Cars & Transportation The death of Ford V Holden

[Papa Juggs]

Our proximity to Asia is as much a problem as it is an advantage.

Short term good, long term bad.

Cheap Toyotas and Mazdas aren't good for Australians they just don't understand it because they're all stupid bogans.

We're being Americanized to the point where mass stupidity maintains the status quo.

 

[shiva25]

That is not really true. The Europeans make plenty of cheap cars (e.g. Skoda) and there is no reason why we could not match the costs and scale of countries like Japan and Korea if we developed an effective export trade (rather than just being a manufacturing outpost).

Gideon Haigh's book on the Australian car industry is worth reading. It presents a very compelling argument in favour of motor vehicle manufacturing in Australia. Unfortunately, decades of poor government policy combined with opportunism by foreign companies have run the industry into the ground. By the looks of things, irretrievably.

Dont know how you can blame the government for Holdens mess. They have been running at a loss for more than a decade due to poor management and building a product that is too expensive and that no one wants anymore. Why should the the government keep propping up a sinking ship that have become comfortable over the last 10 years due to goverment handouts that i as a taxpayer have been paying for

 

[Caesar]

Our proximity to Asia is as much a problem as it is an advantage.

Short term good, long term bad.

Cheap Toyotas and Mazdas aren't good for Australians they just don't understand it because they're all stupid bogans.

We're being Americanized to the point where mass stupidity maintains the status quo.

There is nothing wrong with our proximity to Asia. If we had developed proper export markets there 30-40 years ago, our location would be a massive advantage to our car industry. It is also ignorant and simplistic to say that Australians not buying Fords and Holdens is the reason for the industry dying. If you are manufacturing cars solely for the small Australian domestic market, you've lost before you start.

It's sad that people think that, for whatever reason, manufacturing in Australia doesn't 'work' and we should just wave the white flag to countries with cheaper wage rates. Western Europe shows that this is a myth. High-tech, highly-skilled, capital-intensive manufacturing like motor vehicles is exactly the sort of industry that affluent countries need to foster if they want a value-adding economy.

 

[Caesar]

Dont know how you can blame the government for Holdens mess. They have been running at a loss for more than a decade due to poor management and building a product that is too expensive and that no one wants anymore. Why should the the government keep propping up a sinking ship that have become comfortable over the last 10 years due to goverment handouts that i as a taxpayer have been paying for

Industry policy extends further than a choice between propping them up or not propping them up, you know.

In the 1970s, Australia was one of the top 10 motor vehicle manufacturers in the world. Policies of deregulation and unilateral tariff reduction, the miserable failure of the Button car plan, and a bunch of other economic decisions crippled the car industry in the already-limited domestic market. It forced local manufacturers into rationalisation or insolvency, and put paid to any prospect of developing a competitive export trade.

If we'd taken a different path 40 years ago we could currently have high levels of design and manufacturing in Australia, and be exporting cars to Asia in a similar way to how Japan exports cars here today. Instead we regressed to local manufacturing for local consumers, now inevitably being squeezed out by cheaper imports. Both industry and government wear the blame for that.

 

[shiva25]

There is nothing wrong with our proximity to Asia. If we had developed proper export markets there 30-40 years ago, our location would be a massive advantage to our car industry. It is also ignorant and simplistic to say that Australians not buying Fords and Holdens is the reason for the industry dying. If you are manufacturing cars solely for the small Australian domestic market, you've lost before you start.

It's sad that people think that, for whatever reason, manufacturing in Australia doesn't 'work' and we should just wave the white flag to countries with cheaper wage rates. Western Europe shows that this is a myth. High-tech, highly-skilled, capital-intensive manufacturing like motor vehicles is exactly the sort of industry that affluent countries need to foster if they want a value-adding economy.

Unless youve been living under a rock manufacturing doesnt work in Australia and has been in decline for several years and will get worse as time goes by. We simply can compete with better technologys and more cost effective ways of manufacturing that other countries provide. Comparing us to Western Europe is a farce as they have a bigger landscape of countries all close by that they all deal with as well as also having developed better technology to produce items at a far cheaper rate than what we can produce here in Australia. They also export many of their manufactured items all round the world as they are in demand. Australia cant export jack shit here cause we dont make anything that other countries would even want

 

[Caesar]

Comparing us to Western Europe is a farce as they have a bigger landscape of countries all close by that they all deal with as well as also having developed better technology to produce items at a far cheaper rate than what we can produce here in Australia. They also export many of their manufactured items all round the world as they are in demand. Australia cant export jack shit here cause we dont make anything that other countries would even want

We have a "huge landscape of countries" close by that we can export to. It's called Asia. We have a massive advantage by being - by far - the most politically and economically stable country in the region, yet we don't take advantage of it in the slightest.

