularly the cabin crew (not all of them though, there are some on the newer awards which are more realistic) and a lot more than similar role earn.

            Australian’s earn very good money for what we do. I look at my income and truly find it astounding.  We all think we don’t earn enough because of how expensive things are eg housing, of course the houses are so expensive because what we earn, it’s a viscous circle.

            We are pricing ourselves out of the world market, how we fix that I don’t, actually I don’t think anybody knows.  

          • Dave W

            LIke I said, the bonus and payrise that the Qantas CEO received would’ve been enough to cover the majority if not all of that 0.5% increase. It’s not like the CEO is not getting enough money. He was already earning what? $3million annually?

            I hate to say this but that’s really a good example of greedy capitalism. Because really, 0.5% increase is nothing. An extra $300-400 a year for people earning $60k-80k BEFORE the govt tax some of it away?

            Sony’s CEO Kaz Hirai took a 24% pay cut when it’s making a loss. Any Aussie CEO took a pay cut? Holden CEO? Ford CEO? Qantas CEO took a pay rise instead. lol

          • Andrew M

            Dave W,
            You speak of an annual increase of $400.
            Multiply that by the amount of staff and you will also see these sort of pay rises cost companies millions.
            $400 might sound harmless, but apply that to thousands of workers and you might understand the bigger picture here. Also with that extra $400 comes increased super, sick, holiday and work cover costs for the employer.

          • Dave W

            So you’re saying Qantas rather spend $2+ millions on a single person’s paycheck rather than spending say 6 millions on thousands of their low position employees?

            Corporations everywhere are the same these days. They’re increasingly top heavy and they expect to be supported by the increasingly smaller foundation. When that foundation can’t support them anymore, they beg the government to support them.

            If the government can’t support them, they close up shop, the employees are jobless with no income while the bosses still get their pay packet and can still afford to live without a job for the next decade anyway.

            The last company I worked for went into administration under PWC. I got my redundancy package but realistically, it was only enough to support me for a few months at best. The two bosses went overseas on “holiday” and when I saw them back here, one was still driving his Porsche 911 while the other one still has his Merc SL.

          • Andrew M

            Dave, you sound like a bitter old man.
            I have had companies owe me money, then go into liquidation leaving me thousands out of pocket.

            These employees need to justify their pay increases but instead they just always want more money for the heck of it.

            Most people start with an equal opportunity in this world, if it bothers you now that you arent a 2mill/yr earner then maybe you should have chosen a different path.

            Just accept that there are people in this world that earn un imaginable salaries and move on.

            They did a study a while ago, and if they took all the money and divided it equally, after so long the rich wuld be rich again, and the poor would be poor again.

            Why dont you go and create a job for yourself rather than being an employee since it bothers you

          • Dave W

            I’m not bitter about someone earning a lot more money than I am. I just think that it’s getting out of control.

            As per my example earlier, Sony’s CEO took 24% paycut because Sony is operating at a loss. Now THAT is fair.

            If the company is making a profit, you give the CEO a bonus and payrise. If the company is losing money, then the CEO takes a paycut.

            I don’t hear any of the Ford or Holden CEO here taking a paycut despite the fact that they need a bailout from the government.

          • Andrew M

            I dont exactlly hear the execs of Ford or Holden taking pay rises either.

            Are you just assuming they are gettng massive pay rise after pay rise or are you tuned into something Im not?

          • Dave W

            I didn’t say they were getting a payrise, but as you can see in the other article about Holden getting rid of 170 jobs, the usual practice is always taking a chunk out of the business from the bottom whereas the top management stays fat.

        • Golfmother

          Reality bites my friend get ready for more factory closures as companies move off shore , this govt has turned the clock back to the 70′s .

          The economy is fragile and will get worse , blame julia .

          • James

            In the 70s people at least bought Australian cars.

          • Sydlocal

             It also helped that there were a lot more Australian built cars/brands to choose from back then.

          • Ozibrat

            Yeah now we have better choices

          • Huwtm

            Sydlocal is right, back then just about everything was built here.  To name but  a few, every Toyota that was sold here with the exception of Celica, Mercedes, Ford full range from escorts through to F100, Holden the same, Chrysler the same. Just about anything you care to name was either built from scratch, or CKD. Throwing cars together here beat tariffs and taxes and import restriction. The imported cars were generally the exotics, or ultimate luxury cars.

          • MisterZed

            Honda were never made in Australia. The Civic was imported from 1973 and the Accord from 1977 and thank goodness for that – can you imagine an Australian-made Honda?? I shudder to think.

          • Huwtm

            I didn’t mention every manufacturer, but Honda were considered a bit of a niche/exotic car supplier at that stage. It wasn’t till the Civic and Accord that that changed (previous vehicles, Coupe 7 and 9, incredibly fast, bad handling outright dangerous cars and ZOT) By the mid 70s more imports were coming in but numbers were number restricted, lots of waiting lists.

