By on August 20, 2012

“It should be right at home on the roads and farms of the US,” writes the Herald Sun in Australia,  “but tariffs and the strong Australian dollar could prevent the Commodore Ute following the sedan as an export.”

It’s more the chicken tax than exchange rates what derails hopes of U.S. success of the Holden Commodore Ute.  The new VF Commodore sedan will be exported to the U.S., where it will arrive as a Chevrolet SS. The Ute will stay at home.

Holden’s SA corporate affairs manager, Sean Poppitt said the Ute was “not a serious option under the tariff regime”.

“The tariff triples when you go from Commodore to Ute. It’s under a light commercial heading, so it’s a 35 per cent tariff,” he said. TTAC commenters say Poppitt and the Herald Sun should consult the customs tables.

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124 Comments on “Chicken Tax Derails U.S. Success Of Holden Ute...”


  • avatar
    kvndoom

    WTF.. they are going to classify it as a truck? Ugh!! Stupid f’in Chicken Tax!

  • avatar
    th009

    An atrocious abuse of tariffs for 50 years now. And apparently no one has the courage to change it.

  • avatar

    Chicken Tax is the national shame of America.

    • 0 avatar
      billfrombuckhead

      Jeeps Sell for $189,750 as China Demand Offsets Tariffs

      http://www.bloomberg.com/news/2012-05-22/jeeps-sell-for-189-750-as-china-demand-offsets-tariffs.html

      • 0 avatar
        wsn

        No, in the article, it’s 1.2RMB, not $189,750.

        That two amounts are roughly the same, if you are transacting USD fund into RMB fund in a bank(but not vice versa). But if you are talking about cars, 1 USD = 20 RMB, so that’s only $60k USD.

        The effective price (or exchange rate) differ when the location and industry differ. It’s like, if a 3000sf house would cost $1M in L.A., a home owner in Austin can’t say his identical 3000sf house is worth $1M.

      • 0 avatar
        racer-esq.

        The house in Austin is likely worth the same as the house in LA, if built and finished to the same level. The land is a different story.

    • 0 avatar
      rnc

      It seems to me that the real shame of america is that we decided to trade the poisoning of our population for cheaper food and artificially supporting farmers (corn is poisonous to cows and chickens).

  • avatar
    Pch101

    The chicken tax is easily avoided. Subaru did it by bolting seats into the back of the Brat. Toyota did it by shipping the trucks without beds and installing the beds at the US port. Ford does it today with the Transit by shipping them as MPVs, and ripping out the seats and the windows after they arrive on the east coast.

    “‘The tariff triples when you go from Commodore to Ute. It’s under a light commercial heading, so it’s a 35 per cent tariff,’ he said.”

    The auto tariff is 2.5%. The truck tariff is 25%. There’s no tripling, and there’s no 35%.

    It sounds as if the Holden guys don’t want to admit that there just isn’t any demand for these things. The Aussies don’t want them anymore, and we don’t, either.

    • 0 avatar

      If it’s so easy to be avoided, why have it in the first place?

      • 0 avatar
        Pch101

        You’re confusing one argument with another.

        I’m not defending the tariff. What I’m pointing out is that the tariff isn’t ultimately a big deal, and it isn’t keeping anything out of the US market.

        Holden is lying. Presumably, this is a prelude to further production and job cuts in Australia. (“We’d sell our wonderful vehicles to the Yanks, but their bloody taxes keep us out. Now, enjoy your layoff notice, and try not to notice that even Aussies don’t buy Commodores anymore.”)

        • 0 avatar
          Levon2

          Unbelievable. You spread misinformation and then call Holden a liar. The chicken tax is NOT easy to avoid and was a joke the day it was instituted and even more indefensible within weeks after it was instituted and that was 50 years ago.

          The Brat? Yes, Subaru bolted plastic seats on a “sport ute” and sold about 200 of them, mostly to surfers who immediately took the seats out and saw the beds of their vehicles rust out in less than a year. Notice how no one else ever followed suit with that brilliant idea? There’s a reason (no one will buy them).

          Toyota’s truck bed plant in Long Beach? That ploy did NOT help them avoid the chicken tax. They paid (excuse me, the final customers paid) the full 25% tariff on all the trucks that went through that facility (not true for the trucks they later produced in Fremont, of course).

          True, the Ford Transit strategy is working, so far. Ask the Ford folks if that workaround is “easy”. They will tell you – it’s not.

          As for me, I would be first in line if they ever offer the Holden or Ford Aussie sport ute in the US. I’ve driven them both on visits there and love ‘em.

          Yes, the tariff is 25, not 35%. But, the fellow who stated the chicken tax is a national shame is right on. The guy who said Holden is lying is, let’s just say, misinformed.

      • 0 avatar
        Roberto Esponja

        Give that man a cigar…

      • 0 avatar
        Sinistermisterman

        … and a beer. I love your comments Pch101. They’re very often like a razor sharp scythe of truth cutting through the doublespeak and Bullpoop.

