FJ Holden
It started with Holden 48-215 or FX, followed by the famous FJ. Others followed. According to The Volkswagenwerk Classic and Vintage Club of Australia:
By 1962, Volkswagen was the 3rd largest producer of cars in Australia behind only GM and Ford, and the 10th largest VW market in the world.
Volkswagen purchased all Australian held shares in the local subsidiary in 1963, and Australia became a base for the export of cars to the rest of the South Pacific.
I owned an Australian Beetle in the 1960s, graduating from a Mini Minor. Were they made here too? I wouldn’t be surprised.
Once there were six, now there are three.
Louise Dodson had an article in Tuesday’s Australian Financial Review telling how Industry Minister Kim Carr is going to the US, China and Bangkok to discuss the government’s changes to car industry assistance made earlier this year. GMH told the AFR that they were reviewing their long-term investment plans here “after cuts to the $1.3 billion Green Car Innovation fund and concerns about sovereign risk.”
Abbott was also prepared to slice the green car fund to pay for the floods.
Carr is spruiking a $5.4 billion New Car Plan for a Greener Future up to 2020.
An accompanying article by Peter Ryan tells us that the industry is our biggest exporter of high-value manufactures.
The sector in the past was justified as the crucial technology underpinning for industries ranging from engineering to logistics, but it has yet to prove that its focus on skills and innovation is similarly crucial in the knowledge and service age.
GM Holden has spent $3.2 billion on R&D in the last decade, $1 billion of that on engineering a new Commodore. Roberts says:
There isn’t a car industry in the world that is faced with this sort of investment decision without some sort of public-private partnership and, most likely, high tariff and non-tariff barriers.
Will 5% tariffs and $5.4 billion assistance to 2020 be enough to keep our car makers interested? Roberts says that if they have to go it alone, they will just go.
But then he also says that they are not cost competitive unless the dollar returns to “a more normal level than today”.
What chance of that in the two-speed economy?
My second car was grandfather’s FJ Holden in Chiltern Cream see above, it was preceded by a Morris Minor with a 12 volt electric system.
My grandfather was one of the debenture holders in General Motors when they started producing cars in Australia. The debentures were backed by the Australian government. They were not pleased when the debentures were repaid and ownership and all profits flowed to Detroit.
Good riddance – this industry has been a drag on Australian taxpayers and consumers for decades. As a big, sparsely populated country our unequivocal interest is in efficient transport.
And even if you actually don’t agree with that and want to keep the local industry on life support indefinitely (as we have), then it’s still good riddance to one or two firms – it means Ford and/or Toyota get closer to reasonable scale economies and so won’t have their hands in our pockets quite as much.
As for the employment effects of Holden’s departure, these would be quite trivial in the scheme of things. In the long run a more efficient economy creates more jobs elsewhere, but even in the short run we’re talking about the destruction of a few thousand jobs in an economy that creates and destroys about 3 million jobs a year.
As for R&D expenditure this is not an end in itself. No doubt the Swedish banana industry would have the highest R&D expenditure of any banana industry in the world, but that doen’t mean Sweden wouldn’t be better off without that industry.
dd, I’ve long thought that as a smallish nation in population terms we would have been better off with only one car maker. Those who emphasise competition in the domestic market sometimes don’t take into account that the real competition comes from elsewhere.
We’ll soon need to replace a 1985 Subaru Leone that has done about 300,000km. It’s astonishing that you can buy a new Hyundai Getz for almost the same nominal dollars as we paid back then.
There are lots of things we don’t make here.
The Australian motor industry didn’t start with the 48-215.
Ford was assembling Model A’s in the 1930s.
However, the first Fords assembled in Australia had their bodies supplied by…Holden Motor Body Builders, who were churning out thousands of motor bodies, mainly for GM products, through the twenties.
Thanks, Robert. We live and learn!
I bought a “Manly Tan” VW in ’59 on return from Malaya. My previous car was a Holden that preceded the FJ. My first car was a ’53 Vanguard followed by an International ute.
Sorry, Brian, that wasn’t supposed to be smart-arsey.