          • Huwtm

            I didn’t mention every manufacturer, but Honda were considered a bit of a niche/exotic car supplier at that stage. It wasn’t till the Civic and Accord that that changed (previous vehicles, Coupe 7 and 9, incredibly fast, bad handling outright dangerous cars and ZOT) By the mid 70s more imports were coming in but numbers were number restricted, lots of waiting lists.

          • MisterZed

            Also, correct me if I’m wrong, but I’m pretty sure that Mazdas were never built in Australia. Always fully imported from Japan.

          • MisterZed

            Also, correct me if I’m wrong, but I’m pretty sure that Mazdas were never built in Australia. Always fully imported from Japan.

          • Huwtm

            Zed, just list a lot of what were minor import cars at the time and leave it at that. I was making a point about what was made here, to that I’ll add for your pleasure, Datsun, and BL line of cars. As you know probably mitsubishi Galants were being put together by Chrysler. 

          • Sumpguard

            You really are naive Golfmother and have absolutely no idea of what drives our economy. I am, and always will be a swinging voter and am proud of that fact .I openly admit to voting for Howard twice but when he lost his way I, like most Asutralians kicked him to the kerb. However anyone with half a brain knows damned well that a strong Aussie dollar is bad for exports and pretty much ALL local manufacturing due to imports being cheaper. No brainer (for most anyway).

              The tarriff reductions started long before Gillard (or labor for that matter) came to power. So did the allowing of Coles and Woolworths to get their hands on fuel and if you think it is coincidence that since they got hold of it that the petrol price has skyrocketed THINK AGAIN.  They have removed competition. Jacked up prices and contributed to the demise of large cars. So much for FREE trade! 

               Now ,back to the Aussie dollar for a moment. The high Aussie dollar is a direct result of our resources sector and when the Labor government proposed a MRRT on “SUPER PROFITS” to redistribute investment dollars across the economy Mr Tony “the bigot” Abbott said NO!!!!!  Infact he says no to everything and talks down everything and that is damaging to the economy because his stupid mates at News Ltd print the lot. 

               When the dollar collapses (and it will sooner rather than later as China slows demand) fuel prices will rise even further and the death of our local industry will be complete! You can blame unions and Gillard all you like. The reality is that Australia will NEVER compete on the world stage whilst our dollar sits near parity with the USD. Even worse is the fact that over production in slowing economies elsewhere has seen unwanted stock dumped here (free trade anyone?) at bargain basement prices that Holden and Ford simply cannot compete with.

               Finally if you think Gillard is responsible for Holden and Ford’s woeful service history, arrogant sales people  ,endless reliabilty issues and in ford’s case truly tragic marketing then you are a bigger moron than even I had realised.

          • Huwtm

            I agree with just about everything you said, except the dumping. Another good thing about the 70s I forgot to mention was that Australia set the value of the dollar. Like England does now with the pound.

          • Andrew M

            Sump Guard, I kind of agree with what you have said, but since when has any opposition ever sat back and agreed with the government on any critical policy change.
            Although I think Abbott personally is the wrong “face” at the front of the Liberals, it is pretty much his job to oppose things.

            Either way whether it be mining taxes being distrubuted or carbon taxes being distributed the net result is the same.

            Why dont they just pop another 2% on the GST and be done with it. It would also save them billions in setting up these new tax schemes instead of just adding to an existing one

          • Sydlocal

             I agree Andrew M. During the Howard years I distinctly remember Gillard herself constantly criticising his policies/decisions and she wasn’t even the leader. If an opposition didn’t call the government to account on policy/decisions then what is the point of having one? They all do it no matter who is in opposition. Gillard needs to just take a dose of cement and get on with trying to run the country rather than trying to turn every negative comment into something sexist/offensive/personal when most of the time it is just an opposition being just that and no different to any other opposition comment from the past no matter what party said it.

          • Golfmother

            What a simplistic view Slumguard .

            Successive liberal governments protected manufacturing with high tariffs fron 1945 to1972 , it was your beloved labor govt of whitlam that over night reduced tariffs by 25% , why , because our ancient factories had idled under protection , ford and holden laffed all the way home to USA with massive profits .

            The dollar floats with good reason , its is a reflection of our strong economy in the eyes of the rest of the world , remember we are still less than the euro in value .

            Lets see how much your next  Kia/Hundi is when the dollar is artificially lowered to say .60c to the US , no you wont want that .

            Also remember the chinese do not float their currency it is artificially low for big export drives , good for holden and ford to import parts for assembly here .

            It is a complex problem trade .

            I blame the govt for bringing back stupid penalty rates and i blame the makers who sat on their hand seeking govt payout every time it got hard when competition hit them around the ears with better product .

          • Wile E Coyote

            How do you explain that before the dollar was floated the $US was .85 to 1$A and Holden and Ford were selling heaps?Japanese cars here did not get much of a look in and were cheap with all the extras thrown in.
            Our US based product/owners of our locally manufactured vehicles simply have not stayed competitive and our govt regardless of who is in power are suckers for propping them up.Holden and Ford are happy to at least break-even with the govt handout.No way are they going to risk investing in the product for our small market.
            The govt should take the $300 m they give them and put it into a retraining fund for the workers and let the local product die its natural death.

