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74 responses to “The General goes”

  1. Graham Bell

    “The high Australian dollar” and “high Australian wages” have always been convenient excuses – but their use as an excuses has been a handy indicator for us of real problems such as:

    # An unwillingness to innovate. And no, rebadging a vehicle from elsewhere in the stable is not innovation – nor is it innovation to emphasize the sale of vehicles with one type of reciprocating petrol engine rather than those with another type of reciprocating petrol engine.
    Too much Bathurst; not enough “give it a go”.
    Maybe GMH would have done themselves a favour by looking at a few Trabants, Lightburn Zetas, Messerschmidts, etc. – not to copy them! but to glean fresh ideas from them.

    # A lack of anticipation of the customers’ – and suppliers’ – real needs …. as opposed to their responses to loaded questions about their desires and wants.
    GMH are closing down just in time to avoid being swamped customer responses to the Indian One Lakh car and all its descendants.

    # Rusted-on attitudes that would be more at home in a Stalinist command economy than here in our grossly distorted “free(??) economy.
    The tenacity with which the Australian motor industry clings to old ideas and stale ways, in the face of overwhelming evidence that they are wrong, is truly amazing.
    The stubborn refusal to change direction when the need to do so is manifestly clear beggars belief. They still haven’t got over the shock of the arrival here of the Toyota Tiara.

    # And as Brian said

    In general, Australia’s biggest competitive weakness is in the quality of its bosses, both in politics and industry.

    so the excuses of the “high Australian dollar” and “high Australian wages” are used in the forlorn hope that they might distract everyone from looking unkindly at the very poor quality of Australia’s CEOs, directors and other overpaid examples of the Peter Principle

  2. Ronson Dalby

    Commentators can use all the facts and figures they like for and against an Australian motor industry but it boils down to this:

    Car companies for years now have been moving towards world cars where no matter what country you live in you can buy a GM whizza, a Ford whatsa or a Toyota thingy. The days of a country having orphan cars like the Commodore, Falcon and Territory are over.

    And when it comes to manufacturing cars, they are built in the countries where it’s cheaper to do so. Even Mercedes, VWs etc. are now made in Sth Africa, Thailand, Sth America etc.

    “The car industry has been given $19 billion in handouts and tariff protection over the past decade.

    The result of this is not a thriving industry but a sad kind of industrial charity.”

    http://www.smh.com.au/federal-politics/political-news/holden-departure-can-be-to-joe-hockey-what-banana-republic-was-to-paul-keating-20131211-2z6c3.html

    I think it was time to draw the line in the sand.

  3. joy cooper

    All countries subsidise their car industry. Most to a greater extent than here. “The line in the sand” I would like to see drawn is the end of subsidies to the mining industry, the tax breaks to the negative gearing industry (& yes, it is an industry) as well as capital gains & middle class welfare.

    The blind, stubborn ideology of the bullying Coalition has brought this about without any thought to policy or what can replace the car industry. Not only will many of its worker have to turn to Centrelink for their income but they will no longer be contributing to the country’s tax base nor able to afford to spend as much as they did when working. Local small businesses will suffer & so the effect multiplies.

    When we are not directly affected by such decisions it is all too easy to make pat statements such as “drawing a line in the sand”. It isn’t our life which is on the line or is it? Recession affects us all.

  4. Val

    Brian:

    In general, Australia’s biggest competitive weakness is in the quality of its bosses, both in politics and industry.

    After a long working life I’m afraid I share this view. Why is it? We’re a reasonably well educated people and yet we seem to struggle producing decent managers.

    Returning to Julia Gillard (I am not trying to start a stoush, I just think this is a good example), I found her a very competent boss as chief of staff in Brumby’s office. Reports from colleagues and independents in Parliament suggest the same thing when she was PM. As we also know, the government under leadership got through an impressive legislative program.

    And yet people on the left as well as the right have been reluctant to acknowledge this. Obviously being a competent manager is not everything, but it seems to be seriously under- rated (consider the present government).

    In my most recent steady job (ie not casual academic work etc), the final manager I worked under drove pretty well everyone who was independent or creative away. This included people who were well known and respected in their field. Yet after four or five years, that manager is still there. (Another person, who could have been an alternative, had previously got a move sideways that was really a demotion, and ended up taking retirement a bit earlier than she otherwise probably would have.)

    Obviously patriarchy and sexism had something to do with the Gillard case, but in the second example it’s not clear as both that manager and the CEO were female.

    It seems to me that in our culture we don’t really value competence or clear sightedness enough.

  5. Salient Green

    I notice it’s scheduled to close one year after the next election.
    That said, as someone who started their working life as a fitter and turner apprentice at Chrysler I am pretty disgusted with both major parties for their cretinous free-trade fundamentalism.
    It was a tough business before the tariffs came down and there were too many car manufacturers back then.
    The industry needed shaking up and reducing tariffs did some good things but to push an industry like this into oblivion, sacrifice all that skill, knowledge and economic benefit on the altar of free-trade so that we can force some of our beef, wheat and coal onto another market is execrable.
    If only I had Tony Abbott in stocks in front of me with a good supply of rotten fish and vegetables – that would be some good feedback.

  6. Salient Green

    And when I’ve finished with Abbott, put Keating in there with double the ammo.

  7. Terry2

    It seems strange that the government finds it totally logical and cost effective to subsidise private health insurance companies ( $30 billion over seven years) and are committed to wiping out the means testing introduced by Labor.
    Yet when it comes to the auto industry they will not budge on the subsidy ($10 billion over seven years) and virtually put GM in a position where they had to prematurely announce a pull-out even though the productivity commission have yet to report.