The deeper point here is that the car industry has been the beneficiary of a number of myths, of which you’ve innocently repeated one.
dd the loss of Holden might be small beer at the national scale, but I can’t see its effects being trivial for the South Australian economy. SA already suffers major disadvantages with respect to providing employment for skilled and professional workers. I don’t have data to hand, but my guess is that Holden may well be the largest single employer of skilled tradespeople in the state.
Robert @ 8, no probs. I didn’t take what you said as smart-arsey. What I don’t know never ceases to surprise me!
Zorronsky @ 7, growing up we started with a ’26 Dodge car converted to a ute, then additionally a ’39 Buick. After that there was a German VW and in the mid-50s a Holden ute. Boring thereafter.
I think that it doesn’t make sense to use public funds to finance the design/tooling for a compact 4 cylinder (holden cruze). Its the most competitive sector in the market. South Africa, Thailand and Malaysia are already way in front manufacturing these type of vehicles. And VW/Audi are miles in front in engineering – TSI engines and DSG gear boxes.
Feral abacus, I don’t think it would be a huge issue for even South Australia. Labour markets everywhere are more dynamic in response to localised industry (as distinct from overall aggregate demand) troubles than most people realise, for a start. Take the Howard public service cuts of 1996-97; in the ACT labour market of just 180,000 people the major employer shed 26,000 jobs in a year – a far, far bigger local shock than anything Holden could do. Result: the ACT unemployment rate temporarily jumped 2 percentage points, but within 18 months was back where it was.
Let’s do a back of the envelope calculation here. Total employment in all states in car making is now under 50k (PC report on automotive industry, 2003). Assume Holden and its component suppliers have about 20k of them – but that’s an overestimate because the component makers employ far more than the manufacturers and many of them also supply Toyota and Ford, who sell more Falcons and Camrys if Holden leaves. So say roughly 15k jobs. Say two thirds of them in SA. That makes a loss of 10k jobs, which in a South Australian labour force of 860k would be buried in the statistical noise in the stats. That’s no consolation, of course, to the 10k individuals who have to look for another job, but with average job tenure about 4 years they have over 200k people in the same boat in their state each year anyway.
As usual, the “jobs lost” argument for propping up an individual employer is a bit of a croc.
” … graduating from a Mini Minor. Were they made here too? I wouldn’t be surprised. … ”
In the 1960′s the Morris Mini, along with other BMC/British Leyland cars, was assembled at a factory in Zetland, an inner Sydney suburb, from parts imported from Britain. In the mid-70′s after a combination of the P76 disaster in Australia, and British Leyland’s endemic problems reaching crisis point in England, Leyland Australia, as it had become, stopped making cars here, but for a while, Leyland Mini’s were assembled at Enfield, another Sydney suburb. So, yes, your Mini was made here.
Thanks, Phillip.
Brian when my kids were small I had a 1938 six/ fourteen Vauxhall saloon. Handy little back seat that slid forward into the foot space making room for a bed for the three kids. Also pre army days I camped in a marine ply box that came off the wharf having been used to transport a car from the old dart. A door on one end and a hole for a roofing iron fireplace in the other. A couple of fruit boxes saplings and a chaff bag filled with bracken for a palliasse saw me through a winter near Matlock .
That old Vauxhall had an OHV engine from GMC and matched to a floor mounted gearstick. I wrecked the diff towing my tipper and discovered that by filing out the banjo housing I could fit an A30[Austin] diff in.
The six/fourteen was cylinders and horsepower.
And I totally agree, pre 60′s cars were never boring.
derrida derider, thank you for your considered reply, even those parts that IMO are contestable. It’s a pleasure to have something substantial to argue against.
First, although I think the Canberra public service data you cite are interesting, at this point I’m not convinced that the labour force dynamics evidenced in your example are readily generalizable. As I understand it, the archtypal Canberra public service employee is a youngish university graduate with few ties who has moved to Canberra for work. Such people tend to be highly mobile, and, in the event of unemployment, are likely to return to their home states origin where they would be well placed to take positions in the state public service.
And that is what the data you cite do not divulge – it tells us what happened in the ACT, but it does not tell us what happened to those employees who filled the 26,000 positions that were shed.
Further, I suspect the profile of the archtypal GMH employee is rather different from that of a Federal public service employee. Many GMH workers are people who would find great difficulty gaining employment outside the manufacturing sector, and – having young families – would find interstate relocation onerous.