          • Huwtm

            T^o WillieC but what would happen to V8 super car?

          • http://www.facebook.com/robert.ryan.12139 Robert Ryan

             The High Dollar is not only killing manufacturing. you can add Tourism, Mining(yes the so called saviour or new “sheeps back” of Australia), and Education Services. Overseas Investors happy to get returns on the relatively higher interest rates here. keep pumping money into Australia, making the Dollar artificially high. Eventually if this keeps up the whole economy will implode

          • Sumpguard

              Absolutely Robert. I live in Cairns and have seen the effects on our tourism market. For us up here an economic slowdown is a good thing. Personally I am looking forward to it . 

          • Sumpguard

              Absolutely Robert. I live in Cairns and have seen the effects on our tourism market. For us up here an economic slowdown is a good thing. Personally I am looking forward to it . 

          • Huwtm

            Actually it’s not just this Government. The liberals had a big hand in this pie as well. The issue is that our governments, are trying to turn us into a little America. Rampant Capitalism doesn’t work any better than rampant Communism did, it’s just taking longer to unravel. There needs to be balance, services should have stayed in government hands, they, through the bills we have paid to them, pay for things to get done. You sell the services you have to replace the income with something, so taxes go up. Those services, telephone water power roads housing etc, paid for themselves and  for people to get free medical etc. Who cares if the public service is big if in some form or other it is employing people and doing something. Government is a business which has sold all it’s products. Also super used to be controlled by the government, it was safe, and it gave the government money to do things. It can not survive now, without removing services and increasing taxes. To our detriment.

            You do realize that the 60s and 70s were the golden years for this country. 

          • Julia

            Thank you everyone for your comments. However, you’ve all missed the point. It’s all Tony Abbott’s fault.

  • Waggaclint

    I wonder what parts Autodom actually make?

    • Mad Max

      Metal pressings, tow bars, bumper supports.

  • Robin_Graves

    Blame all the governments over the last 10 years.  There should be greater incentive for people to buy Aussie made (not Daewoo flat packs like the crude)  Its too late now but the tariffs should protect Aussie manufacturing.  Before the usual whingers pipe up about handouts, the Aussie auto industry receives the lowest amount of assistance from the government than an other country in the world.  Our kids are going to be digging dirt out of the ground because that’s all that’s going to be left here in 20 years.

    • Dave W

      Business is opened to make profit and grow. What’s the point of keeping them open if they’re operating at a loss? It just doesn’t make financial sense.

      Like I said, Europe/Asia/USA all have huge home market that can sustain their business. We don’t. And we’re pretty much a one trick large vehicle pony when people seem to be sizing down.

      Sure there’s the Cruze but it’s more expensive than the favourite imports like Mazda 3, Hyundai i30 and Toyota Corolla. Can someone explain why a home made car is more expensive than imported ones? Shouldn’t it be cheaper to encourage people to buy home made?

      • Sydlocal

        As you said some of it is due to the parts being more expensive due to economy of scale etc. I would think another example would be the fact that there are still quite a number of imported components on the home made cars again in relatively small quantities. Ironically the Australian car manufacturer that pushes the “Australian made” claim the most actually builds the cars with the least amount of Australian made components!

      • Andrew M

        What home made car is dearer than an imported version?
        Also, Our wages are simply a lot higher than somewhere like Thailand where a lot of our Vehicles come from

        Sure it is a business case, but if our government wants to give our industry an un fair advantage, they need to be responsible.
        Also, dont think that for 1 minute that other industries around the world dont prop up their industry.
        I did come across figures a while back broken into a per population basis, and the subsidies we give is not even worth mentioning

        • Dave W

          The homemade Cruze is more expensive than the imports in its class, like 3, i30 and Corolla.

          Sure wages are higher here than countries like Thailand, but if the price really can’t compete, the Cruze would have to be head and shoulder above the competition, but it’s not. So how can we realistically compete with imported cars? We can’t.

          I realise the govt in other countries would give support to their auto industry, but I doubt it’s in the form of pay packet and I doubt it’s to keep the business open. It’s probably more along the line of tax incentive and the purpose is to help the car manufacturers to grow instead of trying to keep it afloat.

          And those car manufacturers being supported by their govt? They really do belong to that country. VW, BMW and Benz are Germans; Honda, Toyota, Subaru, etc. are Japanese; GM and Ford are Americans. Heck, even Proton belongs to the Malaysians.

          Holden, Ford and Toyota Australia still have to answer to their respective masters in the USA and Japan.

          • Andrew M

            QUOTE……………….

            “I realise the govt in other countries would give support to their auto industry, but I doubt it’s in the form of pay packet and I doubt it’s to keep the business open. It’s probably more along the line of tax incentive and the purpose is to help the car manufacturers to grow instead of trying to keep it afloat.”