      • 0 avatar
        jkross22

        Bad policy is rarely removed…. it is simply supplanted by other bad policy by the highest bidder, err, political contributor(s).

        Politicians need monied interests to be dependent on them.

        Casino government.

    • 0 avatar
      APaGttH

      …The chicken tax is easily avoided. Subaru did it by bolting seats into the back of the Brat…

      That would not fly in today’s safety obsessed universe. They’d be calling it a death trap and the first roll over that took someone’s head off GM would be sued for tens of millions. You would be quick to point out how dumb it was to put in the seats.

      …Toyota did it by shipping the trucks without beds and installing the beds at the US port…

      The Commodore VF is not body on frame, and it would be a fortune to ship a completed sedan to the states and then chop it into a Ute. Then you could complain about a lack of structural rigidity in the after market modification.

      …Ford does it today with the Transit by shipping them as MPVs, and ripping out the seats and the windows after they arrive on the east coast…

      See comments above, not possible with the Holden Ute.

      …It sounds as if the Holden guys don’t want to admit that there just isn’t any demand for these things. The Aussies don’t want them anymore, and we don’t, either…

      Ooooooooooooooooooooooook

      • 0 avatar
        Pch101

        Good job, Toadster. You not only missed the point, but you went out of your way to miss it.

        The point is that the chicken tax has enough loopholes that you could drive a truck through it. It’s an inconvenience, but it isn’t a deal killer.

        Convincing Americans to buy Australian El Caminos, on the other hand, is a problem. You might have noticed that GM stopped trying to flog these types of things to Americans over twenty years ago. They discontinued that for a reason.

      • 0 avatar
        dejal1

        Ford may send Transits all with back seats, but some are sold as MPVs with windows in the back and seats intact.

        That being said, I’ve only seen 1 on the road with windows and a back seat.

      • 0 avatar
        msquare

        Actually, I’ve seen a few Transit Connects with windows and back seats. They’re being used as New York City taxicabs.

        As for the Holden Ute, sure there are a handful of people who would go for a modern El Camino, but is there enough of them to adapt them to US regulations, let alone circumvent the chicken tax?

        Remember the Monaro had to undergo a few modifications to become a GTO, not the least of which was relocating the fuel tank ahead of the rear suspension.

        But what really torqued me off about this whole sort of thing is how the GTO was received when it arrived here. Enthusiasts pined for it beforehand but knocked its “bland” styling.

        Personally, I’d grab one in heartbeat.

      • 0 avatar
        RobertRyan

        They sell a lot better than the Corvette; Do you want the Corvette?

      • 0 avatar
        highdesertcat

        “Convincing Americans to buy Australian El Caminos, on the other hand, is a problem. You might have noticed that GM stopped trying to flog these types of things to Americans over twenty years ago. They discontinued that for a reason.”

        Yeah, I actually have to agree with Pch101 here. When he’s right, he’s right. The people I know who own an El Camino or Yumpin’ Yimini (the GMC version) keep them around for their uniqueness, but have never expressed a desire to buy a brand new one.

        And no one has offered to buy these orphans and ugly step-children from them either.

      • 0 avatar
        Maymar

        The Sprinter (at least under Dodge) was assembled in Germany, before the engine, transmission, axles, and wheels were removed and reinstalled upon arrival in America. Anything there you can’t do to the Ute?

      • 0 avatar
        Rental Man

        @ Maymar

        @ The NY Auto show I met with a Sprinter rep. He said the Sprinters are actually split. The Cargo ones arrive in parts. Mercedes has been pushing the CREW VAN as all they add is a bench with seat belts and 2 windows. That allows them to be shipped into the US and avoid paying chicken tax.

    • 0 avatar
      th009

      The pickup-without-a-bed loophole was closed a long time ago; cab-only trucks are still subjected to the same tariff now.

      Someone in Washington ought to show some guts and get this killed. But how likely is that?

    • 0 avatar
      RobertRyan

      No, Holden is not Lying. GMNA does not know if there is a market in the US. They are not like the F150, but in Holden’s case a “Corvette with a Bed”. So a lot of confusion in the US, in what niche they would be put in, plus we have the Australian Dollar THEN the Chicken Tax on top of that.

      “The Aussies don’t want them anymore we don’t either”
      Just like the Ford F150 is being rejected in the US.

      • 0 avatar
        Pch101

        “Holden is not Lying.”

        Note the link below. There is no tariff.

        The guy from Holden is either (a) lying or (b) ignorant. You pick.

        “So a lot of confusion in the US, in what niche they would be put in”

        GM started selling these things to Americans in 1959. We aren’t exactly unfamiliar with the concept; we just don’t want them anymore. Neither do you, apparently.

    • 0 avatar
      joeaverage

      So duplicate the tooling and build it here in the USA. Other brands such as the Europeans and Asians build stuff here competitively, why not GM with the Aussie designs or the European designs?

      • 0 avatar
        CJinSD

        UAW.