    I’m worried about the competency of this government and when we have a Treasurer publicly taunting GMH to ‘put up or shut up’ you have to wonder what his motivation was.

  8. Val

    Terry 2 @ 7
    Re Treasurer’s motivation, I wonder whether being seen by hard line ideologues to be ‘ weak’ on Graincorp might have something to so with it?

  9. Mahaut1329

    Like Terry2, I am beginning to doubt the competence of the government. It is not as if they are neophytes which was the case of Labor after 12 years out of government. This Ministry is packed with people who have been ministers before! And you would think they would be experienced enough to know that blame-shifting won’t work because Australians expect their governments to be in control – even though they frequently aren’t.
    Arguments from a policy point of view could be made for letting GM leave or helping them to stay. When finally weighed we should take into account the less-advertised benefits that will be lost if the industry moves offshore. It contributes to our having a critical mass in specialized manufacturing and a technically skilled workforce. Our strategic framework will be the poorer for its loss and I am sue the senior people in the Defence department would be worried at that prospect.

  10. Katz

    Kim Carr and Jay Weatherall have been saying that GM were willing to continue and had specified exactly what was required. My recall is that Weatherall said they wanted the Government to chip in $130 million. Carr told Waleed Aly that the price was significantly less than $150 million. Carr said further that the hectoring and bullying by Hockey, Abbott and others clearly let GM know they were not wanted.

    Devereaux on ABC774 right now denies that Carr’s $150 would have been sufficient.

    Moreover, he alleges that the decision was made before Hockey’s outburst.

    He was cagey about whether the Abbott government knew of the decision before the outburst. If so, then Hockey’s outburst was empty grandstanding.

  11. paul burns

    It wouldn’t matter if Labor or the Coalition were in power. For any government to act the way Hockey and Truss did yesterday is appallingly incompetent.
    Now, what will happen to the laid-off workers? Will the majority of them be forced to spend their redundancy/super payments before being eligible for the dole? Will those middle-aged and older men and women still still unemployed 12 months after being laid off be forced to jump through the humiliating hoops of Abbott’s privatised job search empire, and persecuted by Centrelink, being cut off benefits for minor infringements. Will they be caught up and punished in Abbott’s proposed merciless reforms of the welfare system?

  12. ArchCC

    How much of this is driven by a desire to smash a(nother) union dominated industry, to destroy the union movement by any means necessary? Does this same motivation explain the abolishment of the Early Years Quality Fund?

  13. Paul Norton

    Of course the Federal Government has botched this issue.

    Looking to the future, rather than simply preserving an industry that produces six litre V8s, the focus should be on what can be done to help the people currently employed in the vehicle industry be part of, and benefit from, the good ideas that trade unions and environmental organisations have been developing for the past 25 years about how the challenge of ecologically sustainable development and a carbon-constrained economy can be turned into an opportunity for a renewal of manufacturing and the emergence of new industry sectors.

  14. Brian of Buderim

    My concern is not just with General Motors Holden and their employees but with the component manufacturers and their workforce. At the worker level this could mean up to 100 000 workers becoming unemployed. Add in their families and dependents and it becomes much bigger and could tip Australia into “the recession we did not have to have”.

    Mahaut 1329 makes a very good point of a ‘critical mass’ of manufacturing industry and points out the implications for our defence industry of losing this kernel of manufacturing ability. In many ways we are being taken back to pre-WW2 Australia with the then minute manufacturing capacity.

    A politician has been defined as “someone who shakes your hand before an election and your confidence afterwards”. This is a very accurate description of our ideologically driven rightist government who seem to have no plan beyond Part 1, no script beyond the Dramatis Personae and no idea what to do next. What state will our poor country be in after 3 years of this!

  15. Graham Bell

    Mahaut 1329 @9 and Paul Burns @11:
    I do hope and pray that this is a result of gross incompetence and short-sightedness …. and not the result of grubby backroom deals, or worse.€€$$

    Val @4:

    Why is it? We’re a reasonably well educated people and yet we seem to struggle producing decent managers

    That’s easy;
    (1). Nepotism and Jobs-for-The-Boys.
    (2). Credentialism: hiring the pieces of paper, not the demostrable skills.
    (3). The Australian fear of hiring or promoting people smarter that oneself.
    (4). Arrogant stupidity – especially refusing to listen to the comments and suggestions of one’s subordinates.

    Salient Green:
    @5:

    The industry needed shaking up and reducing tariffs did some good things but to push an industry like this into oblivion, sacrifice all that skill, knowledge and economic benefit on the altar of free-trade

    My oath! These dumb-bunnies think shaking up is done with a sledge-hammer, not with intelligent thought and long-term planning.

    @6: I’m next in the queue to use the stocks and I’m bringing Hawke, Reith, Howard and anyone in the Business Council we can catch. Will three-day-old prawn shells and furry cauliflower do for a start?

  16. adrian

    Besides the incompetence of the government, (unless it’s a union busting exercise, in which case it has shreds of competence), what is clear in this country is that we need an impartial and wide ranging cost/benefit analysis of all the subsidies that are provided by the government to industry/mining/agriculture businesses.

  17. Ronson Dalby

    “All countries subsidise their car industry”

    Yes , but the corporations like Mercedes, VW, Peugeot are in those countries. We were subsiding American corporations. If it hadn’t been for the latter, we might have been able to export Falcons and Commodores to other parts of the world. Ford and GM didn’t want those cars competing with their US-built models.

