By on February 10, 2014

Toyota Landcruiser 70 Troop Carrier Workmate

Toyota announced Monday that as of 2017, the automaker will no longer manufacture any of their vehicles in Australia, driving in the final nail to the coffin containing the nation’s local automotive industry following similar announcements by Holden and Ford.

Toyota Australia head Max Yasuda and Toyota Motor Corporation head Akio Toyoda made the announcement at the automaker’s factory in Altona — a suburb of Melbourne — before an audience comprised of various media and the factory’s 4,200 employees. Yasuda claimed numerous factors in the decision, citing high costs of manufacturing, low economies of scale, increased competitiveness surrounding current and future free trade agreements, and the “unfavourable” Australian dollar as among the many reasons for the closures.

“We did everything that we could to transform our business, but the reality is that there are too many factors beyond our control that make it unviable to build cars in Australia,” Yasuda said. “Although the company has made profits in the past, our manufacturing operations have continued to be loss making despite our best efforts.”

The Australian Manufacturing Workers Union warned that Toyota’s complete exit from the nation’s manufacturing base would devastate not only those directly affected, but up and down the supply chain, as well. AMWU vehicle secretary Dave Smith added that the final result would be “a potential recession all along the south-eastern seaboard.” The Australian Council of Trade Unions also warned that the pullout would ultimately cost 50,000 jobs and erase $18.76 billion from the local economy.

On the government side, Industry Minister Ian Macfarlane said he was disappointed in the decision, and felt that the government would have been able to help had there been enough time to put a plan in place to keep Toyota manufacturing in Australia. Victoria Premier Denis Napthine concurred with Macfarlane’s sentiment and desire to have been able to work through the issue, and would be seeking a commitment from Australia’s coalition government — currently led by Prime Minister Tony Abbott — for a comprehensive adjustment package similar to the one made to Holden employees late last year.

On the subject of government subsidies, Abbott said his government had wanted Toyota to soldier onward, going as far to hold private talks with Yasuda as recently as hours before the announcement of the manufacturing pullout — contradicting what Abbott said in an earlier press conference regarding knowledge of the announcement — though as with Holden prior to its decision, paying the automaker any extra taxpayer dollars was ruled out.

Abbott said that while nothing could be said or done to “limit the devastation that so many people will feel” from the fallout of Toyota’s decision, he wanted everyone to remember that “while some businesses close, other businesses open, while some jobs end, other jobs start,” and that there would be “better days in the future.”

Opposition Leader Bill Shorten, proclaiming the Toyota closure an “unmitigated disaster,” offered this statement on the matter:

The car industry has died under the Abbott government — it’s a disgrace.

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100 Comments on “Toyota Shuttering Australian Factory By 2017, Local Industry Dead...”


  • avatar
    Otterpops

    Max status: MAD.

  • avatar
    CoreyDL

    Well, this was really inevitable with their currency values, and the fact that there AREN’T enough people in AUS to warrant individual models and home manufacturing.

    Also, does anyone know why they use kilowatts as their units for horsepower? I watched Australian Top Gear and it really threw me off (in addition to the terrible hosts).

    • 0 avatar
      Onus

      That is the SI unit for power. Australia converted in the 1970’s so they aren’t stuck on old metric or sorta but not really metric units like horsepower.

      They use it in the EU as well (its required horsepower can be stated as an additional unit).

      That is DIN hp which was used in many countries and originates in Germany. But kilowatt is what everyone SHOULD use ( i wish the us would convert to metric ).

      It’s like asking why do they rate torque in Nm. Same thing really.

      Multiply by 1.34 to get horsepower.

      • 0 avatar
        86er

        My understanding is that the United States is officially metric, but the residents of the United States do not care.

        • 0 avatar
          Felis Concolor

          The United States has officially recognized the metric system for a century and a half, which is why I point and laugh whenever someone erroneously posts, “the U.S. is one of a handful of nations which has not adopted the metric system, alongside these half dozen minor dictatorships.”