      • 0 avatar
        highdesertcat

        CJinSD, I agree. I would like to have seen Tata and Mahindra be able to introduce their little pickup trucks in the USA, especially the diesels, but the concerted lobby from the US domestic automakers was just too strong.

        Building a Holden here? No way. Building the Camaro in Canada was trauma enough for the UAW, but THAT they could not fight because it was not their turf.

    • 0 avatar
      Herm

      There is a demand, but rednecks want to pay about $25k for them, or about the cost of Malibu..no can do.

      People complain about pickups getting to large to easily reach into the bed, here is a perfect solution.

  • avatar
    mr_muttonchops

    It kinda sucks that GM can’t find a way to circumvent this ala the BRAT, but it makes me wonder if the Chicken Tax is even relevant in today’s market.

    • 0 avatar
      rpol35

      The way to circumvent it is to build it in the U.S. The Chevrolet SS production will migrate to the U.S. after 2014 so Ute production could too. Actually, it may make sense considering that the platform, drive train, etc. is the same. I doubt that neither the SS nor the Ute will sell in big numbers, some combined production for U.S. spec models should drive down the manufacturing cost.

      • 0 avatar
        Joe McKinney

        They could also import the utes as knock-down kits which are assembled here. I believe this is how Mercedes gets around the Chicken Tax on the Sprinter.

      • 0 avatar
        th009

        Of course, if you go the CKD route (probably the only option here), you could also do the final assembly in either Canada (not so likely) or Mexico (much more so). So it doesn’t really protect US jobs anyway — at least not to the extent the UAW hoped when they pushed for it in the early 1960s.

      • 0 avatar
        APaGttH

        Exactly.

      • 0 avatar
        Rental Man

        @ Joe McKinney

        Mercedes pushes the Crew Van of the Sprinter as they don’t have to piece it out like the Cargo vans. windows and a bench with seats belts is all they needed to drive the van onto a boat. Like the Transit Connect.

      • 0 avatar
        RobertRyan

        No it will not. If the Holden Statesmen or the bare bones Chevrolet SS version were sold in largish numbers it would affect GM US, Cafe ratings.

    • 0 avatar
      jkross22

      It’s definitely relevant. A company simply hasn’t ponied up enough money to change it yet by renting the right people in government.

      It’s something else politicians have for sale.

    • 0 avatar
      Slab

      It’s not like anything comparable is built in North America. What exactly are they protecting?

  • avatar
    rmwill

    Exporting cars from Australia makes no financial sense. Increasingly, even building cars in Australia makes no financial sense. Even without the Chicken Tax, there would be no sound business case, just like the GTO, G8, and now the Police Interceptor.

    • 0 avatar
      psarhjinian

      It’s not just exporting cars from Australia, it’s car-based pickup trucks. There’s no market for these in North America, regardless of where they’re built.

      You could build Zeta-platform cars in North America today. GM does it now in Oshawa with the Camaro, which is a very flexible, very modern and somewhat under-utilized plant. If there was a market for the Ute, they could assemble them there.

      But there’s no market for the Ute. There’s barely a market for the Commodore, and the only reason we’re getting that is to make it less unprofitable for Holden to run their own lines. Full-size nonpremium rear-drive sedans make no financial sense.

      The chicken tax is a Hail Mary.

  • avatar
    Hank

    I don’t recall this being a big problem when it was going to come over as a Pontiac…

    • 0 avatar
      APaGttH

      That was a different GM and when the plan was being laid out, the US dollar was stronger than the Aussie dollar. By the time they would have pulled the trigger, the US dollar was in collapse and the Aussie dollar on the rise due to the commodity markets. Absorbing the tax is difficult now.

    • 0 avatar
      joeaverage

      I don’t remember the Holden/Pontiacs selling very well despite being some of the most interesting Pontiacs in decades.

  • avatar
    el scotto

    Maybe someone came to their senses and looked at Ridgeline sales.

  • avatar
    big al

    Give me one with all wheel drive and I’d be happy……Maybe they don’t sell well,but they sure are pretty.

  • avatar
    ExPatBrit

    The old North America Ranger sold 80,000 units in 2011 in North America and was cancelled because building F150s was cheaper. Ford will not import or build the “World Ranger”.

    GM could never sell enough of these to make it pay. It’s a “image” truck.

    • 0 avatar
      el scotto

      Ford left a gaping hole in their product line up and hordes of disgruntled ranger/former ranger owners. Time will tell if this was a smart move.

      • 0 avatar
        ExPatBrit

        I am on my third Ranger, so I don’t disagree. The Ranger was the second most popular compact truck in NA sales, outselling all but Toyota.

        Nevertheless if 70-80,00 units isn’t enough on a fully amortized product you gotta wonder whats going on.

  • avatar
    racer-esq.

