I used to work at Toyota in Australia, which also shut down recently. A lot of people here are saying this is about quality, but it's really about profitability.
Australia's economy is heavily dependent on mining, and China's economic growth created a local mining boom. This resulted in heavy demand for Australian dollars, and at its peak in 2013 1 AUD was worth about 1.05 USD.
It was at this time that Ford (the weakest of the three Australian manufacturers) made the decision to close its Australian manufacturing operations. The high value of the local currency meant the factory was unprofitable and uncompetitive with other factories around the world.
The conservative government at the time, led by Tony Abbott, refused to provide subsidies to help close the gap (even temporarily).
Toyota and GM Holden had similar problems, and all knew that the local automotive parts suppliers needed at least three companies to sell to. So once Ford was out, the supply chain for parts became unsustainable, and the others quickly announced that they would pull out too. It takes time to close an entire industry, which is why all three companies closed their factories in 2017.
Around 2015 the slowdown in China's growth led to a slowdown in Australia's mining industry, and a drop in the AUD. It dropped to around 0.80 USD, and interestingly, Australia's car manufacturers became quite profitable again. But the wheels were already in motion and the decisions couldn't be reversed.
Australia's mining industry has bought in a lot of money, but its impact on the dollar has done a lot of damage to the country's export economy. There's a term that economists use to describe this: Dutch disease. Australia has a bad case of it.
That allowed big multinational banks to borrow massive amounts of money in one country at a near zero interest rate and park that cash in Australia to get a guaranteed 4% return on those billions. That create the high demand for the AUD which drove up it's price.
The RBA was asleep at the wheel as it should have driven down that cash rate much faster and far sooner than it did.
Only after they finally moved and started cutting the interest rate did the dollar fall to the levels we see today.
Unfortunately, they now find themselves in a bit of a mess, since the economy really needs another rate cut to help repair the damage caused by that high dollar.
However they can't do that because it would add fuel to an already over heated property market, which is starting to look a lot like a bubble.
If they had moved earlier, the local manufacturing/export/tourist industries would be much stronger today and the RBA would in fact now be in a position to raise rates, something that is desperately need to take heat out of the property bubble.
The posts about low quality are just continuing stereotypes, and the data shows the opposite. Look at the ratings for any Australian built cars that were exported or sold in Australia, and they do really well.
The thing about long supply routes is wrong too. Mass freight is just so cheap that location doesn't matter.
The exchange rate killed the industry. $A1 bought $US0.5 in 2000, and $1.05 in 2013. Hard to export competitively when that happens.
OTOH we did avoid mass unemployment during the financial crisis, and the economy even kept growing so I guess that is the upside.
The fact that Australia is doing free trade agreements left right and center with Asia doesn't help either. The Thai trade agreement really worked well for Toyota. Most of the Toyota imports are from Thailand nowadays. Not many of them are imported from Japan.
This is hardly surprising when you know a little local history.
For reference: I grew up in Adelaide, about 15-20 minutes drive (15 km.. erm 9.3 miles for you lot) from the suburb where the Holden factory is located.
I remember as a student/early graduate (so, 2000 - 2003ish) having.. acquaintances who were in their early 20's, bringing home close to $AUD100K/year, for assembling commodores. People who would laugh about how funny it is to let a car leave the production line, with the wrong colour door handle fitted.
Another "acquaintance" took forever to get a resolution because his 2-door ute was delivered to him with a 20cm gap in the carpet on the passenger side. It went through the factory, through QA, through a DEALER and nobody fucking noticed a 20cm gap on the passenger side of the floor.
These were not high quality cars being built by well trained craftsmen. They weren't even average quality cars built by moderately trained craftsmen. They were pieces of shit slapped together by over paid idiots.
And now in the coming decades you get to watch the slow process of people becoming increasingly nostalgic about Holden cars as survivor bias ensures that only the best specimens survive.
"Look at that old Holden! Hasn't needed a repair once in 30 years, not like these shitty foreign imports you get today!".
This is just like the death throes of the Rover MG models in the UK.
In 1999 (or thereabouts) I was sick of being run off the road on my motorbike and decided to buy a car. Being an IT contractor with silly Y2K rates going on, I had plenty of disposable cash.
First dealer was Toyota, Bill Allen's of Cheltenham. The salesman looked at me, decided I didn't have money then completely ignored me. Nice.