    90% of cars purchased in Australia are now imports. Ford and GMH were never going to survive without increasing handouts and surely we have better things to spend the money on.

  18. adrian

    Ford and GMH were never going to survive without increasing handouts and surely we have better things to spend the money on.

    Well that’s the point. ‘Surely’ isn’t good enough when you are dealing with peoples’ futures and large amounts of money.

  19. Ronson Dalby

    Where does it stop, Adrian? Everyone in the car industry has known for years they were on borrowed time. At least they have several years notice before they get their redundancies. Not like my partner who was made redundant with 15 minutes warningafter being in a job for 7 years and whose job was taken by an Indian on a 457 visa for half the salary.

    What makes the car industry, apart from the size, deserving of handouts any more than any other failing business?

    It’s a wonder we’re not still supporting the stagecoach and buggy whip businesses.

  20. Bernard J.

    Over on the “44/28 Watch: nastiness and incompetence edition” thread I commented that I am not a fan of unbridled subsidisation of large and established industries, but I completely agree with Brian’s comments:

    My own view is that the demise of car making is probably inevitable, unless we could find a genuine quality niche in the global supply system. I would have preferred to keep the music playing a little longer, to maximise the opportunities for suppliers to also diversify and globalise their businesses also, and for governments to develop industry policy.

    Australia is fast becoming a country of buyers and not of sellers, and once the quarries are empty there will be little to attract the money back that we spend overseas.

    Some might point out that tourism might be a substitute. Forget it – we’re killing the Reef and trashing many of our best forests. And when our economy goes down hill as it certainly will, given the way that the Coalition is assaulting it (and the society that it sustains) in their first few months of government, we can be sure that the transport and hospitality infrastructure will be internationally unpalatable to tourists, as will future fuel costs.

    And food production is not certain over the coming decades. Not only is climate an issue, but a decrepit industrial infrastructure will hit the sector.

    Education? The tertiary sector is losing its edge in the international scene, and the current government is anathema to any chance of scientific or technological innovation.

    All I see is a government that is hell-bent on stuffing the pockets of its mates, and damned be the the rest of us and the future. People speak of a Australia becoming First World country with a Third World economy… I hope that they don’t think that this state would last too long – it won’t: in an ancient/geologically senescent continent with a (relatively) small population that is ever more becoming incapable of serving its own needs, there are inevitable consequences.

    I see no government policy (let alone understanding) that confronts the long-term sequelæ of the decisions that are currently being made.

  21. Chris

    Well that’s the point. ‘Surely’ isn’t good enough when you are dealing with peoples’ futures and large amounts of money.

    I agree with Ronson here – at least the workers at Holden have received a lot of notice about their impending redundancies. Its extremely rare to get almost 4 years notice to start planning – there’s lots of people out there who won’t even last 4 years in a job total. I don’t doubt its going to be very hard for a lot of the workers made redundant and owners of businesses which supply Holden but I don’t see a better sustainable solution being presented.

    I’d much rather they spend the money they would have to use subsidising Holden directly on the workers affected instead. 4 years is a significant amount of time to get a big head start on retraining or finding another job. And I think most workers would have understood for the last decade or so that this was a real possibility.

    Continuing to the payments to Holden in the knowledge that it isn’t sustainable just puts us in the same position as we are today except in maybe 5 to 10 years time. There may be different workers affected as some would have retired in the meantime, but others would have replaced them and they will be just as badly affected.

    There is also the side effect for workers and companies in industries which are undergoing similar change. If they think the government is always going to come into rescue them why would they bother thinking about initiating their own plans for retraining or diversifying (for companies).

    I question how much the Federal government could really have done to avoid this. The ALP when in government couldn’t convince either Mitsubishi or Ford to not shut down either.

  22. ArchCC

    90% of cars purchased in Australia are now imports.

    A well known result in modern trade theory is that countries that manufacture a lot of a particular good tend to both export and import a lot of that good. Economies of scale dictate that only a small number of types of the good in question (i.e. models of cars) can be produced efficiently in one country, but all types are demanded locally. Thus, a mix of types are imported, and a few types are exported. It follows that higher levels of (specialised) production imply higher levels of (diversified) importation.

  23. ArchCC

    What makes the car industry, apart from the size, deserving of handouts any more than any other failing business?

    The economic multipliers of its activity, the economies of scale that having a large manufacturing operation brings to other businesses, and the strategic capability that it provides our nation.

  24. Bernard J.

    I question how much the Federal government could really have done to avoid this. The ALP when in government couldn’t convince either Mitsubishi or Ford to not shut down either.

    I doubt that the federal governments of successive stripes could have done much to avoid the demise of the historic Australian penchant for larger cars, but one wonders if there might not have been a way to instigate a transition to at least some Australian participation on constructing ‘the cars of the future’ with directed development encouragement and through (gasp!) regulation mechanisms. One also wonders if a more concerted and forward-thinking (that is, detached from ideological and vested interests) encouragement of other future technologies might not have given rise to a healthier industrial sector better prepared to absorb the loss of Holden and the other car makers.

    On the matter of retraining workers, this only works as long as new positions are appearing at the rate that the old ones are being lost. My impression is that jobs in Australia are proportionately more likely to be part-time and relatively short-term, which does not usually go to strengthening an economy or a society, and certainly does not provide a net sink for lost full-time jobs.

    It’s not really very surprising. When spending overseas to get cheaper goods we are effectively buying a part of the disparity between those economies (and therefore living conditions) and ours, and without them buying it back from us in the form of Australian exports the net purchase of disparity will continue until the difference becomes much less significant. It’s thermodynamics, and the only way to maintain the disparity is to apply work: in economic terms this would be protectionism (the diversion of energy) of one form or another.