            WRONG…..
            You abviously dont follow the industry news outside of Australia.

            One of the biggest movements was Opel and the German Government.
            Opel couldnt afford to run, and noone would buy them without a guarantee from the German Gov of Vital and substantial funding.

            And since when was the Cruze more expensive than a Mazda 3?
            Mazda 3 Always gets slammed for being more expensive than the rest.
            Hyundais arent as cheap as they used to be either

          • Dave W

            The base model Mazda 3 Neo $20,330 (before on road). The base model Cruze CD 1.8 $21,490 (before on road)

            Hyundai i30 Active $20,990
            The new Toyota Corolla Ascent $19,990

            First of all, Opel was already the subsidiary of GM since even before the WWII.

            Secondly, you should Google “3 reasons why GM may have to give up on Opel”

            You might also want to google why GM’s nickname is the “Government Motors”. lol

            If the Australian govt wants to help, why don’t they subsidise the car instead? That way it becomes an incentive to buy home made as well. Home made car price would go down, sales volume would go up and the workers would actually have something to do, everyone happy.

          • Andrew M

            Although I believe the Mazda 3 is a better car, compare what you get for your buck. The Mazda isnt that well specced.

            Also I dont need to Google anything, my memory serves me well…..
            Did the owners and prospective owners of Opel not try and hold the German government to ransom about financial support?

            I also know of the nick name Government Motors. Whilst ironic and humerous its not realy the case anymore.

            Wouldnt a subsidy fr the actual vehicle have the same effect as just raising the import taxes??

            Im al for it either way, infact when the government was offering a 30% tax break for capital purchases I was a big believer it should only apply to Australian products, with a possible exemption if the desired product didnt have an industry in Australia

          • Dave W

             ”Wouldnt a subsidy fr the actual vehicle have the same effect as just raising the import taxes??”

            Not really. While both can be seen as an incentive to buy Aussie made cars, there is a distinctive difference.

            Raising the import taxes is the same as punishing those who never wanted to buy the Aussie made car for whatever reason.

            Don’t forget, Holden and Ford are as much an importer as they are Aussie manufacturers. They will get hit by the tax as well, so it’s like the govt give with one hand and take away with the other hand.

            Subsidising the car on the other hand, means the govt is rewarding those who actually want to buy the car. I think that’s what the Japanese govt was doing until recently.

          • Huwtm

            Actually what you are talking about is the credit system already in place. If a manufacturer builds a car with X amount of local in put. He can then import Y number of cars. Been going for years. 

            In reference to another comment made, the manufacturer sets the price not the car yard.  Simply the Cruze and the rest are so dear because the respect builder – Holden in the case of Cruze, feel they can get the money. Like they did with the Spark when it first hit, WAY OVER PRICED.

            As you can see from Opel and Toyota to a lesser extent, cars don’t have to be priced so high. It simply comes down to a greedy margin. 

            Generally speaking, even with the lowering of some prices they are probably still 35% to high. If not more.

        • JooberJCW

          Interesting to come across these figures, 
          Just wondering if the subsidies in those countries doing more actually are handing out to real ‘homegrown’ manufacturers. Because the big three sends their money overseas, perhaps our government is not so keen to do more…

  • twincharger

    The local vechle makers cop it again in the neck again.Most the caradvise bloggers will use this forum the bucket the local manufactures.
    It all appears to be falling apart,governments of the last 20 years have caused this decline.It makes me laugh,small subsidies or mass unemployment.Easy decision really.

    • Sydlocal

       It is not just the Governments of the last 20 years. The market and things like fuel prices etc have changed a lot in that time as well. The manufacturers themselves also have to take some of the blame by not moving with the market enough during this change to make the most of it. Ford has tried with the Territory/Ecoboost/lpi etc over the years but they are just hopeless at marketing on top of their less the stellar customer service/support. If Ford marketed as effectively as Holden and tried to help customers rather than alienate them, they would quite probably be selling more cars than them.
      Also as mentioned above it doesn’t help that our market is saturated with so many brands/models for such a small population base.

  • Hung Low

    It is as simple as the government handing out millions to local car manufacturers with no protection clauses to support the smaller local component manufacturers. If the government have had no plan or regulation on how the money is spent when investing in a bail out or assistant package, then that is a gross misuse of tax funding. I am all for funding the local manufacturing arm, but looking deeper on how the money is spent, can save moments like this.

    • Golfmother

      AGREED  , but the car makers are not blameless as they screw suppliers down and down just like the big supermarkets .

      Small parts makers are in a nightmare situation of high wage costs , diminishing numbers as sales of the OZ made cars fall , and then julia dumps a carbon tax on them .

      • Zaccy16

        Correct, ju-liar has ruined manufacturing in this country with the carbon tax and more company’s will continue to fall under because of it!

