Ford to close Aussie operations in 2016

[dhs.buckley]

Less support, lower tariffs, no industry

Date May 24, 2013
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Clay Lucas

Workplace Editor for The Age

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According to a group of auto manufacturers who went to Industry Minister Greg Combet last November asking for extra support, Australian-made cars had shrunk by late 2011 to just 14 per cent of the market.

A submission by the Federation of Automotive Product Manufacturers to the minister said that of the more than 1 million cars bought in Australia in 2011, about 86 per cent were imported.

The report warned that without further state and federal subsidies, car companies like Ford could close. This would have huge knock-on effects to parts suppliers.

''The industry is at serious risk of failing without further, considered intervention, stimulus and support,'' the report said.

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It blamed the high Australian dollar and the poor economies of the countries that had traditionally imported Australian cars for the local industry's crisis.

About 80 per cent of cars imported into Australia come from Japan, Thailand, Korea or Germany, the report said. But many of these countries retained huge tariffs on imported Australian cars.

This was despite Australia reducing its tariff on imported vehicles to between 0 and 5 per cent. Thailand, for example, charged an Australian company wanting to export to the country a tariff up to 80 per cent.

The report also compared what other countries with car industries invested per capita via government subsidies. ''The Australian automotive industry received significant support from the Australian government,'' the report said. But this assistance was ''dwarfed in comparison to assistance provided to many other automotive sectors in other countries''.

Sweden was the biggest subsidiser of its car industry, giving manufacturers $US330 per citizen, the United States $US260, France $US150 and Canada $US100. By comparison, Australia gave car makers $US18 per person.

The report also said that the benefits of cheaper imported cars were not necessarily flowing to consumers as car companies chose instead to invest the savings in marketing their brands.

Also, customers buying overseas cars were more likely to get a discount because dealers had more flexibility to give a discount.

The report called on the government to re-apply a 10 per cent cent tariff on all imported vehicles, adding $2600 to the cost. The report said it would likely reduce demand for imported cars by 5 per cent, with the purchases going instead to Australian manufacturers.

[soulman]

Just like the Dinosaurs....

If we do not adapt we die.

I am an exporter doing it no harder than any other Aussie, if i am not competitive , i cannot expect others to foot the bill!

We blame every politician for our woes, and yet expect the best quality at the cheapest price regardless of were it is manufactured.

I manufacture a product that is 95% Australian made and sourced, and export it world wide, i do net get subsidies nor any assistance from our government and despite fluctuating demands for my product and increasing costs of manufacturing locally i can only keep it viable in Australia for a limited time.

There will be a time that i too will need to source a less expensive manufacturing option,

other wise what are my options ...close shop ?

At least if i stay an Australian company and turn a profit , i will only go out and spend my profits in Australia !

If our cars are not competitive , why subsidize them ?

We need to adapt to our needs wether its producing food or something else !

My 2 cents.

Soul.

[spookypt]

I remember when I was involved in writing and detailing specifications on Qld and Federal Government projects back in the early 90's where we had to satisfy and quantify what percentage of the products submitted on tenders where Oz made/resourced. As a part of the selection process this was factored in as a % as to who should be awarded the job.

In the end, the tendering process gave weight to Oz made. By about 1995 this was removed from the selection process due to the establishment of FTA with China and the USA amongst others.

In the 90's I had the option of sourcing products from Australian manufacturers (nationally) to satisfy these tenders. At a guess back then I had about 20+ factories to choose from.......Now from that list there are 3 remaining.

The market is flooded with Chinese products and although untested for formaldehyde content, its selling here in Oz to Government departments faster than it can be supplied.

I have also been involved with the writing and submitting to State and Federal Government Standing offer arrangements. Currently there is one hich has now been running for 3 years and is still yet to be properly implemented. Many government departments simply don't know how to use it... So they buy there stuff from China.

It's faulty towers on steroids. The biggest laugh is how Govt (both sides) purports to supporting Australian Manufacturing... They don't and haven't for 20 years plus! I don't mean subsidise, I mean support.

As far as Ford goes.. well... it started with the thin walled XD door frames that cracked at the hinges, the outsourced electronic auto boxes that failed and the woeful service to correct warranty issues which I'm sure has all played a part.

I say.....and I'll get flamed here..... increase the GST to 15% and lower the income tax thresholds. You pay tax on what you consume BUT you also save tax on your earnings and are not penalised for working harder.

Cant be a bad idea. NZ has done just that and is booming along with a very nice balance sheet indeed. They don't have compulsory super nor as higher earnings in general but they have turned the country around in 4 years. And the welfare cheaters who found it tuff just flew over here and took advantage of what we offer anyway.

Just my opinion but twas worth the rant.

Spookypt

[Chris L]

Increasing tariffs to help protect the Aussie Car Business is the obvious solution, it seems to be working for those that are doing it as they still have an industry. You can only bend so much before you break and Ford have broken, others will follow.

Not all PLAYING FIELDS ARE LEVEL and that is why tariffs exist globally. Choosing not to acknowledge basic economics and fundamental fact will send you into the ****ter. That is exactly what this blinded bunch of ****wits in Canberra do best, we are so clever we can ignore what works and fix things that are not broken whilst doing the exact opposite of what should be done.

I have recently sold my share of a manufacturing company in Campbellfield and we did once do work for Ford and many other local manufacturing companies in that area. The story is the same all over, gone to China or gone fullstop. To see it first hand was quite a humbling experience, but you can adapt to a certain degree to find opportunity to remain competitive. Everyone has a limit and unfortunately more are finding it.

When will this country have a leader that actually has the balls to do something, not hide behind bull**** rhetoric, say what they actually think and squash these bloody minority groups. Do what they know to be right and just, despite what the spin doctor states. You either are with the tide or against it, greater good for the greater number. A simple philosophy that Canberra just don't get.

Don't get me started on our Farms/Land and Stations going overseas !!!

Jeeezz, I knew I would get cranked up........apologies. My 2 cents....

Cheers
Chris L

[Rebel1]

Originally Posted by soulman

J
We need to adapt to our needs wether its producing food or something else !
My 2 cents. Soul.

I'm with you soulman.
We are sending our primary producers broke because we import fruit and vegies from overseas whilst our own farmers leave produce on the ground.
Fresh orange is no longer fresh ...It's made from imported dehydrated powder imported from OS.
We import seafood from overseas which has been raised in questionable conditions.

Our Government reports dodgy unemployment and under employment figures.
These real figures from Roy Morgan research :
However what should concern the Government is that a large 2.305 million Australians (18.2% of the workforce) were unemployed or under-employed in March and while this is down 1.6% (168,000 less than last month) it is up a large 226,000 (1.0%) over the past 12 months since March 2012.

The Fed Government has to realize that it is employed workers who pay taxes, consume products, including cars, and generally add to Government coffers.

We need more people "producing" something. Only when people earn a fair wage can they "consume" and contribute to the economy.

I'm going to get flamed for this but the only course left for the Oz. Federal Government (whatever color) is to introduce a Job Guarantee:
See here for explanation:
What is a Job Guarantee? | Bill Mitchell – billy blog

I'll put my flame suit on now!