It wasn't about wages, or any single factor.
No Govt subsidy, no Ford/Toyota/Holden ...
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It wasn't about wages, or any single factor.
wrongNo Govt subsidy, no Ford/Toyota/Holden ...
It wasn't about wages, or any single factor. Low volumes, high fixed costs, isolation from global markets and a stubbornly high Aussie dollar all played a role equal to or greater than labour costs.
These days, unless it's a niche product, unless a plant is making at least 100,000 units a year (ballpark figure) it's not cost-competitive. We'd never sell that many Falcons or Commodores here locally, and there wasn't enough demand for them globally. Toyota was the only one who got it right, but they can't survive here without the supplier base, and the supplier base can't survive with only one customer.
We picked our niche, it went out of style, and we couldn't adapt in time. It sucks, but it's hardly the fault of the guys on the factory floor.
Nah.. he wil just corner a free conversation and say ... Don't you understand me? ... We have the provincial intention to create aMaybe Morrison will go and shirtfront Xi!
Australia got to that level, and 100 000 is a lot for a plant.
At peak demand, Holden were throwing extra labour, ( ie workers feeding parts in sequence to the production line ) so that they were running less efficiently to meet peak demand. 780 vehicles a day was good output for any VAP.
80-100 is pretty comfortable i think, and trying to make the plants efficient at lower numbers has also been a focus over time.
There could have been demand globally, but in particular the USA ( where the Ford/GM headquarters were ) didn't push that.
Ford were planning to make the Ranger in Australia. The free trade agreement in Thailand did us no favors there.
Australia was the biggest market for the Thai made, Rangers, and previously the Focus. We are NOT a chicken feed market.
Some lessons from free trade agreements and unilateral duty eradications:
With low — or zero — import tariffs over the past decade, Australia became flooded with foreign cars that were either cheaper to buy than local models, better equipped, or both.
That had the effect of eating into the volume that Australian car factories needed to remain viable.
Fifteen years ago, the Holden Commodore led the market with close to 100,000 sales per year.
For five of the past six years, small cars such as the Mazda3 and Toyota Corolla have topped the charts with a little over 40,000 sales. Last year the Toyota HiLux ute led the total market with a similar number.
There is not a car factory in the world that can survive on such small volumes — other than the likes of Ferrari or Lamborghini who sell supercars with super-high prices.
The flood of imports has given Australian car buyers more choice than ever before — and more than every other country on the planet except China.
Australia has 64 automotive brands, the US has 38 and the UK has 42.
While we are literally spoiled for choice, the Australian car market became so fragmented, the car manufacturers couldn’t solely rely on domestic sales for survival.
But they couldn’t export their way out of trouble either. They were caught in a pincer movement.
Of all the Free Trade Agreements Australia has with other countries, none was more brutal and swift than the deal with Thailand, introduced in 2005.
Since Australia agreed to lift the import tariff on cars from Thailand, we have bought close to 2 million vehicles from our Asia-Pacific neighbour — from familiar brands such as Ford, Holden, Toyota, (the three companies closing their factory doors) as well as Honda, Nissan, Mitsubishi, Mazda and others.
In return, Australia has shipped to Thailand just 100 cars. Not 100,000. Just 100.
That’s because Thailand maintained hidden, non-tariff barriers while Australia opened its borders completely.
Ingeniously, Thailand continued to impose higher registration fees on cars with larger engines — such as those made by Ford and Holden.
Ten years after the free trade deal was signed, Australia is shutting its doors on an entire industry — and with it more than 50,000 jobs.
Australia was the only country in the world to manufacture cars and not have some form of protection for its local industry.
Now those jobs have been transferred to Thailand, known as the Detroit of the Asia-Pacific.
Thailand is now the second-biggest source of motor vehicles in Australia after Japan and ahead of South Korea.
Should we have kept the Australian car industry alive, or was it right to end taxpayer handouts and suffocate it to the point of extinction?
From Uni of SA:
A 2013 report by University of Adelaide Associate Professor John Spoehr estimated about one-third of sacked blue collar workers are likely to become long-term unemployed.
The statistics were gathered after the closure of the Mitsubishi car factory in Adelaide in 2008, and from other associated industries.
“We know from the research that a high proportion of manufacturing employees go on to be long term unemployed,” Professor Spoehr said. “It requires significant retraining to work in … other sectors.”
As Former Victorian Premier Jeff Kennett wrote recently, there is also a rise in “mature-age” unemployment, as manufacturing closes.
“These people are often breadwinners with good personal values who have been paying taxes and charges for years,” Mr Kennett wrote.
wrong
Simplistic perhaps, wrong NO
Ford plant closure is sad loss of manufacturing know-how
The closure of the car manufacturing plants in Australia is a sad loss of knowledge and jobs that will be difficult to replace, writes Geoffrey Brooks.www.abc.net.au
Critics of the decision to allow the car industry to leave would argue that governments should subsidise their local car manufacturing industries because of the benefits the industry brings in terms of employment and raising the general technological level of that country.