  • Andrew M

    I still dont see how people can see an upside to this, or not even understand what is happening here.
    The Auto decline is just the start.
    The government is now talking up a new eco friendly satellite city here in QLD which has just kicked off.
    The catch is, they have allowed a Japanese developer to take control of it and pretty much dump crate homes on our shores.
    Sure new house and land for 250K might sound like they are doing something for affordability, but when they jobs of making bricks, roof tiles, delivering plaster board, suppliying paint etc dont exist anymore, then whose going to be able to afford even 250K?

    You would be surprised how far and wide people get affected by these sort of movements.

    The Asian countries have it right, they are so patriotic its not funny

    • JooberJCW

      Agree, also Asian nations are reknowned to be stronger in community that western ones, they eat, travel, socialise in substantial groups, and because of this they are less ‘narcissistic’ than we are as they value their relationships with people, we are so hooked up trying to live in the hollywood lifestyle, that we have become a society pretty much people want things now, want it easy, and want it cheaply, just to get a taste of the desired lifestyle. Credit card companies loves us because of this culture.

      And because of this, we can be easily exploited by things considered one or more – discounted, easy to access, readytogo, self-esteem boosting.

      • Dave W

        Nah, it’s not that. The way people are raised in Western countries are usually focused on their individualism while the Asians are raised to conform to the society. This is especially true in Japan.

        You can see it when you compare a Chinese restaurant to a Western restaurant. In Chinese restaurants you order several dishes and you share them whereas in Western restaurants you order individual portion for yourself.

        Also Asian societies tend to be homogeneous whereas ours are multicultural. That’s why they get along better with each other.

        • JooberJCW

          Individualism leads to narcassism and trying to overindulge yourself to your own needs, funnily enough, also here, people want to succeed individually but at the same time don’t want to see other people succeed. (tall poppy syndrome). 

          Only some asian countries are raised to conform, and generally these are the ones with a imperialistic/despotic background, others are generally are just brought up to be more happier sharing and acting out activities in groups, like what you mention about Chinese restaurants. But all in all as a whole in Asia (including India) its preferable to do in groups and support each other. Agree with your 3rd point too,  though my response is more limited to why our society is declining as per Andrew’s statement.

        • Huwtm

          I agree, but knowing a Vietnamese, and knowing of Japan, China, all the way down to Indonesia and of course across to India, they are living the old life style that our parents parents had. Big families living together supporting each other. Each one helping the other to move forward. Infact the same with Mediterraneans and those from the Middle East. All operate the same way.

          It’s like the big deal they make on TV current affair show’s about failure to launch. That mentality of pushing from the nest early and letting them fend for themselves is what is killing our society. Our way of life.

          As the examples above show we’re on opposite sides of the pole in respect to the way we live. The other point of this is, all those non western countries have a mono-culture. They maintain their at all costs. 

          Where as multiculturalism inherently destroys the culture of the country that practices it. By the definition the host is over run by those moving in on it, till there comes a point where it’s all gone. I’m not touting keeping people out, but following examples of Japan and others, and maintaining our life style and values.  

          • Dave W

            I personally don’t think multiculturalism destroys the culture of the country. Most people from different ethnic backgrounds pretty much follow the Aussie way of life here. Asians who were born here pretty much act like the average Aussie. They have barbies at the beach, they wear western clothes, they like their steaks and their beer, and I even see many of them in Euro cars and even Falcodores. Apart from their physical features, there’s absolutely nothing that distinguish them from the Caucasian Aussies.

            They do tend to have a lot of family gathering though. Family seem to be very important to Asian cultures as well as many Europeans such as the Italians, Greeks, Macedonians, etc.

            Only a certain ethnic group try to push for their way of life, which is very religion-centric, here. I’m sure I don’t need to say which, and I think it’s a bit unfair to judge the other cultures here based on them.

          • Huwtm

            I didn’t intend to group everyone together, just the problem of having a limited space. My comments were based in part from what a Vietnamese friend told me about how they live and do things. As for people in cars, I don’t quite get that. Although some races and their cars are very easy to define. I think we all know who we both were referring to in part.

  • Andrew M

    I know why Toyota arent worried, they have other factories in the world making the identical parts for less money.
    This will be a great excuse for them to source elsewhere after their government subsidies were given on the stipulation of keeping jobs in OZ.

    As if they dont know where or how many of an item they have, or how long it will last. They are secretly cheering about their gateway to cheaper parts manufacturing

  • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

    Australia is suffering from a textbook example of the Dutch disease. Combined with some of the lowest tariffs and assistance in the world, perfect recipe for killing off manufacturing industries. There will be a time in the future when we look back and think ‘where did it all go wrong?, the signs were there but we did nothing about it’. Sleep walking off a cliff.

    • Andrew M

      Exactlly, and half the people here arent smart enough to see it.

    • Mr Irony

      I propose optional tariffs.

      Those who are worried about job losses & want to support Australian industry can pay the higher tariffs.

      Those who are not worried can pay the lower tariffs.

      What will you do?

      • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

        In that case, I propose those who choose not to pay are the first to lose their jobs.
        An optional tariff isn’t a tariff, it’s a donation. I’m more than happy to pay a little extra to to keep jobs here. After all, if people don’t have jobs they can’t buy anything anyway.

