Play Nice Politics #3 - Covideo killed the radio star

[Carmo]

Morrison slams Holden exit after $2 billion handout

The Federal Government has lashed out at General Motors for “walking away” from the Australian market and killing off the iconic Holden brand after accepting billions of dollars to keep its operation afloat.

www.news.com.au

In 2013, it was revealed the car manufacturer had been gifted a staggering $2.17 billion in subsidies over just 12 years to help keep the thousands of jobs ticking over.

2.17 billion over 12 years is less than 200 million a year. So about 1/3 of the rorts money used for the election.

So 200 million to keep thousands of jobs. Or 600 million to get 80 people elected.

Anyways, rorts aside, I would have kept the subsidies and tariffs. It's well known now that the protectionism can only be bad is a fallacy. You protect industries you want but that have a hard time competing because the advantages to the country are worth it in maintaining a skills base etc that other industries that can compete can leverage off. You don't protect industries where you should be able to compete no prob. Some examples: Australia should never protect iron ore or coal mining. Australia shouldve protect car manu and some agriculture, whitegoods and electrical / electronics wouldn't have been stupid either.

 

[Mutineer]

A pittance compared to the fossil fuel industries.

Did Labor pull the subsidies to fossil fuel industries when they were in Government?

 

[Mutineer]

2.17 billion over 12 years is less than 200 million a year. So about 1/3 of the rorts money used for the election.

So 200 million to keep thousands of jobs. Or 600 million to get 80 people elected.

Anyways, rorts aside, I would have kept the subsidies and tariffs. It's well known now that the protectionism can only be bad is a fallacy. You protect industries you want but that have a hard time competing because the advantages to the country are worth it in maintaining a skills base etc that other industries that can compete can leverage off. You don't protect industries where you should be able to compete no prob. Some examples: Australia should never protect iron ore or coal mining. Australia shouldve protect car manu and some agriculture, whitegoods and electrical / electronics wouldn't have been stupid either.

So you're saying the left's go to guy on the Economy Saul Eslake is a fool and you know better...OK

 

[StonesThrow]

I don't agree that Australia should protect industries that it doesn't have a comparative advantage in. I know that's just trade theory 101 and doesn't always apply, but making cars isn't something Australia should be trying to do (and I was in the first wave that got let go by Holden).

The only argument that stands up against global supply chains is the environmental factor.

 

[Doc_]

SUV's are a blight on the roads.
Everyone thinks their saver, Bigger, stronger.
Wrong.
First off they weigh more than a sedan. Needs a bigger engine because of the weight. More fuel to power it = more fuel.
More weight = increased stopping distances. Increased risk of accident.
Higher cabin = higher centre of gravity. Decreased handling and higher risk of accident and much higher risk of roll over.
These thing are dangerous yet people claim they buy them for safety?
FMD!
Its a fashion statement. End of story.
If you need to make an emergency stop or manoeuvre in an SUV your well and truly ****ed compared to a sedan.
These things chew juice and are more of a danger on the road.
It is NOT a safer option!

 

[StonesThrow]

The SUV thing irks me as well. Every response is 'I like to sit up higher'.

 

[Southerntakeover]

It was the unions.
You cant keep manufacturing at a loss and sticking your hand out to the government. The unions thought you could.

Leaving aside that the company expressly disagreed with you, and the union work forces took pay cuts: which developing countries labour standards are you advocating we adopt?

 

[kirky]

The SUV thing irks me as well. Every response is 'I like to sit up higher'.

Agree. Most people that have them can’t drive them. They are bloody hopeless at it and given most SA drivers lack driving ability it just makes it worse.

 

[Doc_]

Leaving aside that the company expressly disagreed with you, and the union work forces took pay cuts: which developing countries labour standards are you advocating we adopt?

Wages going from outrageously obscene to grossly obscene is still going to send the company to the wall.

 

[Mr_Moogle]

I'm not really a car person either but around the Ballarat and districts anyhow there are bloody heaps of SUV's and 4 wheel drives none more noticeable than around drop off or knock off time in the school zone areas with mother's picking up or dropping off the kids.....I'd estimate they outnumber the other vehicles 2 to 1.

Even just in the suburbs I've noticed it. I spend most of my life in Somerton Park and I see more SUV's around here than I used to. Certainly not 2:1 ratio yet but I'm starting to get sick of not being able to see past people when I'm trying to turn out on to a main road.

 

[Vader]

Leaving aside that the company expressly disagreed with you, and the union work forces took pay cuts: which developing countries labour standards are you advocating we adopt?

Workers in Thai factories are typically paid around 300-400 baht per day. That's $15-20 per day. Which Australian worker is going to sign up for those wages?

** I'm agreeing with you, not arguing against you.

 

[Vader]

Wages going from outrageously obscene to grossly obscene is still going to send the company to the wall.

Wages were only a minor factor, given the degree to which most factories are automated these days, and we're not talking about "obscene" or "grossly obscene". The fact is that Australian workers are accustomed to being paid a wage which allows them to have a reasonable standard of living in this country. No Australian worker is going to accept working for $15-20 per day, which is what their Thai workers are paid.