Holden were profitable.
Were they really, there is a reason Holden closed the doors, one off you could be right but Ford walked, so did Toyota.
Someone with one sheet of paper at 3 company HQs (not in Aus) said NO THANKS ....
Toyota stated that the only reason that they were leaving was that the loss of the other two left their suppliers below profitable volumes.
This is despite having a plant in Thailand making the same vehicle.
In short, Toyota had strong management.
( they also didn't have transparent profitability, they were punished for transfer prices a few times i think, after which they would show a profit, which then declined each year ).
$250m tax bill puts Toyota in the red
TOYOTA has been driven into the red for the financial year ending March 31 by a $250 million slug from the Australian Tax Office.www.smh.com.au
The other two had local vehicle development, which, due to its complex nature made it easier for them to transfer costs without being prosecuted.
The high dollar was the nail in the coffin. But the high dollar didn't really last that long. Bean counters in the USA used it anyway, we never really fit their genius global strategy ( the strategy that seems to be failing them ).
you're half right and half kinda wrong on this
one of the big strengths for Toyota was the Camry. Australia's export markets are limited because of where we are and RHD. Toyota did well because people outside australia like the camry, while noone gave two fu**s about the commodore or the falcon. yes there is the territory, but that gets effected by the below
the second issue is what Ford and GM have been up to globally over the past few decades. GM continued to not really know what to do with Vauxhall and Opel. Ford bought Volvo, Jaguar, and Land Rover, and the initial synergies never really occurred. Then the GFC came.
With both having to beg congress for billions, they needed to shed red ink. They did this in two ways, both which hurt australia. The first was to ditch non-performing or non-core foreign operations. Vauxhall, Opel, Volvo, Jag, and Land Rover all sold with many others. This hurt Holden because holden being RHD and in a shitty global market often got sidelined with Opel cars instead of Chevy's.
The other issue was range reduction. Especially in the USA, they were making too many different types of cars that sold in too small volumes. Range reduction was essential, and become a global mandate. Both the Commodore and the Falcon fell to that cut. No matter what wages staff were paid or subsidies delivered, these two cars were dead because they were no longer a part of the global brand strategy.
With these two stalwarts gone, and australians already in love with Thai utes and SUV's from all corners of the world, there was no strong argument for spending billions on redoing the lines for a new variant, esp as it would in reality be competing with existing Ford/GM plants making the same car already.
There were mismanagement and planning issues at both GMH and Ford, but reality is GM and Ford moving to a USA/China focus made us an expensive luxury they could no longer justify
The Toyota plant at Altona and the Holden plant at Elizabeth produced Left and Right hand Camry's and Commodore based vehicles since the mid noughties at least.
The Holden's were popular in the middle east until they were replaced by the Lumia ( corporate decision ).
Holden's were reasonably well received in the USA, but were hobbled by the Unions there forcing GM to impose a low volume.
They were then killed off, due to being unfortunately under the Pontiac sales banner. ( would pontiac have survived if the had been allowed to have a low cost rear wheel drive vehicle ).
Ford were going down the path of sharing the Falcon platform with the Mustang ( not the current model ) .
Talk about a shit fight.
Ford Australia wanted the Independent suspension system they ended up using, which is a pretty decent system.
Ford USA engineers wanted a different system that cost more and wouldn't allow 3 in the rear seat.
How the Ford Mustang killed the Aussie Falcon
Ford Mustang engineers signed the death warrant for the Falcon in Australiawww.whichcar.com.au
Ironically when the bean counters got to it, the Independent suspension was removed from the mustang. Using instead a live axle system like the older Falcons/Commodores had. ( independent suspension introduced for the current Mustang ).
Ford had been encouraged to use other engines within the Ford stable, but to get similar performance, it was going to cost them a lot more per vehicle. So they stuck with the inline 6.
The inline six was not really useful for export, since it didn't package into front wheel drives (packaging being the only real reason a V configuration is better than inline ).
The Australian GM and Ford vehicles were never more than an afterthought to their USA based parents.
agree with much of that, except the commodore in the usa - that was only novelty interest at best. local media did a great job of hyping up the cop contracts, but sedans were going the same way in the usa as they are here
pontiac was a funny one agreed, but the call was made when they were just shedding everything and anything
disagree we were an afterthought. had mates who worked at both, and my mate from GMH told me a story of a marketing meeting in detroit the aussies made when they were trying to salvage the elizabeth plant. They had a big presso on how important the holden brand is in australia, how important australian production is to that, and they had lots of nods. then one of the yanks asked them to response to some pics he had. it was a powerpoint of aussies on social media bragging about the pics of their rebadged commodores as chevys. his question was if holden is so valuable to sales in australia, why are the hardcore fans of the car rebranding them as chevy.
the aussies kept the plant open (it was the last time they did) but it was a big message that detroit really didnt see the value in the brand, and only say the factories as a part of the global supply chain (and an underperforming one at that)
The problem with 6 cylinder cars is the us Labor deals stopped importing cars from Australia in any great numbersAs protection dropped off ( tarriffs ) the Australian market became one with one of the biggest variety of vehicle choices.