          A simple examination of any grocery store shelf will refute all claims this country has not gone metric.

        • 0 avatar
          tekdemon

          I refuse to give up the horsepower, I mean how else will I compare the power of a motor to my mule?! Is it equal to 100 of my mules? 150? HOW WILL I KNOW WHAT A KILOWATT IS??!

      • 0 avatar
        CoreyDL

        Thanks, interesting.

        The US will never convert, we love our gallons and ounces and whatnot.

        • 0 avatar
          davefromcalgary

          Canada is a freaking mess. Officially were metric, but ask anyone born in Canada how tall they are and how much they weigh.

          Contractors will give up feet and inches over their cold dead bodies, because a 2×4 is much easier to say then a 38×89. Also, framing materials, (studs and sheathing) are designed to work on increments of 1/2 a foot generally. The system is entrenched and metric doesn’t line up as nice.

          But, as a structural engineer, doing design in imperial can kiss my ass. The conversion factors even between different imperial units are ridiculous, ie psi to psf. Metric, its all orders of magnitude of 10, which makes sense and is far easier to work with.

          So yeah, Canada is far LESS metric I would say than people might think, despite what is or isn’t “officially”.

          • 0 avatar
            86er

            Canada had the metric system imposed on them in 1977 in a way that wouldn’t have been possible in the States.

          • 0 avatar
            RobertRyan

            Same as in Australia. We have people measured in feet an inches as well as Millimetres.

          • 0 avatar
            Onus

            @86er

            The us can be forced on metric. The constitution gives congress to set weights and measures. The issue is they have NEVER used that ability. If they wanted to they can force people to do so.

            We were quite on track until Ronald Regan botched the metric conversion act. Thats the main reason Canada converted. Road signs were supposed to be converted in 1992.

            Honestly do what Australia did they converted everything no voluntary conversion crap. Seems to work fine. Other than peoples height i don’t believe anyone uses imperial anymore.

  • avatar
    azmtbkr81

    Hopefully this won’t mean the end of the 70 series Land Cruiser, I’d give my right arm to be able to buy one in the US…wait no I wouldn’t then I couldn’t shift! I’d give my right eye instead.

    • 0 avatar
      gtemnykh

      Right on, the 70 Series Landcruiser is a truly epic SUV of the purest sort. I’m willing to donate a kidney.

      I also want to add just how awesome and purposeful steel wheels are on a no-BS SUV like this. Won’t crack, you can hammer them back into shape in the bush, you can weld them if dire circumstances dictate.

      What sort of diesel do they put on these? Are lockers available for front and rear?

      • 0 avatar
        azmtbkr81

        Just checked the Aussie Toyota site: 4.5L V8 diesel, solid axles, 4×4 only, manual hubs only, manual transmission only, front & rear lockers optional.

        Pure 4×4 bliss.

        • 0 avatar
          gtemnykh

          I just looked at the site as well. Twin 90L (24 gal) fuel tanks and close to 1000 miles of cruising range with the 4.5TD. Wow.

          “Number of cupholders: 1″

          That just says it all :)

          Looks like the “GXL” model has the front and rear lockers fitted as standard.

      • 0 avatar
        Big Al from Oz

        @gtemnykh
        They are a very capable off roaders and probably better than a Jeep in reliabilty and overall off road capability.

        A V8 diesel in a midsize vehicle makes for some awesome low down off road grunt, with good FE.

        Up here in the Outback it’s probably one of the most common vehicles.

        I’m not a Toyota fan, but this is the last of Toyota’s real hard off roaders that’s affordable.

        The Hilux is only living on it’s past reputation, as it’s a very average off road performer.

    • 0 avatar
      philadlj

      They build the 70 in Toyota City, Japan and Cumana, Venezuela, not Australia, so no worries.

      The Altona plant builds Camrys and Aurions, 80% of which are meant for the world market.