    Based on subheading 8704.21.00 here:

    http://hts.usitc.gov/Table%2087.xml

    And the definition of AU here:

    http://hts.usitc.gov/HTS_codes.html

    It appears that pickup trucks and other light trucks from Australia are already duty free. That is what is supposed to happen under the free trade agreement that is in place with Australia.

    Holden appears to have no idea what it is talking about, other than that the value of the Australian dollar is an issue, which is true.

    One of two things will happen if Aussie utes are brought to the US:

    1. Nobody will buy them, and they will sit on lots and have to be massively discounted.

    2. Lots of people will buy them, cannibalizing the sales of much more profitable pickup trucks.

    For this to work for GM Ford and Dodge pickup buyers would have to switch to GM utes, and GM pickup buyers would have to stick to pickups. I’m not sure that’s how the US pickup truck market works.

    • 0 avatar
      Pch101

      “It appears that pickup trucks and other light trucks from Australia are already duty free.”

      It would appear that you are correct.

      Well done on the research.

      • 0 avatar
        RobertRyan

        No he is not correct. Cars are duty free, not what is classified as a “Pickup truck”a category it would be classified as in the US.

      • 0 avatar
        Pch101

        He is correct, except that he should have referenced 8704.31.00, rather than .21.

      • 0 avatar
        racer-esq.

        Re: Pch101 – Good catch, despite the popularity of Holden Utes on the internet they are not available with diesel engines. Subheading 8704.31.00 it is.

      • 0 avatar
        Pch101

        Since Mr. Ryan doesn’t seem willing to read American sources, perhaps he’ll believe his own government, which agrees that the chicken tax does not apply to Australian vehicles:

        _____________

        Australia-United States Free Trade Agreement: Fact sheets
        Automotive

        Australia and the United States agreed to eliminate customs duties on almost all automotive products from the day the agreement entered into force.

        ****The United States’ 2.5 per cent duty on passenger motor vehicles, the 25 per cent tariff on light commercial vehicles and tariffs on auto parts and accessories exports were immediately eliminated.****

        Australian duties on passenger motor vehicles will be phased, to zero in 2010.

        http://www.dfat.gov.au/fta/ausfta/outcomes/12_automotive.html

    • 0 avatar
      RobertRyan

      This is the Problem and confusion I am referring too in the US.
      “2. Lots of people will buy them, cannibalizing the sales of much more profitable pickup trucks.” They are NOT a replacement for a F150, although they will do a lot of things a F150 can do. They are a “Sports car with a bed” something a F150 will never be.

  • avatar
    jhefner

    Chevy sold something after the El Camino — the SSR. How many have you seen on the road? There’s your answer.

    • 0 avatar
      RobertRyan

      They were not imported into the US, therefore NO Chicken Tax

    • 0 avatar
      Geekcarlover

      Oddly enough, one was next to me on my drive in this morning. Though I think it’s the first one I’ve seen in months.

      • 0 avatar
        Rental Man

        HHR were all sent to rental companies at crazy low prices until they were killed. Same like the PTcruiser on it’s last few years.

        I once met some of the guys that were buying the fleet. They asked me if people like the HHR. I told them they were hated by most people other then those who booked economy sub-compacts and hoped / needed more space. They said GM keeps on pushing them at prices so low they had to take them.

      • 0 avatar
        ajla

        The HHR was a retro I4-powered panel van based on the delta platform.

        The SSR was a retro V8-powered hard-top convertible truck that was based on the GMT360 platform.

      • 0 avatar
        joeaverage

        And the SSR was very expensive new. I have a coworker that uses one for his year-round daily driver. Nice truck.

  • avatar
    icemilkcoffee

    As an aside- the chicken tax is the perfect example of a tariff working, and working very well to keep jobs in america.

    Sure- you can’t buy yourself a Hyundai pickup as a result. Somehow I’m not losing sleep over that loss.

    • 0 avatar
      racer-esq.

      Two pieces of bad news for you:

      1. You are only correct with respect to keeping jobs in America at the continent level. Since NAFTA the Chicken Tax has not applied to Mexico and Canada, and Ford, GM and Chrysler all make pickups in Mexico.

      2. The US has entered into a free trade agreement with Korea and is reducing the Korean light truck tariff to zero over the next ten years.

      Some good news for you:

      If Hyundai ever does make a pickup it will have final assembly in Mexico or the southern US for logistical reasons alone, regardless of the tariff environment. Hyundai is already building cars in the US and that tariff is only 2.5%.

      • 0 avatar
        RobertRyan

        Very much Doubt Hyundai/Kia would build a Pickup of any sort. They are into very light trucks and heavy ones. There has been speculation they would in the US, but that was only US Speculation. It would not be profitable for them to do so now.

        “The US has entered into a free trade agreement with Korea and is reducing the Korean light truck tariff to zero over the next ten years.” You MAY get their very light trucks( A Lightweight version of an Isuzu NPR, but with very Asiatic styling.

      • 0 avatar
        DenverMike

        @Racer-esq. Ram HD pickups are assembled in Mexico and so are GM crewcabs, but all “F-series” are hecho in the U.S.