        • Dave W

          Like I said in the other article, if Govt increase the tariffs, it’s just gonna make people hate them, and it’s not gonna help Holden or Ford either.

          People will simply keep their cars longer, 2nd hand cars market will start booming again, new cars market will slump, and people still won’t buy Falcodores.

          Don’t mix patriotism with business mate, never works.

          First of all, Ford and Holden CEO need to take a paycut for one. Don’t just take a chunk of the business at the bottom as per usual, take some from the top too.

          Secondly, they need to make different cars that people actually want to buy. It’s simple business practice.

          Last of all, I’m not supporting the Falcodores just so they can keep the V8 supercars race relevant.

          • Huwtm

            I fully support your comment Dave. Common sense really.

          • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

            I’m not mixing anything, it wasn’t a serious proposal. Just a silly response to a silly post. I think you’re wrong about the tariffs, cost plays a big part in people’s buying decisions. I agree that ideally there should be zero tariffs, but the reality is that all automotive producing nations (except Japan?) have tariffs that are higher than Australia. Also agree about the CEO wages.
            You’re oversimplifying the issue. Yes the biggest market has moved to small cars, the issue is that there’s also smaller margins on small cars, that’s why Holden has taken a bet each way with the Cruze/Commodore, trying to cover two markets from one production line. The other issue is that the VE cost over a billion dollars to develop and was justified on a 10 year time frame. They can’t chuck it out and start fresh every few years. Hopefully they’ll find a good, profitable compromise in the coming years. It’s not about supporting the V8SCs, it’s about the 50,000 odd livelihoods directly dependent on on the industry. I’m certainly not keen to be paying the tax bill to support tens of thousands of extra centrelink recipients. 

          • Dave W

            You’re right about cost playing a big part in buying decisions, but it’s not just about the car’s price tag. You also have to consider the running cost of those cars. V6 and V8 are more expensive to run in terms of insurance and fuel consumption.

            You made a good point on smaller margin but as you can see the difference between car price here and overseas, and the fact that car manufacturers like Toyota could still reduce the price of their cars here, I think it’s pretty safe to say that it’s still well within an acceptable level.

            Furthermore, it’s already obvious month after month and year after year that the sales number of those large sedans continues to plummet below negative margin, proven by the fact that Holden and Ford needed a cash injection from the govt as well as cutting their labour cost. So I don’t see why they would want to persist on it.

            50,000 jobs? Oh I doubt that. According to Wiki, Holden employed about 6300 people in 2009. I doubt it’s still that big now. Even using that number now for both Ford and Holden we have only 12,600 at the most, though realistically I think the number is less than 10,000.

            Yes that is a lot of people to support, but then I’d rather support them than those so-called “asylum seekers”… or have the govt spend 7 billions on army buying expensive stuff like the Benz G-wagon when they could’ve been buying the Territory.

          • Huwtm

            very good points Dave. Numbers would include parts suppliers, but that is very likely under 10,000 to 15,000 every one included. Most jobs are automated. Numbers may also include admin and sales staff(?), which won’t be affected either way.  

            I threw in a comment way above about V8 SC but was only being sarcastic.

          • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

            Dave W, in the Bracks review of the automotive industry in 2008 there were over 64,000 people directly employed in the automotive industry. I stated 50k assuming 14k job losses since then. This is precisely my point; most people massively underestimate the amount of people employed in the industry, it’s Australia’s largest non resource export. The biggest employment comes from the suppliers, not the manufacturers. You’re probably right about the manufacturing, design and R+D centres for Holden, Ford and Toyota totaling around 9,000 employees. The report states that for everyone 1 job at those companies creates about 5 supply chain jobs. The issue is if the manufacturers fail, so does the entire supply chain. That’s why Australia’s subsidies, which are low by international standards, is money well spent. 

            These ongoing subsidies are standard practice around the world, not a ‘bailout fund’ as the media likes to portray it. Ultimately looking at the amount of money spent compared to the amount of (tax paying) jobs it supports, you’d be crazy to remove that assistance, especially if it’s cash flow positive to government.
            I think you’re right, ultimately a smaller vehicle is needed. I think keeping RWD but going down to about mid size would be on the money. 

  • MisterZed

    If that beige car in the top photo were to go out of production, I don’t think anyone would be losing any sleep over it (not counting those employed by Ford, and Melbourne taxi drivers).

  • john

    I have had various cars over the last 6 years from toyota, holden, ford, lexus, BMW etc. I must say that the VE V8 I had for a year was an excellent car and so was the Ford XR6 I had after it. I cannot fault the cars at all, even though people will and do rubbish the actual product. The problem for holden and ford in particular IMO is the rotten after sales service. Holdens is bad but Fords is at a whole new level and not a good one at that. They must strive to work on this area because former owners (like myself) are not returning too their product because of this reason and that is a shame because the cars deserve better!  