    • 0 avatar
      Onus

      You don’t need your right arm to shift the aussie version.

    • 0 avatar
      RobertRyan

      The Landcruiser 70 was not built in Australia, but Japan. They do a lot of testing of Landcruisers, Hiluxes etc in Australia. A Local high tech company developed a suspension system that has been incorporated into the Lanndcruiser 200

  • avatar
    Hummer

    *awaits bafo to come argue*-

    America is doing worse
    It’s because of the chicken tax
    It’s because Toyota hates us (Aussies)
    It’s because our economy is *too* good for these jobs
    It’s America’s fault
    It’s America’s fault for not seeing how midsize pickups are better
    It’s because our economy is unrestricted ( ignoring all the extremist laws for so called luxury tax)
    It’s because I am actually DenverMike in disguise
    It’s America’s fault.

  • avatar
    Ion

    This is going to hurt Australia’s economy alot and probably affect the world’s. Australian’s should be very worried about what other companies invest in or supply their auto industry.

    • 0 avatar
      TW5

      Australia should be fine. The loss of special Australia-only models will be a loss to the world of automobiles, but Australia has recently returned to trade surplus by exporting iron and coal to China. Transferring inefficient labor from automobile manufacturing to iron, coal, and to the new tight-oil discoveries in Coober Pedy will be beneficial for the economy.

      Australian labor may see the loss of the automobile industry as a psychological blow, especially as unemployment rates creep upward, but it shouldn’t be economically troublesome. Australians might get cheaper cars (depending on import taxes) and healthier salaries. Time will tell. Best laid plans do not always materialize.

  • avatar
    ect

    “Opposition Leader Bill Shorten, proclaiming the Toyota closure an “unmitigated disaster,” offered this statement on the matter:

    The car industry has died under the Abbott government — it’s a disgrace.”

    Well, that’s constructive. And his plan would have been…….??

    • 0 avatar
      thornmark

      As you imply, his plan would be to try to defy economic reality with subsidies from taxpayers.

      His Labor party tried that w/ Ford and Holden and they still left. So this time it would be different?

      Sounds like the Australian car industry died under the previous government – his party. Ford and GM cited “high business costs” for their exodus. The current government has been trying to lower business costs.

      • 0 avatar
        Pch101

        Holden didn’t opt to leave until Abbott came to power. It was clear that Holden was waiting for the outcome of the election before making a decision.

        For better or for worse, TMC and Holden would have probably stayed if they were given enough subsidies. But Ford seemed to be intent on leaving, regardless; Aussie Fords don’t fit very well into the One Ford plan.

        • 0 avatar
          RobertRyan

          Wrong the decision by Ford and GM was made well before Abbot was elected. That is why GMNA said it wasits decision and the present Govenments actions. I personally thought the Liberal Government made a huge mistake about not complaining about the shutdown of Holden but the decision was done some time prior in Detroit.

    • 0 avatar
      Lorenzo

      Didn’t this Abbott guy just get elected?

      • 0 avatar
        86er

        He did; Toyota delayed this announcement just to stick it to the new guy…

        Politicians will politic.

        • 0 avatar
          Pch101

          TMC didn’t just “stick it to the new guy,” as you so eloquently put it.

          Read this article. Notice the date: http://www.smh.com.au/federal-politics/political-news/ongoing-financial-support-for-car-industry-not-warranted-productivity-commission-report-20140131-31rq2.html

          • 0 avatar
            RobertRyan

            A report staffed by the current Governments stooges.
            Previously a Report by Car industry and Monash University painted a bleaker picture for the pull out of the car industry. Recommendation that the Industry supply chain take on new industries.

            Here Monash University argues the then subsidies were only amounting to $18 per person in Australia unlike the $256 per person in the US. I agree with this analogy and not Big Als from Oz’s no subsidy argument.
            http://artsonline.monash.edu.au/news-events/is-supporting-the-car-industry-so-expensive-compared-to-our-heavily-subsidised-lives/

          • 0 avatar
            86er

            That was sarcasm, Watson.

