The End In Sight For Falcons And Commodores

[Hank Scorpio]

Serious question, sorry if it's stupid.

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

Why does the Government care so much about Holden and Ford Australia if they are better off with imported vehicles?

[ARTZ]

Holden and Ford create alot of jobs locally...of more to the point already employ alot of people locally...they go under that's alot of people that need new jobs or will be applying for welfare..

My guess is the boffins in accounts figure its cheaper for now to prop up the industry than deal with the fallout if they go under...

[Hank Scorpio]

I read that most people in the automotive industry (lets say 90/95%, don't quote me, in fact if you have the real figures I'd love to see them) work in Service and not manufacturing meaning that what jobs are lost in the scheme of things are only small and should be able to be divided up elsewhere.

[ARTZ]

Obviously times have been changing...many more used to be in manufacturing but realizing the the future of the industry has led the manufacturing elsewhere..The commodore especially is just a Frankenstein of other makers parts thrown into a shell that suits the average Aussie..Ford at least design alot of there own everything and as a worldwide company will probably never go under..While Holden will become a subsidiary of GM.

When it is more viable to can it than carry on, these long term employees in manufacturing (that are probably only still there due to union movements not actual supply and demand) will no doubt receive nice redundancy And it will all be over...

The demise of Ford Holden Australia is nothing new, they have been working up to it for years..It doesn't matter how many die hard fans they have here in aus they just can't crack the world market and so can't really compete...

But they are going out with a bang with alot of big hp hippy eating cars at least.

[Mayuri Krab]

You talking from a power/V8 point of view or a build quality/reliability/warranty one or something else?

Power/performance for your dollar.

Even without the expensive markup I can't see any bottom/mid range euro (like BMW 320, 323, 325 or Merc C200, C250) matching a SS or XR6T for it. need something like a BMW 335i which I think will be more expensive even without our marked up prices.

[ARTZ]

What's your point...at the end of the day they still make faster cars and make more money...its win win for them and all lose for the Aussie made car unfortunatley...

[lidz]

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

How is it stupid? As far as I'm aware the only difference is a 5% import tariff & that only applies for cars made in countries that don't have a free trade agreement with Australia. & every other country does the same thing with our tariff's being some of the lowest.

Then like every other country with an automotive manufacturing industry the government provides grants / incentives / whatever to go towards retaining the manufacturing / developing new models & tech.

I work in automotive design & although those departments are tiny compared to the manufacturing side of things your still talking about a hell of a lot of jobs. Then factor in all the other departments, plus manufacturing, plus all the component manufacturers, their material suppliers, etc it very quickly equals a huge number of jobs.

[Roy]

My usual email group (about 20 or so mates), this has been one of the main topics of discussion for the day (a good 200-300 emails)...

Labour rates are up so high now it's just not economical to manufacture in this country any more across many industries. Wonder where the Unions will be, having priced their own members out of jobs, probably nowhere.

Of course that is partly because of spiralling bills and costs of living, then add in other factors, so it is but one piece of a much bigger failing puzzle that the Gov't just aren't addressing or simply don't want too given it's tough decision (read: unpopular) time and has been for a while.

So overall not a surprising move at all really. Expect to see Toyota do the same thing and make an announcement in the next 12 months or so once they've evaluated their positions now the two major players are effectively throwing in the towel.

A sad day indeed as I hear from a source that's seen the new/updated models, will be announced shortly from Holden, are very amazing to look at over the VE.

Ash...read up on German car industry and cost of labour and unions. There is far more to the discussion then blaming labour rates and unions.

Fark open markets and I am all for tariffs to protect local industries and jobs.GM were wanting to use te Holden designed rwd platforms globally due to the low price top engineer the platform and quality of the output. But as always as other markets open up it is going to be hard to compete with factories in east Europe, South America, South Africa etc.

The reason why they will be shut down is because fat cats can turn a a better dollar doing something elsewhere and charge consumers the same...Notheing about being too expensive to make here...

[Roy]

Serious question, sorry if it's stupid.

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

Why does the Government care so much about Holden and Ford Australia if they are better off with imported vehicles?