There is no reason why we can't have the sort of technology available in Europe, nor is there any reason why we cannot manufacture items of high quality that are in demand around the world. We have the resources, location, infrastructure, and attractiveness to foreign investment to do so. How do you think that Europe got into that position in the first place? It didn't spontaneously erupt from a bombed-out crater post-1945.

The reality is that the biggest obstacle to Australia being a manufacturing hub is our willingness to cut our own throats. Across practically every industry, we have some of the lowest levels of protectionism of any country in the world - generally a result of decades of aggressive unilateral tariff cutting that has gone far beyond what is necessary to foster local competition.

 

[Bunk Moreland]

Talking a lot of sense here Caesar.

Successive govts have constantly misread the play re his industry and where it was headed, resulting in an inability for us to develop successful exporting.

All the while slashing all tariffs on imports to ensure domestic demand dies in the arse too.

Result is the death of one of our proudest industries. It's a damn shame. We still in this country have the ability to design, develop and manufacture a car from start to finish - from the bloke sketching something up on paper to the one polishing it as it rolls out of the factory. Very few countries in the world have that complete capability. Aussies love their cars, and we are and always have been good at it. Just a shame this unique set of skills hasn't been out to better use due to poor planning.

 

[zimma]

Well at least we still have mining! Right?...

 

[Pacman82]

If we have money to fight wars in the middle east and build billion dollar met ticking systems then we have money to invest in automotive manufacturing and local jobs. Manufacturing is one of the backbones of all great economies, look at Germany.

 

[zimma]

If we have money to fight wars in the middle east and build billion dollar met ticking systems then we have money to invest in automotive manufacturing and local jobs. Manufacturing is one of the backbones of all great economies, look at Germany.

So we have to do what Germany has done... Sounds like a good plan, might need to improve our train system first...

 

[Scotland]

That is not really true. The Europeans make plenty of cheap cars (e.g. Skoda) and there is no reason why we could not match the costs and scale of countries like Japan and Korea if we developed an effective export trade (rather than just being a manufacturing outpost).

Czech Republic ≠ Europe, nor are their costs remotely comparable to Australia.

Their biggest selling model is produced in Czech Republic, India, Ukraine and Kazakhstan. Not exactly Scandinavia or Switzerland.

Gideon Haigh's book on the Australian car industry is worth reading. It presents a very compelling argument in favour of motor vehicle manufacturing in Australia. Unfortunately, decades of poor government policy combined with opportunism by foreign companies have run the industry into the ground. By the looks of things, irretrievably.

I haven't read it, but if I come across it I will. As long as I can remember the industry has had its hand out to the government just to stay up and running. I mean up until 2004 Holden was still just producing large RWD sedans with pushrod V6 motors, and it wasn't until 2011 that a locally built 4 cylinder car was produced. Not being at the absolute forefront of technology is one thing, but FFS.

 

[The Speaker]

Car manufacturing in Australia is not irretrievable as a concept. It's just that in it's current form it is totally unsustainable.

In order to be born again it's going to take some massive changes in thinking.

 

[Tulip]

So we'll have the same cars but in Vauxhall or Chevrolette packaging?

 

[zimma]

So we'll have the same cars but in Vauxhall or Chevrolette packaging?

Other way around I would think...

As in we will have Chev / Opel models, sold as Holdens. Like we do already, only the Commodore isn't a Chev or Opel from memory.

 

[Tulip]

Other way around I would think...

Nah I meant as in they'll produce the same model overseas, but we won't get the Holden (or Ford) badges.

I drive a Nissan anyway

 

[Scotland]

The reality is that the biggest obstacle to Australia being a manufacturing hub is our willingness to cut our own throats. Across practically every industry, we have some of the lowest levels of protectionism of any country in the world - generally a result of decades of aggressive unilateral tariff cutting that has gone far beyond what is necessary to foster local competition.

The reality is that there is an ingrained culture in Australia that we're better than we really are. People in this country are terrified of the notion of justifying their output. Holden were a big volume producer (for the time) decades ago and I'm sure their product was top quality, but the reason the Germans, Japanese and now Koreans have overtaken us is because they didn't rest on their laurels.