          • 0 avatar
            doctor olds

            The total loss on the auto bailouts amounts to a ONE TIME cost of about $50/American. There is no other “subsidy”.

      • 0 avatar
        CoreyDL

        What are the main parties there – Lib Dems and Tories?

      • 0 avatar
        Crosley

        Abbott has been prime Minister for a little over 3 months, so if you’re going to blame a politician, it would have to be blamed on the outgoing Labor Prime Minister and their ridiculous carbon tax.

        • 0 avatar
          charly

          The carbon tax was the only hope to save the Australian car industry

        • 0 avatar
          Pch101

          It isn’t the carbon tax. It’s the fact that they’re about to pull the plug on subsidies. The industry is too small to survive without them.

          • 0 avatar
            charly

            That is not the problem. What is is the value of the AUS$. A carbon tax would stop the export of coal and iron ore, which from an employment view is worthless.

          • 0 avatar
            RobertRyan

            @Pch101,
            So is the US Automobile industry that needs heavy subsidization to keep employment in the US.
            http://www.abc.net.au/worldtoday/content/2013/s3907742.htm
            “Australia, according to the most recent figures, subsidises at about $18 per head in terms of its subsidies to Holden over the last decade – so $18 per head annually. Of course, other countries – China, Japan, South Korea, Germany and France – use enormous numbers of indirect and direct subsidies for their vehicles.”
            There can be tax relief. There can be the use of land. There can be tax holidays. And it can be in terms of, say, R&D concessions and so on. So there are a whole raft of very complex measures that other countries can undertake in order to indirectly subsidise industries.
            “MICHAEL JANDA: Is it true that there are no car producing nations that do not subsidise in any way their automotive industry?

            REMY DAVISON: Yes, that’s absolutely true. In fact there’s a WTO case at the moment between the United States and China where the United States are charging that China is subsidising its industry directly and indirectly to the tune of over a billion dollars a year.

          • 0 avatar
            Big Al from Oz

            @Pch101
            How efficient is the US auto manufacturers?

            They are subsidised to the tune of $3 000per vehicle.

            The Germans can do the same for $1 300 per vehicle.

            Australia was $1 900 per vehicle, even with our tiny market we were still more efficient at making vehicles than the US.

            I would like the US taxpayer to keep on sending Australia Grand Cherokees that you are paying for.

            I might even buy one and get personalised plates stating ‘Thanks Pch101′ for my car.

          • 0 avatar
            Pch101

            The Productivity Commission wants to cut off the funding. The Abbott government will follow that guidance. The timing is not a coincidence.

            There’s no reason for automakers to stay in Australia without subsidies. The only reason to build there in the first place was because of the tariffs.

            But the tariffs are less relevant now that they’re down to 5% (plus the luxury car tax.) The cars can be built elsewhere where there is more scale, and imported.

          • 0 avatar
            RobertRyan

            @Pch101
            “The Productivity Commission wants to cut off the funding. The Abbott government will follow that guidance. The timing is not a coincidence.”

            Not if the Productivity Commission” is staffed by people from your Party and their financial backers.

    • 0 avatar
      RobertRyan

      @ect,
      None. Too blinkered in his thinking. Kim Carr who was the Minister in charge of manufacturing in the previous Labor Government was a very pro-active and was looking at high end manufacturing and other industries suppliers could access. Unfortunately Julia Gillard..Dullard would be a better surname dropped him from her Cabinet.

  • avatar
    tresmonos

    This will be interesting to me so see what impact this leaves. Will there be a large footprint of unemployment left or will we see that most of the supply chain has already left the continent?

    I’m not sure what the ‘domestic’ content is of Australian built vehicles. If it’s similar to ‘American’ automotive OEM brands in the USA, you won’t see 1/3 of the unemployment you would have ten years ago, as the supply chains are roughly 50% imported.