Years ago I read an interestintg white paper on defence and a 5o year view of our region. It sighted a strong local car manufacturing industry as a requirement for the security of the country. Seemed strange but they claim in the event of conflict a strong automotive industry is seen as the backbone oif industry that will be able to quickly migrate to manfcature of defence equip and weapons. The technology, thetraining ans skills and the factories themselves. I thought it was a little old fashioned to read such a thing but I suppose in a time of conflict a country like Australia that is rather isolated and with strong minerals waleth...well it makes sense that governments may see the industry as a critical backbone to a developed society that is autonomous.

[Cowboy1600]

Serious question, sorry if it's stupid.

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

Why does the Government care so much about Holden and Ford Australia if they are better off with imported vehicles?

The Government doesn't tax imported vehicles "stupidly". They cop all the same taxes as a locally made car + 5% import tariff which is, by world standards, very, very low. China tariffs can be up to 40% depending on car make and type. I'm not 100% sure what the US tariff rate is, but I think it's somewhere around 25%. I could be wrong on this, however.

What you need to realise is that the car manufacturer employ hundreds of thousands of people in Australia both directly and indirectly. Every other country with a car industry provides massive funding to their industry meaning if we want auto manufacturing, we have to do the same or else our cars will become far more expensive in comparison and no one will by them.

If we were to withdraw support for car making, the economic ramifications would be far greater than the money saved invested elsewhere. To get out of car making we have to do it gradually, if at all.

If other governments were to reduce or remove their funding of their auto industries, their cars would become far, far more expensive and would not be able to compete with locally made cars on a value basis.

Giving money to auto manufacturers is a catch 22. Damned if you do, damned if you don't and at this stage the damning for doing is greater than the damning for don'ting.

[*LOACH*]

Serious question, sorry if it's stupid.

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

Why does the Government care so much about Holden and Ford Australia if they are better off with imported vehicles?

BuuBox already gave a fantastic argument for why the government's cash package is a good idea:

GMH received $235m in return for $1b of investment (ensuring production until 2022).

Here is an article about it:

http://www.reuters.c...E82L07D20120322

So basically the Australian government gives Holden $275 million on the provisor that GM injects $1 billion dollars from America into the Australian economy. Sounds to me like an awesome government decision - about a 3 to 1 return on your investment plus the original money stays in country.

Edited January 21, 2013 by *LOACH*

[mad082]

Serious question, sorry if it's stupid.

The Government taxes imported vehciles stupidly and therefore make lots of money out of them but instead of making money off of Holden and Ford Australia the Government GIVES them money.

Why does the Government care so much about Holden and Ford Australia if they are better off with imported vehicles?

yes, tax wise they are marginally better off with imported vehicles, however without ford and holden there wouldn't be the tarrif, so they wouldn't be much better off.

but at the same time, they are also better off tax wise with ford and holden being there, because instead of them only getting the GST and import tarrif and the small amount of income tax from the dealers, with ford and holden manufacturing cars here, they also get the income tax from all the employees, plus all the company income tax from holden and ford australia.

from an uneployment point of view, there would be a few hundred or thousand employees of the factories that would be directly affected, but also then the engineers, the companies that supply ancillery parts (i know that mitsubishi used to supply a lot of the power steering parts for the VX and AU era of cars), metal suppliers, etc. so the impact would be large, although not all of it immediate.

[Cowboy1600]

but at the same time, they are also better off tax wise with ford and holden being there, because instead of them only getting the GST and import tarrif and the small amount of income tax from the dealers, with ford and holden manufacturing cars here, they also get the income tax from all the employees, plus all the company income tax from holden and ford australia.

That's an important point and one that is often missed. When the government tips money into a company like Ford or Holden, the vast majority of that money will end up in the pockets of the lower middle class. A lot of income tax will be paid on it and it will invariably be used by those people to live meaning it goes back into the economy and a lot of it employs others who will pay tax and then spend and so on.

If you followed the money spent by government on bolstering car companies, you'll find that a vast majority of it ends up back in their hands anyway, so for say every dollar they give, they get $0.85 back, ie. pump in $500m and it they end up with say $425m back meaning it really only "cost" $75m to keep a few hundred thousand people employed for a few more years. That's actually a good investment. My figures are just rough guesses so it could be more and it could be less, but the point stands.

That's the same with the like of the BER and insulation scheme. No money was wasted cause most of it was spent employing the middle class which in turn was pumped back into the economy.

[Adriano]

Good point except for the insulation, apparently heaps of installers disappeared shortly after the scheme was closed without BAS/Tax returns.