We went from the grey motor to the red motor to the blue motor, then to the black and whacked on an agricultural EFI system before importing the RB30 motor from Nissan then producing a Buick-design V6 for nigh on 20 years. In the same time the Japanese went from failing at producing simple cars to efficiently producing class leading vehicles from compact 4 cylinder cars to large 4WDs.

 

[Scotland]

Nah I meant as in they'll produce the same model overseas, but we won't get the Holden (or Ford) badges.

I drive a Nissan anyway

I reckon if and when local production ceases, Holden will continue to sell the same models as they do now - with the exception being the Commodore which I reckon will be consigned to history.

As for cars like the Corvette, I can't imagine that being sold as a 'Holden'. It's a Chevy Corvette, they've been around since the 50s.

 

[MarcusP2]

Nah I meant as in they'll produce the same model overseas, but we won't get the Holden (or Ford) badges.

I drive a Nissan anyway

I would imagine nothing will change except the Commodore will die. The Cruze is the only other Holden vehicle that's actually made in Australia and it's also made elsewhere.

 

[Tulip]

The Commodore, Cruze and Astra models are all so similar that it's quite surprising they've all lasted this long.

 

[Scotland]

The Holden Astra hasn't been sold since 2009, and I wouldn't say the Commodore and Cruze are similar. One is a large RWD sedan, the other a small/mid size FWD sedan or hatch.

 

[zimma]

I would imagine nothing will change except the Commodore will die. The Cruze is the only other Holden vehicle that's actually made in Australia and it's also made elsewhere.

Pretty much what I was trying to say odds are the Commodore will go, Camaro will come in to replace the SS and the rest will remain unchanged with the Malibu taking the sole "big car" spot.

 

[Caesar]

Czech Republic ≠ Europe, nor are their costs remotely comparable to Australia.

Their biggest selling model is produced in Czech Republic, India, Ukraine and Kazakhstan. Not exactly Scandinavia or Switzerland.

The point is that Skoda is owned by Volkswagen and uses Volkswagen-engineered designs, same goes for Dacia which is owned by Renault. Then you have a slew of mid-market affordable cars like Opel and Fiat that are both designed and manufactured in Western Europe.

This idea that all European cars are top-range is a myth.

As long as I can remember the industry has had its hand out to the government just to stay up and running.

Nobody is saying that the current way the industry is operating is sustainable. As The Speaker says, an automotive manufacturing industry in Australia is a viable concept - it just requires a massive change in mentality and direction.

The problem is that once the industry is gone, it's gone. You don't get the opportunity to revitalise the way it operates once you lose the skills and infrastructure. Which is why the mentality of 'cut the support, if they can't survive they don't deserve to' that we've lived on for the last however many decades is simplistic and shortsighted.

The reality is that there is an ingrained culture in Australia that we're better than we really are. People in this country are terrified of the notion of justifying their output. Holden were a big volume producer (for the time) decades ago and I'm sure their product was top quality, but the reason the Germans, Japanese and now Koreans have overtaken us is because they didn't rest on their laurels.

Oh, this is the same bullshit cultural cringe stuff you're always coming out with. "They're better than us, and the invisible hand of the market is just proving it". The Germans, Japanese and Koreans didn't unilaterally slash their domestic market barriers to foreign imports in the '80s and '90s the way Australia did. The problem is compounded by those countries having far stronger domestic markets than we do, given their size. Reducing protectionism in the motor vehicle industry was great for consumers, but it pretty much obliterated the opportunity to build strong local companies. In the mid-70s there were a dozen motor vehicle manufacturers in Australia. By the end of the 80s there were 4.

It is no surprise that the last local manufacturer left standing is Toyota, which is the most successful exporter of cars that Australia has ever had. But since Toyota is a Japanese company using Japanese designs that has no reason to maintain a local presence, it will simply relocate those facilities once it becomes cost-effective to do so.

If local marques and locally-designed products had developed a substantial export market in the 70s and especially the 80s/90s (when the Asian and then ME markets started to explode) then we could have well had a vibrant local industry producing Australian products that are in high demand. The massive market for Toyotas in the Middle East that the industry is currently relying on could have been a market for locally-designed Holdens and Fords instead. Plenty of blame for that has to go to the industry, sure, but when you are bleeding local market share it becomes very difficult to expand overseas. It's hard to design cars for export markets when you're busy trying to retain your existing customers.