    • Joel

      Indeed. I know people want to make it political, but the fact remains that the local industry has to wear a fair chunk of the blame. Choosing model line-ups that are not representative of the market in Aus, importing cars that could have been so much better (think Epica when they could have had Insignia), and generally ignoring public demand/opinion.
       
      I work in the industry, and wring my hands daily at what has become of the Australian icons. The Japanese still make quality cars people enjoy and need, and the modern Korean cars are basically knocking on their door in terms of reliability, range and after sales care.
       
      Please, Holden and Ford, don’t just roll over.  

    • DanielD

      Yeap the Ford dealer network is beyond broken. Call in the lawyers, tear up the dealer franchises and start again. While we are at it, Ford need to learn that recalls save money in the long term too, as customers don’t appreciate either being dumped with the problems Ford tries to ignore or only looks at fixing after you experience them and get the car in to a dealer. It   leaves a bad taste in your mouth and it must be into the tens of thousands the number of lost customers because of this shoddy treatment. If a series fault is found, recall the cars and get it fixed before it becomes a problem for the customer. Also fix it on the line NOW, dont keep churning out the same compromised cars months or even in the Territory[s case years later.

      The cars in the current line up are good, but Ford Australia really need to lift their game. Customer loyalty costs money and a top class dealer network and no Ford there isn’t a short cut.

      • Huwtm

        One problem with American manufacturers and their way of doing things with cars is this, they often put cars on the market before they are ready, deliberately letting the first run of buyers do the final run of testing. For example the FWD Capri. This is something they have admitted to.

  • AAFordMan

    I made these comments 3 months ago in relation to Fords troubles.
    Now they probably apply to all the local industry.

    “Now is the time for Julia to do something. Not say something, but DO something.Food for thought.What about wiping all the taxes on a new car (both Aussie and imported), and replacing them with a single sliding tax based on the total Australian content of a car, ie an Australian made car might be made up of say 85% local product, therefore it gets taxed 15% of the set rate. But if a car is from overseas and perhaps has a lower percentage of Australian content (say 2.5% for example) then it gets taxed at 97.5% of the amount. No aussie content, 100% of the tax. Might even make some car companies want to source stuff from from Oz if it could reduce their price. The full tax rate could be based on the cars weight so the heavier the car, the more the initial 100% rate is to start. Bit like the carbon tax, how it is supposed to make the traditional electricity suppliers (polluters) artificially higher in price, so the punters can choose with their feet to go to a previously higher priced but now marginally cheaper, but more greener supplier. Go on Julia, you are doing it for one industry, why not do it for the local car industry? You tax their sales anyway, just do it differently and more smarter.Anybody else got some more “outside the square” suggestions?”

    Foreign cars (and we probably wont have any choice in the future) are going to cost a lot more when our dollar goes back down (and it will!)
    Do something Julia, or this wont be the only local industry to fall……….

    • Dave W

      You might wanna read about Proton and how the Malaysian govt got into trouble with the international community for doing exactly what you’re suggesting. That’s protectionism practice despite having the free trade agreement.

      If the Australian govt does that, us taxpayers would end up forking out the money to pay the fines later. F**k that.

      However you want to slice it, we simply can’t compete in manufacturing business with other countries like Thailand for two simple reasons. We have high wage rate and we’re far away from everything… except NZ and the Pacific islands, and Bali.

      I think Honda’s having the same trouble with their Civic being made in the UK, but at least UK has easy access to Europe.

  • Mick

    Half the problem with the local manufacturing industry is the amount of tax involved. If you add all the tax generated in the production of a car, including the manufacturing of the parts, tax on those companies, and the parts that go into making those parts and so on, it adds up to quite a staggering amount. Overseas they don’t have such high taxes on the manufacturing industry, because they know it simply cannot afford it. Couple this with paying workers less it means that Australia can’t be effective in competition.

    Australia can’t afford to lose the local manufacturing though because of the tax generated. If you reduced the tax load 30 percent and sold 30 percent more cars due to the decrease car costs, we’d still be ahead. Also it means more money staying in Australia, so there’s an extra bonus! Unfortunately it is the Australian way to ‘sell out’, ‘make a quick profit’, and to snub local products. People may not like to think this, but it’s true. Imported cars often have more problems and issues than locally produced cars, with the added issue that they cost more to repair when things do go wrong.

    What we really need is a change of government, to one that actually truly cares about Australia’s future and not just focussing on short term benefits of mining (of which much is owned by foreign companies anyway, and the majority of profits heading overseas).

    • Huwtm

      Actually the main problem is GREED. They set the prices to high. Think about it, a car built here even with higher labour cost is being built with CHEAPER raw materials. OS they have to import OUR raw materials to make a car in some instances, there’s an added cost they pay.

      What happens any where is they sit in board rooms and get an accountants report on what they think the public will pay as opposed to the actual cost of the car, whether imported or not. Taxes paid reflect the bottom line price set by the manufacturer.