    • 0 avatar
      pacificpom2

      The issue isn’t what the vehicle parts business is going to do, it’s because Australia is now going to lose it last major manufacturing industry. Australia will go back to digging holes in the ground and growing sheep and wheat.

      • 0 avatar
        Lorenzo

        Those holes in the ground produce huge quantities of iron ore and coal. Maybe the government will get out of the way enough to allow investors form a bigger steel industry that can itself support construction steel, railroad cars and rails, and ship building. That’s the way to move past being a primary materials export economy. The oil, natural gas, shale, copper, silver, and gold deposits can also be processed.

        • 0 avatar
          charly

          Dutch disease is what is killing Australia’s workers

          The easiest, most successful way of not becoming a primary material exporter is by not exporting it

          • 0 avatar
            RobertRyan

            @charly,
            We have been suffering from economic “Dutch Elm” disease ,now the Aus Dollar is becoming to stabilize around 84-85c. US Dollar will go up as economic stimulus tapers as a result of reducing the huge US debt.. Then the US will suffer the same thing, a vicious cycle.

        • 0 avatar
          RobertRyan

          Problem is steel can be made cheaper elsewhere.

          • 0 avatar
            doctor olds

            the problem is that EVERYTHING can be made cheaper elsewhere.

          • 0 avatar
            RobertRyan

            “problem that is everything can be made cheaper elsewhere”
            That is correct.. That is why parts makers are looking for cheaper alternatives outside the heavily subsidized Automotive Industries of the US/Canada.(see articles about subsidies elsewhere on TTAC.)

          • 0 avatar
            doctor olds

            Subsidy is a myth perpetrated by those who simply can’t compete in NA, which, btw, is receiving 10’s of $Billions in capital investment for automotive production from manufacturers and suppliers.

            Honda reportedly became a net exporter from the USA, as a matter of actual fact.

            The USA is becoming more desirable as a manufacturing location as Right To Work states allow enterprises to be competitive. Michigan has joined that group and is adding automotive jobs, particularly in the gold collar and white collar segments.

            Of course, historically you are correct.

            Delphi, by far the largest auto supplier in the world at the time of its spin off, was forced to shutter 28 of its 30 UAW plants in America and sold the other two. They remain very large, are profitable with administration and engineering in Michigan, manufacturing worldwide,outside of the USA!

      • 0 avatar
        ghillie

        @pacificpom2

        Your comment is meant to sound superior but it just shows how ignorant you are – mineral extraction and agriculture and not done by the seven dwarves and bo-peep.

        To compete in a global market Australian mining and agriculture has to be sophisticated and smart. I work in an Australian engineering company. Mining involves not only mining engineers but includes geologists, geotechnical engineers, hydrologists and environmental engineers. These are clever people who spend many years developing their skills which are drawn from and exported all over the world.

        There’s nothing to be ashamed of in being internationally competitive in mining and agriculture. They are industries in which Australia has some obvious natural advantages. Advantages which it doesn’t have in motor vehicle manufacturing.

        • 0 avatar
          RobertRyan

          @Ghillie,
          More Advanced Manufacturing needs to be found to compensate for the Research and innovation now had by the Automotive industry. I know mining , geological services etc does employ a lot Scientists and engineers.
          This Australian Company and its data collection is revolutionizing the NFL in the US. They are also applying the technology to Mining.
          http://www.catapultsports.com/

          • 0 avatar
            ghillie

            @RobertRyan

            I’m not saying Australia should aspire to be just miners and farmers – far from it. Our economy needs to be as diversified and innovative as possible.

            What I was objecting to is the (often repeated) characterization of mining and farming as backward, whereas in fact high levels of professional skill and training are important to both industries.

      • 0 avatar
        Big Al from Oz

        @pacific pom
        Maybe you should go back to the UK.

        I’ve been over this many times previously regarding the Australian motor industry. We are just to expensive to manufacture certain products and our vehicle market is too small.