    An analogy for maintaining a disparity in levels of ‘wealth’ would be the hydraulic ram, and anyone familiar with the ram would be aware of the parameter restrictions required to have continuing operation – the trouble is that in our economy the people who want to bath in the head from the economic ram want to pump it beyond the thermodynamic constraints of the system.

    Adherents of Julian Simon’s notions of economic cornucopia might argue that it’s possible to increase the levels on both sides of a ram, but this is magical thinking based on the non-recognition that such systems only work by pumping energy in (and ‘entropy out’) from (to) somewhere else. On Earth that “somewhere else” is simply the parts that we haven’t yet fully exploited… but I am now straying far from the topic so I’ll leave it here.

  25. Bernard J.

    …Australian participation in…

  26. Chris

    but one wonders if there might not have been a way to instigate a transition to at least some Australian participation on constructing ‘the cars of the future’ with directed development encouragement and through (gasp!) regulation mechanisms.

    Perhaps I’m being overly pessimistic, but I’m pretty skeptical. Even with the large volumes you get with say the Prius, they’re still around say 30% more expensive that your standard ICE car. Regulation could force people to only have that option, but thats a big price increase for most people to cope with and that would have I’d guess significant negative effects on the rest of the economy (or people would simply hold on to their old cars for much longer).

    On the matter of retraining workers, this only works as long as new positions are appearing at the rate that the old ones are being lost. My impression is that jobs in Australia are proportionately more likely to be part-time and relatively short-term, which does not usually go to strengthening an economy or a society, and certainly does not provide a net sink for lost full-time jobs.

    That’s one reason I’m also skeptical about tourism being a replacement for these jobs. Other than trouble of them requiring quite different skill sets, I don’t think the latter delivers the reliability of work, especially full time work that industrial jobs do.

    I think its going to be very hard for a lot of the older workers. I heard a report on the effort that went into Newcastle after a very similar big loss of jobs. And they were saying that although with a big injection of investment they did manage to keep the unemployment rate down (in fact I think it even dropped), a close analysis showed that the new jobs were generally taken by people who didn’t lose their jobs in the shutdown. So you can help the local economy but its very hard to target jobs to specific people.

    It’s not really very surprising. When spending overseas to get cheaper goods we are effectively buying a part of the disparity between those economies (and therefore living conditions) and ours, and without them buying it back from us in the form of Australian exports the net purchase of disparity will continue until the difference becomes much less significant.

    I agree. I see this happening in the technology field where salaries for programmers in China and India are going up very fast. Its the problem I have with the “buy australia” sort of campaigns – I’m probably being very unpatriotic, but keeping quality of life levels low in other countries just to keep ours high doesn’t seem like a nice thing to do third world countries.

  27. Fran Barlow

    Chris

    I’d much rather they spend the money they would have to use subsidising Holden directly on the workers affected instead. 4 years is a significant amount of time to get a big head start on retraining or finding another job. And I think most workers would have understood for the last decade or so that this was a real possibility.

    I very much agree, and I’d have agreed with this a decade ago, when it was already very clear. Let them have a proper stipend (plus free admission to courses with a properly accredited RTO or perhaps tertiary study) to develop skills in some area that interests them. Give each of them access to a career and professional development planner who can work with them to get them where they need to be come 2017 with liberal “study leave” between now and then.

    It would be nice to think they could get jobs in some field drawing upon their existing skills and experiences but in some cases, a complete career change might be what the worker him or herself would prefer anyway.

    What is key is preserving the dignity and sense of worth of each person so that however regrettable it is to lose a place where one is emotionally invested, one can look forward with well-founded hopes of a rewarding future. It has been clear for quite some time that simply handing large lumps of cash to Holden was never going to do that.

    It seems to me however, that there are any number of interesting engineering options being thrown up by the advent of renewables, and that a state that was interested in such things could certainly find a way to employ people with engineering skils gainfully.

  28. Debbieanne

    Lets reduce subsidies to mining and increase subsidies to the un/under-employed, aged and disabled, to allow for greater participation(spending) in our communities. After all what else would said mining companies do but leave (ha ha, ha ha).
    I too have personal experience re redundancy, hubby was laid off, effective immediately, in July after 27 years with the same engineering(manufacturing) firm. And to answer Paul, no Centrelink benefits until September next year.

  29. Val

    People with engineering and technical skills that have been laid off due to decline in some manufacturing areas could be incredibly useful in our transition to a more environmentally sustainable society.

    Some of the work I’ve heard about in my research, that is happening in the Men’s Sheds movement and community sustainability projects, demonstrates this already. At the moment those are largely small scale and or voluntary activities, but that kind of work could be scaled up to provide proper career opportunities. At present it is happening in the underpaid and undervalued community and voluntary sector because our governments don’t have the wisdom to support it.

  30. adrian

    Where does it stop, Adrian?

    A better question should be ‘where does it start?’

    It should start with a rational and dispassionate analysis of all the various layers of subsidies that that various industries enjoy, and the benefits of those subsidies.

    For example I would have thought that the automotive manufacturing industry was more deserving of a subsidy than the private health insurance industry.

    Or the renewable energy sector as opposed to the mining industry.

    Once the analysis has been done, you would then determine the most efficient way to deliver these subsidies.

    In Australia we seem to lack strategic thinking on so many levels.
    Unfortunately you can leave out the word ‘strategic’ with the current government.