Second was an MG garage whos name escapes me. Literally every car was was wrong - either the doors didn't fit, or there was a clunk when they closed, or in one case they didn't bother fitting the rear brake light (internal) correctly and it fell off during the test drive.
I have never seen such a rubbish car in my life, literally each one I saw looked like it had been built on a Friday afternoon. No wonder they went bust.
Another anecdote: My boss at the time was awesome and from Birmingham, right next to the Rover/MG plant. He asked me to do a speech for his wedding anniversary, so I went along to a social club next door to the factory. I noticed there were hardly any of their own cars in the employee car park, it was all Ford, Mazda, etc. This tells its own tale, at a time where 'Buy British and save Rover' was trumpeted everywhere.
Note that it's not just Holden that went under - foreign car companies (Toyota, for example) also have closed their local plants, despite probably very different workplace cultures. It's probably more to do with a small local market, and strong exports of raw materials (and hence a strong currency) making imports more competitive.
The labour unions were unwilling to compromise to stay competitive with international factories.
I was surprised when it was reported that Toyota wanted to reduce the Christmas shutdown period from 21 days to 10 days in line with other international factories and the union rejected this. This was in the context of other car manufacturers shutting down in Australia at the time and they had to know that this attitude was risking Toyota leaving as well, but they just couldn't accept a reduction in any conditions.
How is it that smaller countries like Malaysia and Taiwan can support their own native car industry (while also importing foreign cars) but Australia can't?
Are the tariffs just not as high to effectively subsidize their local car industry?
To add. I think those counties understand that the car industry helps to invigorate many other parts of the economy, so it's sad to see AUS let that go like that.
I studied abroad in Melbourne in 2008 and it's crazy to see this happen. I guess I left a few months before the GM bailouts got started in the United States and the whole recession kicked off after that.
It was really neat to see a uniquely Aussie car culture that felt really vibrant. I loved that El Caminos and Rancheros, long gone in the US, were alive and well as Holden and Ford Falcon Utes. It was neat that Toyota had its own Camry-ish car, called the Aurion, made in Australia. It was neat that Pontiac in the US was getting the Commodore, which was a great-looking car. Even though it was still Ford, GM, and Toyota on some corporate level, they had their own unique thing that I was able to discover while I was there.
Aussie here: Good riddance. This country is at the end of Earth in terms of supply chains and export markets, has a small local market and has extremely high labor costs -- all in all, a terrible place to build the kind of megafactory you need to stay competitive these days. The only reason they managed to survive even this long is massive government subsidies, and I applaud the fact that the government had the guts to finally pull the plug.
All that said, the transition away is going to have a high human cost, particularly in Adelaide which just doesn't have a whole lot else going economically. But my wife used to work for a Ford supplier in Melbourne, and that city has managed to absorb Ford's shutdown a few years ago without too much pain. (Nearby Geelong, though, had both the main factory and a steel mill, and is having a harder time.)
The subsidies were not that huge (at least recently), in the scheme of things. The local manufacturers were basically given a much slower reduction of tariffs than other imports, starting 25-30 years ago. Australia has generally been ahead of the curve in reducing these, relative to most places.
So, without value-add industries, how will the economy of Australia function long-term? As an exporter of raw commodities? That has not worked out well... For pretty much every nation that's tried it.
Yep, this has been a long time coming. I grew up in Adelaide, even in the late '80s the car industry was politically contentious, needing large tariff protection to be competitive with imports. AFAIK the wind-down has been slow and steady with no sudden surprises.
I agree good riddance, but for a different reason. I hope we can start to move towards smart cities, and getting rid of cars. It is ridiculous the reliance on cars that people in cities have.
Interesting detail is that the, for American market created, Chevrolet SS was basically a rebadged Holden Commodore built in Australia. Together with the Dodge Charger, it was the "cheapest bang per buck" performance sedan with a V8. Although the Charger still for sale, the Chevy SS died with the closure of that plant making the 17' model year it's last.
The Aussie economic model - export bulk raw materials to China, buy manufactured products back - is a curious inversion of the old British Empire economy. And it's one that is not even remotely viable over the long term. Countries whose only source of wealth is raw materials get eaten alive by manufacturing economies, then left to rot when the mines are exhausted. There is a ton of historical precedent.