      • 0 avatar
        joeaverage

        Competition is good for us consumers. Like the rest of the world has. Funny how America, the land of the free is free in so many ways…

        Tariffs just protect jobs short term and then Detroit gets complacent.

        I’d like to choose from many of the import options available to the rest of the world. My needs are modest – four cylinder, light enough to be useful with a four cylinder, four door, manual transmission, maybe 4WD, maybe a VW style turbo diesel. Don’t need an American style freight train sized heavy duty 4WD barge of a truck.

        Currently I do what I need with a 450 lb European trailer and a four cylinder CUV – both available right here in the USA.

  • avatar
    RobertRyan

    “****The United States’ 2.5 per cent duty on passenger motor vehicles, the 25 per cent tariff on light commercial vehicles and tariffs on auto parts and accessories exports were immediately eliminated.”

    Nope incorrect it still applies, from the article that has started this thread:
    “It’s more the chicken tax than exchange rates what derails hopes of U.S. success of the Holden Commodore Ute”

    ““It should be right at home on the roads and farms of the US,” writes the Herald Sun in Australia, “but tariffs and the strong Australian dollar could prevent the Commodore Ute following the sedan as an export.”

    • 0 avatar
      racer-esq.

      If you are going to refute my direct source, the United States International Trade Commission, and Pch101′s direct source, the Australian Government Department of Foreign Affairs and Trade, I recommend a better source than the Melbourne Herald Sun.

      Due to the Free Trade Agreement with Australia there is no US tariff on Australian pickup trucks.

      • 0 avatar
        RobertRyan

        I respectively disagree. That is why the article and Melbourne Herald Sun mentioned it, otherwise it would not be an issue. There is no tariffs on “Motor Vehicles”, but the US I believe is in the process of signing a free trade agreement with Thailand, but will build the Colorado in the US from imported parts.. The Chicken Tax has not been repealed in the US, it still overrides a free trade agreement. Same applied with our Free trade agreement with Thailand, they impose a Luxury SUV Tax on imported vehicles.

      • 0 avatar
        Pch101

        How can you possibly disagree when the US and Australian governments both agree that there is no such tariff?

        Honestly, this is getting to be a bit looney.

    • 0 avatar
      Robert Gordon

      Try this…

      http://www.usitc.gov/publications/docs/tata/hts/bychapter/1210c87.pdf

      The chicken tax does NOT apply to Australian built vehicles.

      The Herald Sun article is unbelievably poorly researched.

      • 0 avatar
        RobertRyan

        I guess Holden or GMNA does not know much about how Tariffs apply in the US? It was not just The Herald Sun who mentioned it.

      • 0 avatar
        Robert Gordon

        Well, they were either mis-quoted or more likely given that one is some Public Affairs bum and the other is a Manufacturing dude they simply were not aware and had some vague notion of tariffs. Had they asked the sales director or the MD for a quote they may have received a more accurate reply.

        Believe me senior management in Holden are not necessarily the gurus you make them out to be given that many have only very recently joined the company.

  • avatar
    vent-L-8

    could you do the final the final assembly in North America to avoid the tax?

    • 0 avatar
      Pch101

      As noted in some of the links above, the article and the Holden spokesman are wrong.

      The US does not apply a tariff on trucks that are made in Australia and imported to the United States. The tax is zero.

      • 0 avatar
        RobertRyan

        No they are not wrong. Holden exports to Europe, the Middle East ,Brazil and New Zealand. So they would be very aware of what tariffs apply.The Article is correct.

      • 0 avatar
        Robert Gordon

        “No they are not wrong. Holden exports to Europe, the Middle East ,Brazil and New Zealand. So they would be very aware of what tariffs apply.The Article is correct.”

        Since when was the Herald Sun an infallible scripture? Yes Holden does exports to those countries, however it is not a logical progression that because that is the case a manager or Public Affairs spokesman not directly related to export legislation or requirements will state the facts correctly.

  • avatar
    RobertRyan

    “How can you possibly disagree when the US and Australian governments both agree that there is no such tariff?

    Honestly, this is getting to be a bit looney.”
    There is still a Chicken Tax, that applies to Pickups. The Ute has been classified by the US as Truck not a car.A Free Trade agreement, contary to the wording does not apply to all goods. US vehicles are no cheaper in Australia because of it, they are the same price or dearer. The Ute should be classified as a car, then it would not have tariffs or a”Chicken Tax applied.

    • 0 avatar
      Pch101

      “There is still a Chicken Tax, that applies to Pickups.”

      One last time: the chicken tax doesn’t apply to Australian-built pickups. You are wrong.

      • 0 avatar
        RobertRyan

        Read the article. They are not “Australian-built pickups”, they are Utes. The article is RIGHT. your OPINION is wrong. I would think an arm of a US Automotive Giant would have more of an idea what tariffs affect them than someone posting on a message board. Unless you know more about the US trade regulations than GM? Throw in the Australian Newspaper as well. I think you do not have a leg to stand on.