I’m not sure where your SA workforce of 860K comes from: one reliable source puts the figure at 821K. But I’m not going to quibble about a 5% difference. Instead, I’d highlight the Northern Adelaide data (where GMH are situated): both youth and total unemployment statistics are considerably higher in this area than in any other part of Adelaide, and exceeded only by SA rural youth unemployment.
My point is that – broadly speaking – there are no alternative employers in Adelaide for many of these workers (fitters & turners tend not to make good sales assistants). I can’t imagine that tens of thousands of economic migrants from SA to the eastern states would not be accompanied by significant social problems.
That ‘reliable source’ is here.
Fitters and turners, Feral Abacus, would make a killing in the mines or in mine equipment making – as indeed would any of the skilled metal trades. In fact I’ll wager the car manufacturers are having real problems with that at the moment, and it is probably the reason they’re pestering a sympathetic Kim-il-Carr to subsidise their training costs.
Look, maybe I’m underplaying the local problems caused by industry restructuring but that’s just a correction to the massive exaggeration usually claimed by those wanting a handout to stop the restructuring. My basic point is that beyond very local (note we’re down to suburbs now in the discussion) and usually transient problems change on this scale (ie Holden pissing off) is just not a big deal.
We no longer have huge numbers of ol<der migrant factory fodder, and anyway making cars no longer calls for it. If there are in fact large numbers of local unemployed yoof who are not employable in service industries, then they're probably not employable in making cars either.
PS your reliable source is not up-to-date. Get it direct from the ABS.
Feral (and dd), I was a gopher for an academic at Adelaide uni about 15 years ago, and he had a particular interest in the socio-economic conditions in Adelaide’s northern suburbs. (It was about the time that the Multi Function Polis morphed into a bog-standard housing development at Mawson Lakes.)
One of my tasks was to map the daily traffic to each of the Local Government Areas, and total employees, using Census data about where people worked and lived. The total number of people working in Elizabeth (which basically meant GMH and DSTO) was huge – more than any other LGA, from memory.
If Holden closed down its Australian operation, the effects would be devastating to South Australia – the manufacturing sector has really only just recovered from the Mitsubishi shut-down.
Don’t take this as special pleading for the car industry, btw – it’s just an observation.
dd, that data may be up to date, but it’s not very useful if you’re interested in SA.
dd & DI(nr) – the SA state employment data are in Table 7 at link. These give a total unadjusted employed persons for SA of 821.5 K for May 2011, which matches the figure given at the ‘reliable source’ I linked to at comment 17.
dd I too have that impluse to take a contradictory corrective stand. Having lived & worked in Brisbane & Western Sydney after growing up in Adelaide, my position is that few people on the eastern seaboard have much idea of life and opportunity in SA. So that’s the premise from which my own contradictory & corrective stance originates.
I’m wondering whether your comment re fitters & turners doesn’t run counter to market theory. On the mild assumption that mining companies pay rather better than GMH, wouldn’t fitters & turners whose abilities & personal circumstances permit employment in this area already be doing so? And while the SA mining sector may well provide employment opportunity in the future, I’ve been hearing that many projects have been put on hold since the GFC. So in the short term, the mining sector will not absorb many workers should GMH close.
But the more important point is that GMH workers have very few alternative employers in SA. There’s Hills Industries, the Submarine Corp & a few smaller companies like Korvest. To the best of my knowledge that’s about it, though DI(nr) may be able to add to my list.
Consequently, closure of GMH would result in a big increase in SA’s unemployment rate and/or force an exodus of skilled workers and their families to the eastern states.
It’s also important to understand that the broader Elizabeth/Salisbury region is large: it probably approaches 25-30% of Adelaide’s area. Remember that Elizabeth was originally established as a satellite town. We’re not talking about a suburb or two here: its a big chunk of a capital city.
There are a couple of other defence companies aside from the Submarine Corporation, Feral, and Detmold’s still have a presence, but as far as I know you’ve pretty much covered SA’s manufacturing base.
The list of companies that no longer exist is far more extensive.
Thanks for filling in my gaps, DI(nr). And yes, the matter of defunct companies lies at the heart of this: manufacturing has been a sharply declining sector in SA for many, many years now.