FCAI refutes media claims
9 Nov, 2007
10 Comments 
The Federal Chamber of Automotive Industries, has issued a press release refuting claims published today in The Australian newspaper.
The News Corp owned paper states that “the Australian motor industry has warned the Government that the viability of ‘two or even three’ of the nation’s car makers is in doubt”.
This has upset FCAI chief executive Andrew McKellar who said these and other claims made in the story about the industry’s representations to Government are wrong.
The story by senior reporter Sid Marris and veteran political correspondent Dennis Shanahan goes further to suggest that Toyota, Ford, Mitsubishi and Holden recently warned the Federal Government that future investment in the auto industry was in doubt.
“No such letter exists, nor has there been any industry discussion on industrial relations matters as suggested in The Australian’s story,” Mr McKellar said.
With talks of struggling manufacturers not letting up, Mr McKellar said manufacturers “agree that it is appropriate that a broad ranging review of automotive industry policy arrangements should be undertaken as a matter of priority”.
Both the Howard Government and the Opposition have committed to undertake such a review early next year.
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November 9th, 2007 at 3:02 pm
“automotive industry policy” is a codeword for “government handout”.
If australian manufacturers can’t compete with overseas imports then they should close up shop. Simple.
(Report)
November 9th, 2007 at 3:54 pm
Close up shop?
I guess when it comes to that then we will have to offer similar working conditions to some of those importing countries. /sarcasm
(Report)
November 9th, 2007 at 3:59 pm
Government hand out? I guess MatthewM you or your previous generations have never had one?
The overseas imports can be the likes of the Chery from China.Remember the crash video.Trabant with a sleek shiny exterior.Put together in working conditions many of us would find intolerable.Do you want these conditions here?
If a level playing field is being argued then I would love to know where in the world they exist.
This generation of hard nosed economic theorists who support abolishing protective barriers altogether usually preach from a position of privilidge.They would never admit to being educated at taxpayer expense.They have enjoyed infrastructures built up by previous generations of taxpayers.
‘Sharper than a serpents tooth is an ungrateful child’ (shakespeare)fits them very well.
If four manufacturers in 2007 can’t be viable in a market the size of Australia + exports I would be asking why not.
Better stop here,it is an issue I get passionate about.
PS But we can spend unlimited $$$ on overseas campaigns.
(Report)
November 9th, 2007 at 4:21 pm
GM reported a big loss worse than expected. If it continues, bad news for GMH. And Ford has also not been that great.
(Report)
November 9th, 2007 at 4:33 pm
I remember a well known University - I believe itwas Monash; as they like to do a lot of car related things; did a study which concluded that on average for every 1 person [directly] working in the Auto industry there are
5-6 workers outside.. this illustrates just how important the Australian Automotive Industry is to the Australian Economy.
It’s also a good reason why the Federal Govenrment should give up on the idea of free-trade or a level playing field.. and increase the tarrifs back up to about 15%
When tarrifs were 15% the majority of people were being paid 1/2 of what they are now. so back then imported cars were considered to be relatively expensive.
Whereas now they are being paid twice as much as they were back then for doing the same amount of work [if not less]
which means they have more disposable income .. which is whty people are upgrading to LCDs Home Theatres etc even though the old equipment is just as good.. They have too much money and nothing to spend it on.
Therefore; even if the tarrifs were put back to 16% they would still be able to afford the imported car that was too expensive 10 years ago.. and probably still afford an LCD TV etc
(Report)
November 9th, 2007 at 10:40 pm
Wheelnut, no. you have no understanding of the whole aim of economics. Tariffs are the absolute evil of trade. Tariffs will make us all pay more. Cars are cheaper now than they were before. A typical example is a ford falcon was valued at an average 32weeks of income in the mid 90’s now a falcon is worth 28 weeks of average income. Do some research on reasons to reduce tariffs and you will understand why tariffs are bad. A subsidy is a better method, which is why the government is giving handouts. It does not increase prices and it adds to Australia’s productive capacity. Tariffs do the opposite to a subsidy.
(Report)
November 10th, 2007 at 1:21 am
Cheap plastic ford and holden,bad quality
(Report)
November 10th, 2007 at 1:02 pm
Astro boy - Tarrifs aren’t applied to locally made cars [Falcon and Commodore] they’re imposed on imported cars to make the locally built cars more attractive to buyers.
One reason car companies are setting up plants in China is so their cars are deemed to be locally made and avoid the tarrif which I believe is close to 80%
Infact subsidies are the enemy of productivity look at the US farmers; receiveing $million$ in subsidies and rated as possibly the worst farmers in the world in terms of output
However; your statement that it now takes 4 weeks less to buy a [locally made] car at the same price.. proves my point that we are now being paid more for the same job as what we were 10 years ago so we can more easily afford a new car now compared to what we could before.
Therefore; if the governmant restored tarrifs to 10 or 15%; because we are being paid more [the average wage/salary has increased] to those who want an imported car the 15% wouldn’t make that much of a difference.. they would most likey still be able to afford their new Bimmer as well as their new Home Entertainment system etc
Afterall; one of the reasons people consider cars to be cheaper is because they are being paid more and have more money to spend - which is also one of the reasons for the previous 4 interest rate increases
(Report)
November 10th, 2007 at 1:32 pm
The two main reasons for both GM and Fords financial problems are:
The number of plants they have. GM has approximately 16 or so plants in the US most of whch are operating at below 80% capacity [Holden/Opel is close to full Capacity]; a number of which are producing the same type/model of car as one in another state.. Ford is in a similar situation.
The other is the US Auto Workers Union. Years ago inorder to resolve a strike which affected GM Ford and Chrysler the car companies agreed to a package where they would pay their employees medical expenses.. Which was fine when yanks loved big Trucks SUVs [a market which is shrinking] and fuel was plentiful. But now it’s costing the car companies dearly.
Because the American Auto Workers Union has become so strong.. They are refusing to accept the car companies proposal that they cease paying employees medical expenses
in an attempt to reduce costs yet retain jobs.
The only other alternative is for the car companies to close several plants and move production to other plants making the same car. which the union is also angry about
The union doesn’t seem to realise that it’s better to lose say a couple of 100 jobs than to lose 1000s of jobs
I wouldn’t be surprised if one day the Big 3 decide to pull out of the US all together and make Large RWDs in OZ more compact FWDs in Europe. as its got to the point that thanks to the unions its now more expensive to build cars in the US than in OZ or Europe.
(Report)
November 10th, 2007 at 10:15 pm
Don’t be so bloody daft. If the locally made product was as good as the imported product, then you would be buy it. No point rewarding local manufacturers if they are producing products that are not up to par with the competition.
(Report)