I am all for free markets, but when the rest of the world doesn't play by Queensberry rules then you have to be a bit smart about it. A Thai car being imported to Australia attracts zero tariffs; an Australian car being imported to Thailand attracts a tariff of 80%. The EU, Korea and Japan all maintain huge levels of tariffs and subsidies on their automotive industries because they realise that successful international companies begin with strong markets at home.

Instead we've chosen to go the route of aggressively slashing import barriers to get a cheap consumer product. That's fine, but it's a definite choice. It doesn't equate to manufacturing 'not working' in Australia.

 

[shiva25]

We have a "huge landscape of countries" close by that we can export to. It's called Asia. We have a massive advantage by being - by far - the most politically and economically stable country in the region, yet we don't take advantage of it in the slightest.

There is no reason why we can't have the sort of technology available in Europe, nor is there any reason why we cannot manufacture items of high quality that are in demand around the world. We have the resources, location, infrastructure, and attractiveness to foreign investment to do so. How do you think that Europe got into that position in the first place? It didn't spontaneously erupt from a bombed-out crater post-1945.

The reality is that the biggest obstacle to Australia being a manufacturing hub is our willingness to cut our own throats. Across practically every industry, we have some of the lowest levels of protectionism of any country in the world - generally a result of decades of aggressive unilateral tariff cutting that has gone far beyond what is necessary to foster local competition.

Cant agree with you there at all. Why would Asia want to deal with us export wise when they can produce anything we can at a third of the cost. I was in the manufacturing industry for more than 10 years and am no longer in it due to the fact its dying a slow death. Ive been overseas to see the technology and the structures that are set up over there in manufacturing and they are far greater than here simply because they have the money and resources to set themselves up accordingly. Most of them also dont have to deal with shitty unions who continually try drive a knife into companies with threats of strikes and other troubling matters. We are just not that well set up and too far away that even our western European friends wouldnt want to deal with us either due to our higher costs. To set ourselves up the same way Europe is set up would require a monumental amount of money and resources and even then there is no guarentee it could thrive because of our location which is a huge factor when it comes to exporting.
I work for a large engineering company and when we need manufacturing done we always go through Asia as they are a third and sometimes a quarter of the cost than anything we can get locally here and the quality is just as good if not better and i suspect most other companies have caught on to this fact which is why theres been so many manufacturing companies either close or move overseas in recent years

 

[Caesar]

Cant agree with you there at all. Why would Asia want to deal with us export wise when they can produce anything we can at a third of the cost.

Why do they buy products from Europe and Japan? They have little to no cost advantage over Australia.

I was in the manufacturing industry for more than 10 years and am no longer in it due to the fact its dying a slow death. Ive been overseas to see the technology and the structures that are set up over there in manufacturing and they are far greater than here simply because they have the money and resources to set themselves up accordingly.

And we don't? We are one of the richest countries in the world per capita. Not to mention one of the most attractive locations for foreign investment in the eastern hemisphere given our political and economic stability, highly educated workforce and low levels of corruption.

Most of them also dont have to deal with shitty unions who continually try drive a knife into companies with threats of strikes and other troubling matters.

Irrelevant. The European automotive industry is the most highly unionised in the world, and they're largely the better for it. As long as there is an effective industrial relations framework in place, unionisation isn't an obstacle to commercial success.

We are just not that well set up and too far away that even our western European friends wouldnt want to deal with us either due to our higher costs. To set ourselves up the same way Europe is set up would require a monumental amount of money and resources and even then there is no guarentee it could thrive because of our location which is a huge factor when it comes to exporting.

Massively eurocentric view. Do Japan and Korea suffer from being far from Europe? Our location is a massive advantage. We can export to South and South East Asia (and even parts of the Middle East) far more cheaply than any Western European country. It is just a matter of having products they are willing to buy.

The availability of cheap labour in close proximity is actually a massive advantage for countries with companies capable of taking advantage of it on their own terms. Renault benefits massively from owning Dacia - they retained the skilled elements of design etc. in France, but construct in Romania. Imagine in 30 years an Australian automotive company producing its mid-range and higher-end models in Australia - but also running a cheaper marque, designed in Australia but built in Indonesia.

Yes, it requires time and money and investment - both from government and the private sector. That is generally how building an industry works. But we are talking about the existence of our economy here. Presently, we don't have much of a future past digging stuff out of the ground.

 

[Catfish Alley]

Caesar, how do you find the time to have such a detailed opinion on everything? I feel I am not using my time efficiently