  31. Some Dude

    The gummint is probably happy to see Holden fail, so they can blame it on the unions, then use that ‘fact’ to push for ‘wage flexibility’ at other workplaces.

  32. Salient Green

    Graham Bell @ 14, the business council in the stocks, yeeess! Perhaps we can find something a little heavier to throw at the developers.
    I read where Mitsubishi workers were studied closely in their efforts to regain employment. Only 1/3 found permanent work while another 1/3 never worked again. The other 1/3 chased casual work.
    The way manufacturing, processing and local producers are being sent out of business by ‘free’-trade economics, it won’t matter how long Holden workers have to prepare they will still have a result similar to those from Mitsubishi, or worse.

  33. Graham Bell

    Everyone:
    Firstly, back @ 4, Val wondered why we can’t get decent managers here. I replied with four answers @ 15 and shall now add another two:

    (5). The delusion that hiring glib-and-glamorous foreign CEOs must always be better than promoting home-grown talent, even if the local has had lots of valuable off-shore experience. That delusion has cost all of us several major well-established firms, a brace of once-in-a-lifetime opportunities and a few tens of Billions of dollars.

    (6). Clowns hiring clones.

    Secondly, you can all forget about retraining the displaced workforce UNTIL you sort out the very serious restrictions on worker mobility in Australia, an issue that everyone has ignored for a few decades.
    How are you going to move workers to where their very valuable skills and experience are needed when you still have a 19th Century system of house ownership, mortgaging, selling and buying?
    Remember what happened in Newcastle and Wollongong? No? Thought not. FIFO is not the answer except in a few limited cases and all the stock-standard fanciful “solutions” are so far removed from the real world as to make the script for a comedy show.

    So get thinking. Laterally. How the blazes are we going to solve this very serious problem of worker immobility?

  34. Chris

    For example I would have thought that the automotive manufacturing industry was more deserving of a subsidy than the private health insurance industry.

    I think there’s a reasonable argument at reducing private health industry subsidies (just use a stick rather than stick and carrot), but at least the government money goes to making healthcare cheaper for Australians. When cars made in Australi are exported, the subsidies go to making cars cheaper for foreigners. A weird kind of foreign aid!

    It seems to me however, that there are any number of interesting engineering options being thrown up by the advent of renewables, and that a state that was interested in such things could certainly find a way to employ people with engineering skils gainfully.

    So if I heard correctly, Holden are keeping their engineering team in Australia. I think that means design rather than “making stuff”. So I’m guessing we probably are still competive when it comes to high skilled work related to manufacturing, but I doubt that many of the workers who are being made redundant would be able to move into those sorts of jobs.

  35. John D

    It would be interesting to see a list of subsidies to companies expressed as a $ per job protected. I suspect that Holden is not the worst case.
    I also suspect that other concessions add nothing in terms of protecting jobs.
    The worst subsidies are one given by cash strapped states to encourage an industry to set up in their state instead of another.

  36. Graham Bell

    Chris @ 34:

    When cars made in Australia are exported, the subsidies go to making cars cheaper for foreigners. A weird kind of foreign aid!

    The fools who worship The Falling Dollar will hate you for pointing that out.
    At least we won’t have to worry about the car industry doing that in a couple of years’ time. However, we will have to worry about that continuing to happen in a lot of other industries.

    Maybe it’s time we took a very hard look at all our exports – especially those in which the “profits(??)” are nothing but an illusion or an actual loss to the economy as a whole.

    As JohnD @ 35 suggests, we would do well to question the whole range of subsidies and concessions.
    Who knows but wiping out a wide range of bludger concessions and harmful subsidies might put the Budget into surplus very quickly.
    Mind you, doing so would make a few tens-of-thousands rather disappointed ….
    and the chances of any radical overhaul of subsidies and concessions happening with the current parliament are absolutely zero.

  37. Ronson Dalby
  38. Paul Norton

    I hope the AMWU gets some advice from a good defamation lawyer about Bill Leak’s atrocious and crudely propagandist cartoon in today’s Government Gazette that lacks any of the redeeming features that a cartoon is supposed to have and looks like the sort of thing you would find in a university Liberal Club rag.

  39. Sceptic

    From a distance, as I know very little about cars and the making thereof, I find it remarkable that discussion about Toyota following Holden has now morphed into that company being described as the Steven Bradbury of car manufacturing in Oz.

    Some industry analyists now talk about large sums being lavished upon Toyota.

    There is a focus too on the wages and working conditions of Toyota workers.

    What does it all mean?

    I have uninformed suspicions.

    I am sceptical.

  40. paul burns
  41. Ronson Dalby

    So were Abbott government members lying once again when they said Holden had not submitted tenders for the bomb-proof cars?

    “The top-of-the-line Holden Caprice was recommended by the Attorney-General’s Department in 2012 as the preferred option for a fleet of nine specialised blast-proof VIP vehicles to be used by the Prime Minister and other dignitaries, according to confidential government documents.

    The revelation appears to contradict reported Abbott government sources as saying Holden had not even submitted a bid in the tender because the car-maker simply ”was not interested””

    http://www.theage.com.au/federal-politics/political-news/claims-holdens-lost-government-vehicle-contract-was-part-of-a-vendetta-20131212-2zabq.html

  42. Ronson Dalby

    Ah … Paul, I wasn’t looking over your shoulder! :)

  43. paul burns

    Ronson.
    No, we just cross posted, I think. Clearly we see things along similar lines.

  44. Sceptic

    Is Toyota going to be a Trojan Horse in an assault on wages and conditions?