      The next thing that has to be taken into account is the range, small medium large. Simply, small are meant to be  a starter car. First step on the pricing ladder, so the cheapest, then medium so a bit more expensive and so on. The truth is material cost wise there is very little difference in price between large and small. So the margin grows with the size of the car. They may start at 40% and go from there.

      In reality OUR large cars as impractical as they are, cost way less than an imported small car. But because it is at the top of the tree, it has to be priced accordingly. The rest of your 40 to 50 K after about 6,000, build cost, is margin, then a pittance for transport, a portion for the government and the dealer, the last two get paid by YOU at the end.. 

  • Turbodewd

    Id like to blame the state and local governments for buying non Australian.  A few days ago I saw an ACT government car which was a Hyundai i30, this should have been a Cruze.  Ive also seen a Kluger when it should have been a Territory.  I recently was in Newcastle and was annoyed to see an RTA car lot full of Hyundais, again, these should have been Cruzes or Camrys.

    The economies of Europe are crook, USA is so so…if China stumbles a little then we are in for a world of hurt.  Email your local member of state parliament or council and insist they buy local where possible.

    In addition, I saw a few days ago that the USA is going to be net exporter of coal soon so that will send prices for that south!

  • Jeda

    I like your idea. It makes sense. Which is why it will never be implemented.
    Our government simply has no idea what they’re doing and it is reflected in the way our country is run.

  • Dimka100

    These days people want only brand recognition, its the bling that sell cars. People in Australia are far happier to pay 60k – 100k on a cheap (yep these cars are sold at 25k – 40k in the USA ) and nasty BMW made in South Africa rather than a well made Australian sedan. It’s a shame really …

    • Guest

      Well made Australian sedan…

      Can’t help but chuckle.

    • Huwtm

      Brings up an interesting point, I was going to make seperately, how come South Africa is getting all this manufacturing and assembly and we aren’t? Our two countries could in many respects be twins. In the 60s Mercs, Toyotas, you name it was screwed together here. Now it’s South Africa?

      • Golfmother

        They have a big pool of workers on a low wage base . 

      • JooberJCW

        Because of the cost of labour, 

        You can’t compete against nations where people in blue collar roles earn blue collar money.

        In Australia, people want to earn white collar money for blue collar jobs simple as that. and society forces us to permit it too, because regardless in the suburbs theres really no slums or areas where you can get meals/accomodation for dirt cheap. People require a decent wage here to survive.

        • http://www.facebook.com/people/Karl-Sass/100000921334936 Karl Sass

          Yep and that egalitarian aspect is (was?) one of the best things about Australia. Unfortunately we’re heading down the American path with a classed based society. Free marketeers rejoice!

    • Golfmother

      Well made in australia , what are smoking , nothing special about the OZ bombs made here pal .

      • Bent6brigade

        Bungle still grinding that blunt axe I see

        • Golfmother

          Blunt axe grinder is abel seaman nemo in his VK .

    • JooberJCW

      Funnily enough the cheap BMW has a far more refined engine and interior to the well made Australian car.

      If the equivalent Australian car was sold in America, I can assure you it will be less than the BMW in price.

  • Tex

    Economies of scale. The volume of sales doesn’t allow Australian-specific models and all unique components.

    I’m sure Holden could source parts from overseas for the Cruze… but the Commodore/Falcon/Territory don’t share much with overseas models. Ford is onto the right path now with their One Ford strategy; that is that the Mondeo, Kuga, Fiesta and Focus are all the same in every market (with some region-specific minor changes)… Unfortunately the Falcon is not.

  • Schn

    I guess the end of the Australian Auto industry is inevitable.

    • Wile E Coyote

      Death by a thousand cuts

  • Fairlane

    Two words

    Currency War

  • Caccio

    well , i find all  of you are very affluent in all opinions in fact , i’m impressed
    with some of the inciteful topics . i’ll throw in my two cents
    CAPITALISM , always wanting to line our pockets first

  • Gibwater

    It makes you wonder why our car makers can’t make most of their parts inhouse…..and not be so bloody dependant on other people. Thats what they used to do. With the current setup,if one supplier goes under,the entire outfit crumbles……due to some bloke who supplies a certain type of nut or bolt…..its getting pathetic. And how about making cars Aussies want? Sales charts tell the story…….refer to them and do some bloody research……while you still can!

  • car lover

    and who was the idiot at each of these motor companies who said it was cheaper to outsource production of their components????????

    • Goodbye

      it is cheaper.

    • Andrew M

      It does work out better to out source things in some instances.

      The same factory supplies Ford, Holden and Toyota.
      If this wasnt the case all 3 of the car makers would have to have their owne sets of equipment to make these basic components.
      Individually a car maker may not be able to justify the expense, maintainence and wages of certain equipment just for making certain parts.
      Effectively F ,H and T all share the cost of the machinery by out sourcing

  • Deepthroat

    Justin Mellett the CFO of Autodom gets paid $185k a year, end of financial year in July he got paid a $17.5k bonus….WTF!!!!