        Leave motor vehicle assembly to the lower wage countries and let us concentrate on what we do best. Always.

        The new Liberal government is going to take business down a better path. That is no more handouts for inefficiency and the Labour oppostition that is back by the Unions will oppose. Why? Unions don;t want to work harder or smarter.

        How does assembly of motor vehicles make a country more modern? You obviously don’t have a clue.

        The 50 000 job losses will not occur as well. The auto suppliers will have to restructure like they already have started doing.

        The people that lose their jobs manufacturing cares can retrain and move onto different careers.

        Life sucks, but it better to re train a person to be productive than to use tax dollars in the form of a social security.

        • 0 avatar
          Onus

          There sure are worst places to lose your job in.

          Like here in the US. I’m sure everyone will be fine in due time.

        • 0 avatar
          RobertRyan

          @Big Al from Oz,
          the UK which is not a low wage country compared to Asia is now booming as regards vehicle production and design.

          • 0 avatar
            Big Al from Oz

            @RobertRyan
            How much subsidisation and freeloading is offered to the manufacturers in the UK?

            I veiw this argument simply. If someone hits their thumb with a two pound hammer are we smarter by hitting our thumbs with a one pound hammer.

          • 0 avatar
            RobertRyan

            @Big Al from Oz,
            Interesting point as excessive regulation and subsidization killed the “Old “British Car industry. The new industry is much more cashed up and high tech.

          • 0 avatar
            Big Al from Oz

            @RobertRyan
            The UK doesn’t have the living standard we do either.

            It comes down to costs. We cost more.

            We needed to manufacture highly value added vehicles, like HSV’s and FPV’s only, not daily drivers.

            Why do you want to produce a daily driver that has the equivalent cost nearly as the production of a BMW in Germany?

            It isn’t viable.

          • 0 avatar
            RobertRyan

            @Big Al from Oz,
            They are manufacturing more high tech niche vehicles in the UK, that is where their success is coming from as well as run of the mill sedans .
            HSV because it is owned by Walkinshaw can be standalone. The problem is when the basis for your vehicles dries up, like the close of Holden.

          • 0 avatar
            Big Al from Oz

            @RobertRyan
            I’m not talking about building a ‘muscle car’, I’m talking about building performance and prestige cars from the ground up.

          • 0 avatar
            RobertRyan

            @Big Al from Oz,
            Problem is virtually every second day someone wheels out a new “Supercar”. It would be better for Walkinshaw to work on project cars in the UK, US , Australia etc and sell them in limited numbers.
            MOTEC is very very successful in motor racing across the Globe.
            http://www.motec.com.au/

            PWR Radiators is almost as successful. One of the chosen Radiators of NASCAR.
            http://www.pwr.com.au/
            Paul Wheel was a V8Supercar driver who developed a radiator for racing. Now used in Indycar, F1, Dirt Track racing, NASCAR and Off Road events, Military

    • 0 avatar
      Athos Nobile

      tresmonos, local content goes from 50-80% depending on the OEM. IIRC Falcon/Territory have the highest.

      Many parts are already being sourced from China.

      We’ll be lucky if we get to ’16, never mind ’17.

      @Lorenzo, the processing industry is leaving too. Smelters and oil refineries are closing shop.

      • 0 avatar
        Pch101

        My understanding is that the Cruze has about 25% local content.

        • 0 avatar
          RobertRyan

          No slightly more than 50% Not that it makes any difference anyway.

        • 0 avatar
          Pch101

          Speaking at this week’s Productivity Commission hearing into the local industry, commissioner Mike Woods asked Mr Devereux whether the company had reduced local content on the Cruze in a bid to cut the $1500 “supplier premium” that GMH pays for buying parts in Australia.

          The $1500 supplier premium is almost half the $3750 extra cost it takes to build the Cruze in Australia versus overseas plants.