  45. jules

    Its hard not to be cynical about this – of course the industry is unsustainable – so why didn’t someone start thinking about dismantling our economic dependence on vehicle manufacturing years ago?

    The money we pay GMH enables more money to circulate thru the economy. While that industry is subsidised its workers and all the businesses that depend on them from components manufacturers to food shops contribute to cycling money thru the economy.

    This goes further than people think. Years ago in Melbourne I met someone who would have been otherwise unemployed – they’d buy about 20 kgs of chop chop tobacco every week and go sell it at the Ford plant in Broadmeadows. We met while talking in a pub where some of that money was being spent. Even that unusual example illustrates the complexity of the way the economy functions. Its a tiny one that but there are many more examples I’m sure – where do those workers buy lunch for example. Its like an ecosystem in that regard and when large elements of it fail the whole thing is in danger. I’m not advocating what that person did, but all the money they made circulated thru the local economies they were involved with. When the Broady plant goes that business and all sorts of similar ones legal or illegal (tho the vast majority are legal) are gonna lose massive amounts of financial input.

    Until that issue is sorted out and some other node of economic activity developed then we probably need to subsidise industries like Holden even tho its appears to be sending good money after bad. In 2016/17 our economy is going to huge hit when all the money that circulates because of the major car manufacturers presence suddenly isn’t circulating any more. The Australian economy might not recover. Didn’t something like this happen in Detroit?

  46. Bernard J.

    Jules.

    Detroit, indeed…

  47. Chris

    Its hard not to be cynical about this – of course the industry is unsustainable – so why didn’t someone start thinking about dismantling our economic dependence on vehicle manufacturing years ago?

    Well I think that’s true, though it falls on both the government and all of the businesses that depend on Holden to plan for the future. To a small extent the workers as well – it wouldn’t have been a surprise to them at all – what steps have they taken in the past decade to plan for the inevitable shutdown?

    The money we pay GMH enables more money to circulate thru the economy. While that industry is subsidised its workers and all the businesses that depend on them from components manufacturers to food shops contribute to cycling money thru the economy.

    That sort of argument works for any government expenditure though. Tax cuts for example (like Palmer’s suggestion of cutting income tax by 15% and that they’d get it all back via the GST). By giving the money to GMH there’d be a level of lossage where the money simply goes into profits, primarily of shareholders who don’t live in Australia.

  48. Sceptic

    Jules @ 45 – I agree with you.

    There will be so many little businesses which will be unsustainable, from people making bits to put in cars to chippies and pizza parlours which catered to the factory workers.

    This govt does not seem to have a clue otherwise they would be offering something more reassuring than suggesting car workers could take up jobs in the mines or nursing homes.

  49. jungney

    Well, are the Libs incompetent, always a possibility, or do I smell a think tank rat behind this? A recession, provoked by shedding the economic parisitism of GM, provides exactly the right economic context for an onslaught against unions and workers’ rights. It provides, at a time when unions are historically weak, the opportunity to turn the Australian labor market into an Americanized dog eat dog scenario.

    The Libs and the think tanks who gave us Patrick’s attack on the MUA, with the complicity of the Australian armed services who allowed serving troops to be trained as a scab army, well, the Libs and the think tanks are crude but they can be effective.

    Don’t underestimate these arseholes.

  50. adrian

    With this mob, if there’s a choice been ideologically driven vindictive maliciousness and incompetence, I’ll go with the maliciousness every time.

  51. Graham Bell

    Gentlefolk:
    There has been a bit of loose talk floating around about Australia recovering from the Mitsubishi-Ford-GMHolden mess we have allowed to happen to us by going for the Mittelstand approach.

    Well, you can’t.

    It would be a terrific idea to imitate Mittelstand – and its Japanese equivalent – but without a revolution in both (1) Banking, and (2) Education-and-Training, it would be impossible to implement in Australia.

    Yes, there are small firms in Australia that have been practicing what is close to Mittelstand for ages – against near-overwhelming obstacles – but you cannot expect large slices of the economy to follow suit. It just won’t happen. There is not enough flexibility here to allow it to happen and there are too many oxygen-wasters here with vested interests in stopping it happening.

    (1). The whole banking system here has been obstructing progress for nearly two centuries now – with a flurry of prudent investment from time-to-time but never consistent long-term investment. (and, no, self-glorifying propaganda and airbrushed history does not count as ‘consistent long-term investment’) . They have had it so good for so long that they have become lazy and hence have relied on merely fleecing their customers to make ‘profits’. Nothing short of a revolution will change that slack-and-idle mindset (let’s hope it is a bloodless revolution).

    (2). Education-and-Training is a very different problem. Wilhelmine Germany had an excellent system of education and training: university training and trade training (and training of the clergy and the armed forces leadership) were not in opposition but complemented each other – that’s why (and I am oversimplifying here) tradesmen were esteemed and professionals were practical. It was this system that partly enabled Germany to bounce back after massive defeats in TWO world wars. It would be nice to have a similar system in Australia. After all, it is one of the corner-stones of Mittelstande. BUT it will never happen in Australia UNLESS our whole education-and-training system is turned upside-down and thousands of obstructors are sent fleeing.

    All in all, the future is bleak for auto industry workers. No Mittelstand. No useful retraining. And, because they are prisoners of their unsaleable expensive houses (as I pointed out earlier), no job mobility either.

    http://en.wikipedia.org/wiki/Mittelstand

  52. Sceptic

    Graham – I am an admirer of Mittelstande auch.

    Jungney – I too am getting a whiff of more union busting.