The who market fractured under this model. Adding more and more choices, was not what the local industry needed.
At 20 000 vehicles, Commodore was still a top selling Australian vehicle.
At 20 000 vehicles total global sales, it was a problem, and GM ( surely one of the worst managed companies in the world for around 50 years ) had no interest in facilitating that.
Currently, due to global non profitability in cars, its seems that its gone back the other way, with fewer vehicle choices here.
Then thats a case of mis-management, because i'd be surprised if 1 in 10 000 commodores sold had been re-badged by their owner ( a badge that signifies the cheapest brand of GM in most markets lol ).
They easily sold 10 000 Australian made sedans a year in the USA , which was their cap level.
The earlier GTO ( monaro) was considered good to drive, and a "sleeper" car. Not really up to date styling ( it came in at the end of the model life, still with 1998 styling ) and not really similar to the older "out there " GTO's . The Monaro also sold ( expensive ) in the UK, featuring favourably on Top Gear.
Yes the American's share this ridiculous thing where we are meant to give a shit about the environment, but we drive a monster truck to the cafe.
But they still buy millions of sedans and hatches each year....just not so many GM or Ford sedans.
The biggest strength of the Camry was it's commonality with the overseas market; one platform, uniform drivetrain options, singular development fund meaning less development costs borne by the Australian arm of the business and which gave way to better margins. The competition ranged from Mitsubishi de-luxing JDM market Diamantes, Holden rebodying old Opel sedans before being bestowed with running RWD platform development for all of GM, and Ford AU basically creating the Falcon from scratch.you're half right and half kinda wrong on this
one of the big strengths for Toyota was the Camry. Australia's export markets are limited because of where we are and RHD. Toyota did well because people outside australia like the camry, while noone gave two fu**s about the commodore or the falcon. yes there is the territory, but that gets effected by the below
the second issue is what Ford and GM have been up to globally over the past few decades. GM continued to not really know what to do with Vauxhall and Opel. Ford bought Volvo, Jaguar, and Land Rover, and the initial synergies never really occurred. Then the GFC came.
With both having to beg congress for billions, they needed to shed red ink. They did this in two ways, both which hurt australia. The first was to ditch non-performing or non-core foreign operations. Vauxhall, Opel, Volvo, Jag, and Land Rover all sold with many others. This hurt Holden because holden being RHD and in a shitty global market often got sidelined with Opel cars instead of Chevy's.
The other issue was range reduction. Especially in the USA, they were making too many different types of cars that sold in too small volumes. Range reduction was essential, and become a global mandate. Both the Commodore and the Falcon fell to that cut. No matter what wages staff were paid or subsidies delivered, these two cars were dead because they were no longer a part of the global brand strategy.
With these two stalwarts gone, and australians already in love with Thai utes and SUV's from all corners of the world, there was no strong argument for spending billions on redoing the lines for a new variant, esp as it would in reality be competing with existing Ford/GM plants making the same car already.
There were mismanagement and planning issues at both GMH and Ford, but reality is GM and Ford moving to a USA/China focus made us an expensive luxury they could no longer justify
The biggest strength of the Camry was it's commonality with the overseas market; one platform, uniform drivetrain options, singular development fund meaning less development costs borne by the Australian arm of the business and which gave way to better margins. The competition ranged from Mitsubishi de-luxing JDM market Diamantes, Holden rebodying old Opel sedans before being bestowed with running RWD platform development for all of GM, and Ford AU basically creating the Falcon from scratch.
But anyway, we can nitpick all the minor factors which drove these brands abandoned their manufacturing businesses in Australia for eternity. The most obvious reason as to why they left, much less why they ran their business the way they did in Australia, is that they were all foreign owned entities whose primary motivation was delivering profits to Detroit, Nagoya and Tokyo. It became apparent thirty years ago that it was cheaper to make cars in Thailand and China, so that's what they restructured their business towards and that's what they always intended to do.
Ford tried to kill off the Falcon for an import in the mid-90's, don't forget that.
The unions (UAW) are so weak. they have had it handed to them since NAFTA. their members are as worried as your workers were. maybe they will get their balls back under this new trade deal.apparently their Unions didn't mind Mexican cars, was just Australian cars they didn't like ).