      • 0 avatar
        Pch101

        This is unbelievable.

        The US law divides this part of the vehicle universe into two categories: passenger cars and light trucks. What you call a “ute” is dealt with as a light truck.

        The chicken tax is ordinarily applied to light trucks. But the Australian-built vehicles are exempted due to the free trade agreement cut by Howard and Bush Jr.

        This really is the last time that I’m going to correct you. You’ve been provided with the US free trade specifics and a summary by the Australian government. They both agree that the chicken tax doesn’t apply to vehicles built in Australia. If you can’t figure out what either one of those is saying, then that’s your problem.

  • avatar
    RobertRyan

    The US law divides this part of the vehicle universe into two categories: passenger cars and light trucks. What you call a “ute” is dealt with as a light truck.

    The chicken tax is ordinarily applied to light trucks. But the Australian-built vehicles are exempted due to the free trade agreement cut by Howard and Bush Jr. ”
    The Chicken Tax applies to “light trucks” Free Trade or otherwise. If there was NO Problem, the Holden spokesperson would not have said anything. The Paper backs him up.

    If Utes were not “light trucks” but put into the car category, then NO tariffs would apply.

    .

    • 0 avatar
      racer-esq.

      The Chicken Tax is 25%. You will notice a number of vehicles on the list below are by default tariffed at 25%. However, you will notice that every vehicle on this list, including those by default tariffed at 25%, is tariff free with regard to Australia (AU).

      http://hts.usitc.gov/Table%2087.xml

      Utes fall under subheading 8704.31.00. Subheading 8704.31.00 is by default tariffed at 25%. However, like every other vehicle on this list that subheading is tariff free if coming from Australia.

      • 0 avatar
        RobertRyan

        Why the concern by GM Holden? If that was true? Why the Herald Sun article? I think they have access to same documents you do online, but are still concerned about the Chicken Tax. You need someone who is well versed in Commercial Law to EXPLAIN their (Holden’s )concern.

      • 0 avatar
        racer-esq.

        The reason Holden isn’t getting calls from GM North America requesting Utes is, among other things, the strong Australian dollar, which the article mentions. The Holden reps, none of which have legal or accounting positions within the company, are just throwing in the tariff issue, which is no longer relevant.

        With regard to the old tariffs, which no longer apply to Australia, passenger vehicles were tariffed at 2.5%, and light trucks (including the Ute because of the bed) were tariffed at 25% (ten times higher). But in the Herald Sun article Holden’s SA corporate affairs manager, Sean Poppitt, says:

        “The tariff triples when you go from Commodore to Ute. It’s under a light commercial heading, so it’s a 35 per cent tariff,”

        In addition to not understanding that the tariffs are no longer in place, he does not understand the tariffs that used to be in place.

        Holden’s concern is that it is not exporting more cars. One of many reasons is the strong Australian dollar. The Chicken Tax is no longer an issue because it is no longer in place with regard to Australia.

      • 0 avatar
        Pch101

        “Why the concern by GM Holden?”

        As I explained above, they want to be able to blame us (and not that themselves or their cars) for their future redundancies (layoffs).

  • avatar
    RobertRyan

    “Last I heard, the sports-car w/a bed niche was exceedingly small”
    Makes sense as there has been no market for theses vehicles. European HDT trucks would have the same category.

  • avatar
    ranwhenparked

    Can we just get that damn thing repealed already? This is just getting ridiculous.

    I hate to bring it up again, because of the potential for opening up a can of worms, but the US government does still own like 26% of GM – can’t someone in the company just call someone in Washington? The argument would probably sound a lot more forceful coming from one their major investment holdings rather than a bunch of random car enthusiasts.

    Also, while they’re at it, they can put in a plug to lower the age exemption for private vehicle imports to 14 years instead of 25. That would be nice too.

    • 0 avatar
      racer-esq.

      It has been repealed with regard to Australia, but the Australian dollar is just too high for that to matter. The key for pickup fans would be to repeal it with regard to Thailand. Many of the compact pickups that the internet wants very badly are made in Thailand, and Thailand has cheap labor, so exporting from it would make sense. Because of Thailand’s cheap labor I am skeptical of a Chicken Tax repeal being worked into any trade agreements with it.

      Definitely would like to see a 15 year import exemption like the Canadians have.

      • 0 avatar
        Sam P

        I’d be all for the 15 year import exemption. I wouldn’t mind rolling around in a 4wd turbodiesel 1997 Mitsubishi Delica van. Those things are incredibly freaking cool – see Jack’s Genesis vs FR-S vs Miata video.

    • 0 avatar
      RobertRyan

      General tariffs on Automotive products including parts, yes. Built up vehicles like Pickups and Utes no. Cars yes they are exempt. A Free Trade Agreement CAN have exceptions on certain products. Trucks(of any sort) and Military arms definitely have restrictions.