  53. Nickws

    I see Andrew Bolt was just about the only pro-Coalition spinner blaming the unions for the Holden closure (though the govt are now saying Toyota’s fate is in the hands of the AMWU, which must come as a further nasty surprise to Toyota.)

    Not blaming the unions for this=/=primo evidence that the Abbott govt has a won a dry victory they don’t want sullied by populist Right claims about how industry assistance is still good in theory, just as long as the unions know their place. (Also, the fact they didn’t defend the subsidies of the Howard years—back when the low dollar provided a lot of bangs for the manufacturing industry assistance buck—also gives away their ideological hand.)

    We should keep this is mind when we propose John Buttonomics solutions going forward.

    Chris @ 26

    I’m probably being very unpatriotic, but keeping quality of life levels low in other countries just to keep ours high doesn’t seem like a nice thing to do third world countries.

    Like I imply on the other thread: why not let’s promote the fairtrade-, globalised 98%- thing for lifting up the 3rd World?

    Your reference to Indian IT professionals is otherwise the promotion of trickle down economics to that country via its chosen few—no sucessful Bangalore code writer needs micro-financing, nor a new well dug in his apartment block.

    Getting the WTO regime interested in said micro-loans and grassroots infrastructure projects is no more analytically heterodox than viewing all the world’s auto industries through the economics of sustainability. Or is it the case of heterodox opinions for Holden workers, but othordox opinion for Indians who aren’t fortunate enough to be in their country’s middle classes?

  54. jules

    That sort of argument works for any government expenditure though. Tax cuts for example (like Palmer’s suggestion of cutting income tax by 15% and that they’d get it all back via the GST). By giving the money to GMH there’d be a level of lossage where the money simply goes into profits, primarily of shareholders who don’t live in Australia.

    Thats true, but the specific circumstances here are very serious. In an economy with more resilience we could afford to let global competition run wild, but our economy isn’t resilient enough to cope with the loss of all car manufacturing.

    And yeah the truth is everyone should have been thinking ahead and planning for this sort of thing. It does seem to be the logical outcome of the last 30 years of economic policy, whatever you think of those decisions they were made and we have to deal with the consequences. Its also fair to ask why we are spending so much time and energy maintaining industries that were developed 100 years ago. We should be subsidising the development of the productive/manufacturing industries of the next 100 years. And should have been as a response to the “freeing up” of our economy.

    If we hadn’t had to deal with so much ideological opposition to the reality of climate change over the last 15 to 20 years then we’d probably be in a better position and be developing those industries now. Given we failed to do that we need to keep car manufacturing vaguely viable for 10 years while we find some other solution.

    I do tend to agree with the maliciousness over incompetence thing too. If powerful unions are associated with massive industries it isn’t beyond reason to see right wing jerks dismantle the industry. Lose heaps of manufacturing then declare war on mining unions – I think this happened in the uk 30 odd years ago too.

    If you’re cynical or paranoid enough its easy to see a trend worldwide and to assume class war and the reintroduction of feudalism seems to be the thing that really drives far right ideology. Especially if you read Bolt – I hadn’t for a while but did this week. When people in ownership and the upper echelons of management (and their media mouthpieces) start saying that workers earn too much and are ruining it for everyone else it never sounds right.

    Its not just Bolt. This was a constant refrain up until six months before the election.

  55. Graham Bell

    Joy Cooper @ 3:
    Their ideological ratbaggery and hijinks = our penalties, our costs and our losses.

    Sceptic @ 44:
    Of course. Why have efficiency and productivity when it is more fun to go for good old 20th century union-bashing – regardless of the cost?

    Jungney @ 49:

    the opportunity to turn the Australian labor market into an Americanized dog eat dog scenario.

    Yeah, and they are too thick-headed to see that was one of the major causes of America’s troubles and its fall from dominance. Why don’t they save themselves time and just go straight to Soviet-style Stakhanovism and be done with it; it makes just as much sense.

  56. Ronson Dalby

    I think this is a good summary of events if Hartcher has his facts correct. People can blame the government, the unions or whomever they like, but GM was always going to do what GM wanted to do, like any American corporation.

    http://www.smh.com.au/federal-politics/political-opinion/steam-under-the-bonnet-20131213-2zctr.html

  57. Sceptic

    Ah Hartcher seems to have got himself another gig.

  58. paul burns

    I’m not quite inclined to go with the right wing conspiracy theory. There might be a little of that, but I just don’t think these guys are smart enough to have planned it all out. If they were, they wouldn’t be in the mess they’re in.

  59. Paul Norton

    Paul B @58, I’m generally inclined to agree that, given a choice between devilish cunning or diabolical stupidity as an explanation of events, the latter is more probable. On the other hand I am finding it increasingly difficult to underestimate the current Federal government’s preparedness to bring about serious economic, social and ecological harm in pursuit of a political or ideological agenda.

  60. paul burns

    Or they could be just plain stupid, PN. One really has to wonder if they have, or are capable of having, the foresight to see the economic, social and ecological harm they will cause. Until its too late to fix, or they suddenly realise there are severe electoral consequences, ie, they’ll lose the next election.

  61. Sceptic

    Alas Paul x 2 I do not think they are stupid at all.

    I think some are ideologically driven and others are driven by ideologues.

    I don’t think they believe their actions will cause any social, economic or environmental harm.

    The PR machine appears to be in full swing again with understanding and interpretative pieces in the Fairfax press this morn.

    I wonder if the budgies will be out this summer?

    A trip to an aboriginal settlement will surely be on the cards for the PM: a discreet visit with widespread coverage.

  62. adrian

    I think this is a good summary of events if Hartcher has his facts correct.