          “Commodore is around, in total value, around 50 per cent and ****Cruze is around 25 to 30 per cent,”**** he (Holden chairman and managing director Mike Devereux) said. “Cruze is a global platform and we get a number of parts from all over the GM world for that.”

          http://www.goauto.com.au/mellor/mellor.nsf/story2/BB810B7C5CC70CEACA257C3D00249D62

    • 0 avatar
      RobertRyan

      @tresmonos
      it is an issue that the US faces as well, US companies related to the Automotive industry are still leaving the US. In Australia parts suppliers have been diversifying and doing other things. Others are locked into the Automobile manufacturers and have little room for maneuver.
      The “Imported Supply chain” is a major problem in the US and shows how much manufacturing has moved from the US.Still the Automotive manufacturing sector sector is only concentrated in two States in Australia..

  • avatar
    grinchsmate

    I don’t think this was a surprise to anyone. As soon as Holden pulled the plug Toyota’s announcement was just a matter of time. There was no way Toyota could support a parts industry by itself.

    The bad news is some people lose their jobs, the upside is no more tax money to car makers and the probable scrapping of 5% tariff. In the future the government might even relax import restrictions to benefit from cheap second hand JDM as the productivity commission has recommended.

    • 0 avatar
      charly

      It is useless to have a 5% tariff if you don’t have a car industry. So it will be cut to 0% with the next trade negotiations. But it will be replaced by other much higher taxes so be happy when you can afford a Lupo in 2024. That is the most sold car in first world countries without a car industry

  • avatar
    Bob

    HEY! Where is the Union bashing? An organized plant is closing and nobody is blaming the greedy fat cat union bosses? Come on TTAC, you are better than this.

  • avatar
    Jeff S

    Ok Bob, those greedy fat cat union bosses they caused this and have caused Merica to become weak. There I said it now let’s go back to some more union bashing.

    Seriously this is no surprise and we in the US will see more of this happen as well as corporations seek less expensive labor across the World. Government subsidies do not work in the long run.

    • 0 avatar
      Lorenzo

      Actually with our weak dollar and a buyer’s market for labor at stagnant wages, America is well placed to steal jobs from other countries. It’ll be the taxes and regulations that stop it from happening. I wouldn’t be surprised if the carbon tax and stringent, sometimes unnecessary regulations from the past Labor government are what is driving jobs out of Australia, in addition to high wages and the strong AU dollar.

  • avatar
    Big Al from Oz

    I think Australia’s position is changing for the good of the nation.

    The US/Euro/Japanese can try and protect themselves against more competitive nations and economies. They will lose out and eventually have economies that do indeed have competitive or reduced incomes and standards of living.

    Australia is in the top few nations with economic freedom. It appears we might even become first. I hope so.

    Here is a comment from Prime Minister Abbot at the recent Davos circus.

    “Abbott has declared Australia is “open for business” and this week’s decision adds an important caveat. Australia is only open for one type of business: the profitable kind.

    Economists would approve.”

    Here the link to the article.

    http://www.dailytelegraph.com.au/business/jessica-irvine/tony-abbott-proves-liberal-economic-credentials-with-spc-decision/story-fnj45kvd-1226815605761

    It appears more inefficient industry will be removed from Australia and sent to lower income countries. Maybe the US can export cars to us for their UAW supported $12.00 an hour jobs. Like I stated wages that are becoming competitive with developing industrial economies.

  • avatar
    Joss

    I disagree. Oz will hurt, it’s lost part of the economic diversity.

    • 0 avatar
      RobertRyan

      @Joss,
      Agree as well.Still the US is playing out on a larger scale what is happening here.
      A Current example as of a day ago.Why did GM basically slightly modify a Nissan Van for its new Mini Van, why not design your own? Where is the GM design input, Why basically build a competitors Mini Van?

  • avatar
    Big Al from Oz

    The reality is this.

    Why would a country not want to close down it’s auto industry? Even with an FTA?