  • avatar
    ajla

    As others have pointed out, the “Chicken Tax” does not apply to the Holden Ute.

    This was covered when the G8 ST was introduced and made the auto show rounds. Lutz himself stated that GM would not have created the G8 ST if the “Chicken Tax” were applicable. Most of the buff books made mention of this when writing about the ST.

    I don’t know why the Holden guys seem to have forgotten this so soon or why the Herald Sun didn’t do any further searching into the matter.

    • 0 avatar
      tresmonos

      Protectionism spewage combined with saber rattling non-sense. That is why.

      The Falcon and it’s content isn’t feasible on a global or local scale. It’s an old platform while newer, global platforms can and will accommodate it’s local populations’ tastes. If the platform sells and is profitable in it’s own regions (i.e. Mustang and F-150), they can perpetuate a regional specific platform/program. If it isn’t successful in it’s own local market, it goes the way of the do-do bird. Australia, welcome to the party. Globalization is a bitch.

      What we’re witnessing is someone who is afraid of losing their job. They have all the reason in the world to be.

      • 0 avatar
        el scotto

        +1 Newspapers are in the business, don’t be shocked, of selling newspapers. Thanks for you normal shot of advice and common sense

      • 0 avatar
        RobertRyan

        It was feasible, but Ford NA unlike GM,did not proceed in giving the go ahead for overseas exports. They just recently decided to export the Territory to Thailand as part of the ‘Thai/Australia” Free Trade agreement. I say that tongue in cheek as the Thai’s impose a luxury Tax on SUV’s not built in Thailand.

    • 0 avatar
      RobertRyan

      Lutz got it wrong. Strangely the ST was never produced, even after all the auto show rounds.

  • avatar
    solracer

    Maybe Chevrolet could put in backwards-facing seats and belts in the bed ala the original Subaru BRAT? They could even take the seats and belts out when it gets here just like Ford does with the Transit Connect so to not have to worry about lawsuits from stupid unbelted passengers in the bed.

  • avatar
    Rental Man

    @PCH101
    No chicken Tax. Got it. Wow. If only everyone could see your point.

    Another Australian classic UTE version was the Sandman / Panel van. The UTE with an enclosed Cargo area good for…. A bed?

    The classics look great. mysandman.com.au new
    The new ones are just an add on Tonneau called Panelvan Canopies.
    Not sure if a wagon turned into a pickup turned into a panelvan would qualify as a van anyway.

    Holden also had their own HSV Avalanche XUV crew cabs that remind me of a Subaru Baja done right with a big bed.

  • avatar
    el scotto

    .gov and au.gov websites are accepted as authoritative sources. Heathen American here, I just do my surfing in English. Newspapers exist to sell classified ads, ads, e subscriptions, report on sports, and cheer on/snark about the local populace; not an authoritative source. I’m tired of the foolishness of single source, non-authoritative research. Time to go to The Sun’s website and check out the Page 3 Girl.

  • avatar
    Robert Gordon

    I guess it is time to do a post mortem.

    What does it say about the quality of Journalism from the Herald-Sun?

    Assuming they were quoted correctly, what does it say about the competence of Holden executives who demonstrate ignorance of a fundemental piece of trade legislation whilst simulataneously being tasked with developing new export markets for their product?

    Lastly why is it left up to the posters on this forum to do the research? Is this to become a ‘Cut, paste – please comment’ sort of a show?

  • avatar
    el scotto

    Arguing facts does not make you look like a smart person. The paper needed to sell papers. Poppitt has some unannounced agenda. ‘Nuff said.

    • 0 avatar
      Robert Gordon

      Pointing out that a paper has misrepresented facts is in fact a very smart thing to do. I do not believe Poppitt has any agenda at all, it is more likely he has not researched the subject matter.

      The standard of editing is atrocious but is symptomatic of on-line publishing.

  • avatar
    RobertRyan

    Believe me senior management in Holden are not necessarily the gurus you make them out to be given that many have only very recently joined the company.”

    Most people in Australia know we have a Free Trade Agreement with the US. For two organizations to say otherwise , means there is more to the “free trade ” agreement than is being disclosed.

    • 0 avatar
      Robert Gordon

      Two organisations? What, some Public affairs finger-clicker and a motoring journo from adelaide both shooting from the hip?

      Do you really think they boned over the intricacies of the FTA before commenting?

      • 0 avatar
        RobertRyan

        PA has do go through Corporate approval before a release.

        “Well I could say anything and you wouldn’t know any different so the question is somewhat pointless.”

        True. Why say you knew more in the first place?

      • 0 avatar
        Robert Gordon

        “True. Why say you knew more in the first place?”

        In response to a thinly veiled ad hominem.

        “PA has do go through Corporate approval before a release.”

        If it is a press release, yes that is true – this however is a one on one interview or more likely as a result of this Journo having a matey lunch with two Holden Blokes at a Glenelg restaurant and quoting off the cuff remarks.