The bigger issue was economy of scale. Manufacturing plants overseas build more cars in a day than the Australian plants were in a month. Our plants were built for supplying the Australian market, with export only a later afterthought. They weren't capable of building enough cars to remain economically competitive, and none of the manufacturers were going to spend the money here to build an international scale plant.

That's not to say that there weren't other issues at play - wages, decreasing sales due to disconnect with buyers, etc.

 

[Punchy Bassett]

Are all of these SUV’s 6 cylinders and v8’s?

Ours is a V6

 

[Punchy Bassett]

Just on the SUV thing we have one as our main family car for the simple fact we have three kids and there really wasn't any other option to fit them in. We did consider a Commodore wagon at the time but that would involve the three kids all in the one row which as most parents will tell you won't end well. Also the SUV we ended up buying was cheaper anyway!

Just saying not everyone who buys them is buying it as a fashion statement. If we cared about that my work runabout car wouldn't be a crappy old Pulsar!

 

[Mutineer]

SUV=Suburban Tractor

 

[Mick F]

Ours is a V6

3.5 litre

 

[StonesThrow]

Having worked on the floor for different manufacturing companies, I'd say the average unskilled Holden worker was on about $5 an hour too much relative to their skills and other companies. It's why a lot of the workers have struggled to find comparative wages since the closure. However, 'outrageously obscene' wages is actually an outrageously obscene overstatement. They didn't help, but weren't a major factor in the closure.

I've worked for another company with similar wages (too high) but also others that were barely above $20 per hour.

Unions have their pros and cons in my experience.

 

[spexau]

Just on the SUV thing we have one as our main family car for the simple fact we have three kids and there really wasn't any other option to fit them in. We did consider a Commodore wagon at the time but that would involve the three kids all in the one row which as most parents will tell you won't end well. Also the SUV we ended up buying was cheaper anyway!

Just saying not everyone who buys them is buying it as a fashion statement. If we cared about that my work runabout car wouldn't be a crappy old Pulsar!

Same boat here. Just about to give 2 brothers to our son in a few weeks. Need to be able to fit 2 capsules/reverse facing car seats in along side an existing booster seat and have room for shopping/dog, etc.

 

[Carmo]

So you're saying the left's go to guy on the Economy Saul Eslake is a fool and you know better...OK

Sorry I know stuff about economics.

 

[Mutineer]

Sorry I know stuff about economics.

Then obviously Saul Eslake knows SFA about Economics because he disagrees my ever so learned genius.

 

[Carmo]

I don't agree that Australia should protect industries that it doesn't have a comparative advantage in. I know that's just trade theory 101 and doesn't always apply, but making cars isn't something Australia should be trying to do (and I was in the first wave that got let go by Holden).

The only argument that stands up against global supply chains is the environmental factor.

Well I disagree with your disagreement. Economics is beginning to correct itself from being mega wrong even in areas such as trade.
Here's Cameron Murray commenting on the topic recently:


One of the best pieces of work on the whole topic is Erik Reinert's book, How Rich Countries Got Rich and Why Poor Countries Stay Poor.


Another good reference source is this book by an ex staff member of what is now know as the productivity commission. He can give you blow by blow descriptions from on the ground during some of the car tariff reduction era. Follow his growing disillusionment with the whole thing.

 

[Carmo]

Then obviously Saul Eslake knows SFA about Economics because he disagrees my ever so learned genius.

Most economists dont know much about economics, that's right. Its one of the most poorly performing fields of scientific endeavour, if you could even call it that. A few economists in the last 10-20 years are now starting to get it right, but they're in an absolute minority, so the vast majority, 99% of what gets pumped out of unis at the moment have no effing idea about how it works. Ol mate Saul is a product of that. Same with the Kouk. John Adams to a fairly large degree. Alan Kohler. The list goes on.

A key demonstration of scientific understanding is the ability to predict.

All these economists don't get all their predictions wrong for nothing.

 

[Mick F]

Most economists dont know much about economics, that's right. Its one of the most poorly performing fields of scientific endeavour, if you could even call it that. A few economists in the last 10-20 years are now starting to get it right, but they're in an absolute minority, so the vast majority, 99% of what gets pumped out of unis at the moment have no effing idea about how it works. Ol mate Saul is a product of that. Same with the Kouk. John Adams to a fairly large degree. Alan Kohler. The list goes on.

A key demonstration of scientific understanding is the ability to predict.

All these economists don't get all their predictions wrong for nothing.

My mistake I’ve stumbled into Economics 101, rather than Scomo on BF.

 

[kirky]

So another big company underpays it staff - now Coles after recently Woolworths and those upmarket restaurants in NSW and Vic.

It was good to see the Group Chairman and CEO of Woolworths taking a pay cut in response.

 

[brucetiki]

SUV=Suburban Tractor

I thought it was Toorak Tractor