    Now that Rudd’s gone, another gig was essential for the pontificating mouthpiece.
    Don’t know where facts come into it.

  63. Sceptic

    The National Disability Insurance Scheme launch sites are to be renamed TRIAL sites. Hmmmmm

    This govt are behaving like ten-pin bowlers. The former Govt’s policies are arranged like skittles and knocked over one by one.

  64. Sceptic

    Will their own parental scheme survive?

    You wouldn’t put your money on it.

  65. Graham Bell

    Gentlefolk:
    We have, in several locations, highly-skilled teams of workers who are not easily moved elsewhere.

    We can just allow these very valuable teams of workers to fall apart (as we did when building the Snowy Mountains Scheme was completed) and just allow the individual experienced workers in those very valuable teams to be chucked onto the scrap-heap as usual (Australia must surely be a world leader in this).

    OR …. we can set up some truly innovative and niche industries in these same places. We can keep these teams together in strictly-controlled and genuine (rort-free) retraining programs starting right now so that the transition from the vehicle industry to new industries can happen at a smooth and leisurely pace..

    Financing such industries would be no problem at all – just go to each bank with their banking licence in one hand and a box of matches in the other – and the all the finance required for such innovative and niche industries would just fly out of their coffers …. and wonderful new export opportunities would appear as if by magic. There are only two questions in this approach (1) How soon?, and (2) Who has the guts to “encourage” the banks?

  66. Graham Bell

    You can hear more over at ABC-RN’s Saturday Extra ….
    oh, that’s right; you shouldn’t listen to it because the ABC (formerly known as Menzies’ Mouthpiece) is full of communists, syndicalists, anarchists, advocates of unmarried sex, hedonists, after-hours drinkers, dole bludgers, punk rockers, readers of naughty novels, jitterbuggers, those who put small coins on the church collection plate, admirers of Jewish cosmopolitan art and even vegetarians.

    http://www.abc.net.au/radionational/programs/saturdayextra/after-holden/5155284

  67. Helen

    Oh! I missed this one. This is WHACK!

    Claiming that Olympic Dam could replace Holden manufacturing in SA.

    http://www.heraldsun.com.au/news/national/south-australian-jobs-creation-is-focus-of-council-of-australian-governments-following-holden-closure/story-fnii5yv7-1226782915941

    This is typical Liberal thinking: Workers are completely fungible. They have no life outside work which would be disrupted by a major move to a semi-arid region 550K from Adelaide. They have no families and no kids, of course, whose schooling would be disrupted by such a move. Finding housing would be a piece of cake, of course, I’m sure they’ll accept a donga made out of a shipping container…

    What… the… f***!!!!

  68. Tim Macknay

    Also, hasn’t the Olympic Dam expansion been shelved? What are they gonna do, jump up and down and threaten a tantrum unless BHP Billiton reactivates the expansion plans? Good luck with that.

  69. David Irving (no relation)

    I dunno, Tim, a tantrum won them the election, after all, so it might work on BHP.

  70. Chris

    This is typical Liberal thinking: Workers are completely fungible. They have no life outside work which would be disrupted by a major move to a semi-arid region 550K from Adelaide. They have no families and no kids, of course, whose schooling would be disrupted by such a move. Finding housing would be a piece of cake, of course, I’m sure they’ll accept a donga made out of a shipping container…

    So I think the Olympic Dam suggestion is just a pipe dream. I don’t see it coming back. But if it did, a lot of those jobs would probably be FIFO. Which has issues of its own, but for many workers would be a job better than none at all. Its not like a new car plant is going to pop up in Adelaide. New defence contracts is probably the best hope for quite a few of those workers who are unable/unwilling to retrain into a completely different field.

  71. Graham Bell

    The plans for displaced workers might look nice on paper but they lack reality …. and that is caused by ignorance of what it is like to be a blue-collar worker trapped by the credentialism racket and shackled to an over-expensive and unsaleable house.

  72. Tim Macknay

    and that is caused by ignorance of what it is like to be a blue-collar worker

    Or possibly, they just don’t give a sh*t.

  73. Moz of Yarramulla

    Chris@70:

    New defence contracts is probably the best hope for quite a few of those workers who are unable/unwilling to retrain into a completely different field.

    If only we didn’t have a largely gutted blue-collar education system and a government committed to significant structural unemployment. I note they’re also trying to prevent any job creation in the new manufacturing industries (renewables) in favour of pushing more workers into mining. Coming off the mining boom that looks like a plan to make Gina’s wish for a minimum-wage mining industry come true.

  74. Graham Bell

    Moz of Y @ 73:

    they’re also trying to prevent any job creation in the new manufacturing industries (renewables) in favour of pushing more workers into mining.

    In other words, the Liberals are striving to build the Socialist labour market they say they abhor.

    Gentlefolk:
    I shall now use dirty filthy swearwords here – but only in the interests of artistic expression and of helping displaced car industry workers.

    If you are offended by swearwords, please avert your gaze now ….

    Recognition Of Prior Learning (RPL). Why not codify, explain and record on an easy-to-read document all the jobs that each worker did while working at any of the car factories or component makers, together with an estimate of the number of days they carried out each task? These days, when so many HR people have little idea the detail of what a job applicant actually did from day-to-day, it would help the HR people match those very real skills and experience with the very real needs of potential employers …. at it could be done at a fraction of the cost of some of the woolly-headed schemes that are being dreamed up on the 99th Floor of Dimwit House.

    Those who are offended by the swearwords “Recognition Of Prior Learning”: please go straight to the next comment ….