        Don’t forget this is an Adelaide piece,with an Adelaide journo and interviewing an Elizabeth based Manufacturing bloke and his poodle. Holden Sales and the MD operate out of Melbourne

  • avatar
    RobertRyan

    “To whom are you refering? I think I am reasonably well qualified to comment on the inner workings of Holden.”
    How? Your experience Job

  • avatar
    RobertRyan

    “Trucks including utes are exempt.” That is what the point of contention is.

    • 0 avatar
      Robert Gordon

      No, it is clearly stated in the tables of application.

      http://www.usitc.gov/publications/docs/tata/hts/bychapter/1210c87.pdf

      Look at page 11 reference number 8704.31.00. Then look at column 6 and you will see a ‘Free’ followed by a bunch of codes in brackets. the code ‘AU’ refers to Australia and denotes that they are tariff free.

      It is difficult to spell it out more clearly than this.

  • avatar
    ajla

    Here is another blow to Holden’s claim from what looks to be an official website of the Australian government:

    http://www.dfat.gov.au/fta/ausfta/outcomes/01_overview.html

    The third bullet point on the page under “for our manufacturers” specifically makes mention of utes and the removal of the tariffs.

    “The 25 percent tariff on light commercial vehicles that previously kept Australian utes out of the US market was removed immediately.”

    I’ve found mentions of utes being exempt from the “Chicken Tax” from Bob Lutz quotes, from US automotive websites, from the website of the Canberra Times, from a website of the Australian government, from a website of the US government, and from the Australian correspondent on GMI.

    The only place that I can find that makes mention of the ute being subject to the light truck tariff are webites like those of the Herald Sun that are repeating the recent words of Holden’s Sean Poppitt.

  • avatar
    wmba

    Interesting thread that just goes to show that company officials can be just as wrong as the typical man on the street repeating old wives’ tales. Bad Holden.

    Also, I think, bad Tesla in a very similar way.

    “Pricing in foreign markets can be very complex, so we have taken a very straightforward, transparent approach to pricing Model S,” said George Blankenship, vice president worldwide sales and ownership experience. “Canadian base prices start with U.S. pricing, plus 6.1 percent for import duties and an additional 1.5 to 2 percent, depending upon the model, for incremental transportation costs and country specific business expenses.”

    Under NAFTA, and with vehicle VINs starting with 1, 3, 4 or 5, which means the US and Mexico, there is zero duty payable upon importation to Canada. As you would expect.

    The Tesla is being made at the former NUMMI plant in California. Why does Tesla think that a 6.1% import duty rate applies? That is the rate for Japanese and other countries vehicle imports to Canada, and is the only difference in pricing between the US and Canada for the Scion FRS, for example.

    For Tesla to get their duty rates incorrect for sales to the country nexr door, and apparently to be ignorant of NAFTA is pretty poor. Unless the vehicles are not given a US VIN, for some arcane reason.

    I tried to find an email address for Tesla Canada to inform them of the error which amounts to thousands per vehicle, but no luck. The site is riddled with BUY buttons instead.

    How do these companies manage to hire such incompetents?

  • avatar
    GoesLikeStink

    So no El Camino SS?

  • avatar
    RobertRyan

    There appears there is a Tariff and it applies because of the Asian sourced parts in the Ute.
    “2. Originating Goods (Article 5.1)

    Originating goods are those that:

    are wholly obtained or produced entirely in the country, such as minerals extracted there, vegetable goods harvested there, and live animals born and raised there;
    are produced in the country wholly from originating materials; or
    are produced in the country partly from non-originating materials. In this case, the non-originating materials must meet the requirements of the origin rules in the Annex 4-A (Textiles – see Chapter 4) and Annex 5-A (Goods other than Textiles). These Annexes contain the product-specific changes in tariff classification that non-originating materials must undergo for the finished goods to qualify as originating. The goods must also satisfy all other applicable requirements.
    3. Change in Tariff Classification Approach to ROOs”

    Commodore Ute popularity:
    “The Ute is still selling consistently. It is always one of the models Holden dealers can’t keep on lots – and more than half are V8s. They are not counted in Commodore sedan sales but consistently amount to 25-30% local production in addition to sedans and wagons. The Maloo Ute is just over 50% of HSV’s business. In both cases it’s because it’s the cheapest way into a V8 Holden. “

    • 0 avatar
      Robert Gordon

      Well the local content point (and it is calcualted by the manufacturer) is 50% for full tariff removal. Commodore sedan currently rates at 60%. However, a number of the major components such as the V8 engine and the 6L80E transmission are made in the USA which is removed from the calculation since that is in the FTA region. The Ute which is our subject matter has an even more favourable local content rating given that the drivetrain forms a greater proportion of the vehicle value (ie drivetrain is the same as sedan, but there is less other body stuff).

      Regardless, even if I were to on-sell a full imported ute from Thailand to the USA it would still only be taxed at 25% not the 35% or 40% figures that seem to have been pulled out of the bum of the journo and Holden dudes.


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