    Most major vehicle manufacturing countries spend billions or trillions of taxpayer dollars supporting the vehicle manufacturers.

    If we sell 1.2 million vehicles a year that are subsidised by taxpayers from other countries that amounts to billions of dollars coming into Australia.

    Not only have we saved money by not subsidising, we are also benefiting from these ‘foreign’ taxpayers.

    Really, it could be deemed a win-win for Australia.

    From Australia, thanks to our American, Euro and Asian taxpayers.

    I want your vehicles to become more subsidised!!

    • 0 avatar
      Big Al from Oz

      Oh, that 5% tax is already paid for by foreigner as well ;)

    • 0 avatar
      RobertRyan

      @Big Al from Oz,
      Not many would agree with you. Still I see the US industry which has already gone from the Big Three to Big One and Three quarters.I suspect the prediction that there will be only One Domestic producer in the
      US will come true

      • 0 avatar
        Big Al from Oz

        @RobertRyan
        The auto industry is more of a emotional loss than a real economic loss.

        The reality is we were subsidising each and every vehicle built in Australia by $2 000.

        For every vehicle out of the US we are in fact in front $5 000.

        The US taxpayer has subsidised his money for my car and not an Australian.

        So an average of 250 000 local vehicles not made and an import sold in its place with an average saving of at least $3 500 per vehicle is a lot of cash through the Australian taxpayer not subsidising and the import being subsidised by another country is better for us in the longer term.

        That money will be in the economy and can be better utilised on more profitable ventures and/or reduce the cost of living.

        It’s really a win for us.

  • avatar
    Jeff S

    @Robert Ryan–I agree there will eventually be one remaining domestically based auto maker in the US, Ford. I think GM could eventually become either a Chinese Corporation or acquired by another auto maker. Chrysler is already part of Fiat. I do see more globally designed vehicles. It is sad that Australia is losing domestic vehicle manufacturing along with their uniquely designed vehicles, but I agree with Big Al that to continually subsidize an industry just to keep it is not viable. On a smaller scale many cities subsidize major department stores to stay in downtown areas. Cincinnati has been doing that for years with Macy’s and Saks Fifth Avenue. Saks has decided to pull out of downtown and move to the suburbs by 2016 regardless of what the city offers. Over the long run subsidies will not keep businesses or industries from moving.

    • 0 avatar
      Big Al from Oz

      @Jeff S
      I stated your exact sentiments quite some time ago.

      I remember reading an interesting article about how GM approached Ford at the onset of the GFC asking Ford if they were interested in forming on manufacturing entity.

      Apparently Ford did have some interest, until GM stated they should control the business because they had the larger market share.

      Ford, apparently stated more or less, ‘if you are that big, why do you come to us for help?’ It never occurred.

      I mentioned a while ago about the rationalisation of the auto industry and it eventually becoming a 12 or so manufacturers globally.

      The country I would discount in this is China, as their auto industry is still in it’s infancy.

      I do see Fiat becoming stronger.

  • avatar
    Big Al from Oz

    @RobertRyan
    I wonder if we will end up with these ;)

    These will offer better job opportunities than working on a Camry. I know.

    We don’t need an auto industry for this stuff. Who will work with the composites? Australia is a world leader in composite technology.

    http://www.abc.net.au/news/2014-02-06/taranis-drone-uk-mod-bae-systems-woomera-south-australia/5242636

    • 0 avatar
      RobertRyan

      @Big Al from Oz,
      There are a staggering number of start ups doing very interesting things not just with Composites. 90% of Australia’s manufacturing has nothing to do with Automakers.There is about 1500 of these startups. One is manufacturing the “skin”for the V22 Raptor Fighter.
      Some smaller ones:
      http://en.wikipedia.org/wiki/Ceramic_Fuel_Cells
      http://www.amtil.com.au/News/AMTIL/Archer-completes-major-Japan-installation#.Uvr5tM5h1nU

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


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