[Cowboy1600]

Good point except for the insulation, apparently heaps of installers disappeared shortly after the scheme was closed without BAS/Tax returns.

There were some things I would have done differently in regards to the insulation scheme, but all in all it wasn't bad. At the end of the day all the money dolled out will be spent on beer, ciggies and rent and just churn through the economy again regardless of whether or not BAS were lodged or not.

[Ziller]

To put it simply, people these days have more choice and tend to break away from what was once traditional.

Down the track in diffrent times they could make some sort of a come back, after all they are an Aussie icon!

[GTR-N1]

To put it simply, people these days have more choice and tend to break away from what was once traditional.

Down the track in diffrent times they could make some sort of a come back, after all they are an Aussie icon!

I can see what you're sayin'

Historically accurate too.

'53 my Dad bought a Holden > thought it was a POS

'55 he bought a Vanguard > another POS

'59 he bought a Peugeot 403 and loved it + they kept winning rallies after the 402

'62 he weighed up between a Falcon, a Fiat or a Studebaker > Fiat 2300 which nearly won Bathurst and loved the power and the braking

'67 he bought a Falcon which was reliable but spartan

'72 was the first of a trail of Datsun/Nissans

None of our family have since had a Ford or Holden except my sister married a Ford fanatic and a son bought an EB XR6 > sold for profit > EL XR6 > stolen > profit > Maloo > profit > 1 tonner Holden project > VL Grp A > sold for profit, but loved Nissans along the way.

Back then, I just sat on the sidelines and smiled.

[Ricky_Bobby]

Man 55-60k a year for what used to be considered unskilled work is pretty good, if you look back through history when Japan started making cars and exporting them the yank market took a huge turn. Australia would have seen the same if it wasn't for the government puttin all the import duties and taxes on imported vehicles .

Yes they are supporting local manufacturing and a workforce , but is it really doing the economy much good ? . Why is it only now that commodore and falcon facing the chopping block ?

Why has Holden cruze only come to fruition in recent years ?

Holden and ford should have been succession planning for a more economical and viable long term option over a decade ago .

Instead Holden and ford got comfortable , rested on their laurels relying on the Australian public to keep buying their flagship vehicles at what I believe is an inflated price now which reflects in poor resale later .

Nismoid has a good point about the unions , they are just as much to do with the failings of manufacturing as the companies do .

They have fought hard to get these workers the kind of money I believe isn't justified . Production line workers on 55-60k ? What ! .

I officiated at a rally event in SA last year , sitting there next to me at flying finish was a Holden worker . He was driving a brand new company provided Calais , was on 60k a year plus OT and all he does is drive a flaming forklift ! FFS !

I asked him if he thought he was on a better wicket than he should be , given he is earning more than most of the local IT market , more than graduating doctors , more than low ranking police officers or entry level school teachers .

His answer was naturally no , he felt the money was justified .

The unions have held manufacturing over a barrel to get packages like this , what did they expect when Holden and Ford finally say the locally made models can't be sustained any more ?

[jiffo]

There's always going to be vast wage differences, usually comes back to who you know plus being in the right place at the right time.

I know of 18 years olds with no tertiary skills and they're on 120-150k, drive Maloo utes and have nothing in the bank.

When the boom finishes (which it will) how will they cope with a "normal" wage and conditions?

Apprenticeships for 30 year olds are rare and the apprentice wage is a fraction of what they've become used to.

People say our population can't sustain a local car industry.

Perhaps they should check countries like Sweden, not a problem for them and they also have a home grown aviation industry.

Deja vu???

Investigate Aus. back in the 50's, an aircraft industry, fledgling car industry, aluminium, steel, glass and lots more.

As for Holden/Ford, I think 2016 is extremely optimistic. The Aus designed vehicles they have on offer are from a previous age.

Where's their hydrogen cars?

Forget Hybrids in Aus, we need a good cruising range in a package that offers more room than a baby Smart.

Honda are already there with their FCX, might need some tweaking but they're still miles ahead of Mitsu etc who are trying to sell old technology.

[jiffo]

P.S.

My No.2 sons drives tugs, around 5000kw's of diesel power.

The operator's next order of tugs may well be hydrogen/fuel cell/electric powered.

The technology is already out and about.

Didn't realise just how backward we've become in Aus. did you?