Yeah, but the vast majority of Australia's economy (just like the US and all other developed countries) is services, not resources or manufacturing or farming. We just talk about resources because they're a distinguishing feature.
Mining is only 8.5% of Australia's GDP and 2% of its employment. Sure, it would suck for a few years if the whole sector vanished overnight, but it wouldn't cause long-term devastation.
The sheer scale of Australia means that they're not about to get exhausted anytime soon though. Only something on the order of 1% of the continent has even been prospected yet.
I don't think it's an inversion. The British Empire got materials from far off places like australia in exchange for manufactured goods, made in the centres of civilization where all the people are. You don't see Norway making stuff, you need more people (or less minerals) for that.
Curious what you mean by eaten alive. Historically manufacturing was a sign of power and prestige, but now it's been commoditized in favor of financial markets and real estate, which is going fine in Oz. Countries that make things sell them for pieces of paper (or electronic bits) that aren't backed by anything except their and their countries marketability.
The next wave of AI-driven manufacturing will decentralize things and you may well see this plant re-opened, albeit without people.
Holden - better known as GMH or GM Holden - where the GM stands for General Motors, a famous US-based company that bought Holden in the 1930's.
The other 'famously Australian' car manufacturer is Ford. Indeed.
The kinds of (Australian) people that find cars interesting tend to polarise between these two manufacturers, adopting the beliefs that it's patriotic, and that it can be economic to produce (in most cases components were built overseas but assembled within AU) cars in Australia. A country with breathtakingly high labour costs, small population, and low population density. Specifically a relatively small market, container shipping costs flatten out across the country.
That the designs of allegedly Australian cars, even recently, have focused on ICE sedans hasn't helped, though that presumably ties in with the nostalgia aspect for potential consumers of those types of vehicles.
The Monthly published[1] an exquisitely written article middle of last year, describing the history of the Australian car industry, and the self-sabotage exhibited. It's a depressingly sober read.
I was reading a piece lamenting that Australia was leaving a club of only "8 other nations" where a car could go all the way from conception to mass manufacture. I will track the source down precisely if anyone expresses interest. So I started mentally listing the 8 countries: US, Japan, Germany, South Korea, China, UK, France, Italy. But surely also Sweden? India? Brazil? Spain? Eight seems low to me.
We asssule that protectionism is bad because the consumer has to pay a higher price when those goods are not optimally produced. The irony is that less local consumption = less local labor, reducing competition for labor and pushing down pricing power. But the second aspect of this that doesn’t often get talked about is quality. If making a 65” TV in the US is going to cost twice as much as when it’s made in China then I as the consumer will just by a cheaper TV — probably spending the same amount of money I would have. We can often buy cheaper substitutes with the same functional properties.
This is a tough issue for me because I consider myself a liberal, and in theory I am OK with globalization but it obviously has negatively impacted many economies in similar ways.
I want to be pro-globalization but to me you really only have two (vastly simplified) options:
1. Be more isolationist or micromanage global trade to maintain your own industries even though they can't compete globally.
2. Find a way to make globalization benefit everyone, not just the owners of companies who can cut costs and increase profits. This most likely means some kind of universal income and large education investment and vocational training built on top of the profits of globalization.
We appear to be moving towards #1 and I'm afraid we'll all suffer as a result.
My biggest issue with globalization is that, while it makes sense in theory, in practice most of the "efficiencies" come from dirt cheap labor due to exchange rates, poor workers rights and working conditions, and lack of environmental regulations (among others). Not because other countries have developed better ways to make things better or faster, they can just abuse their workers in a way they can't here. You would think we would all benefit in some ways even if we're just consumers by cheaper goods, but are they really cheaper or cheap enough to offset the reduction in good jobs? Does anyone know of some good data-sources for the prices of consumer goods vs household income over time? My guess is our purchasing power has gone down in general for the middle-class.
I can see honestly how this issue has given rise to nationalism in America, I somehow hoped that people would see that isolationism is not the answer and we instead need to rethink our economic model. Somehow Americans have been sold (among many other things) that something like universal income is a handout. I'm afraid we'll take the route that the UK is moving towards of being poorer overall and reducing globalization out of spite without it actually benefiting us.
I feel like as a liberal in America I live in a game of political jenga. Want to stop abortions? We can only do it in a way that doesn't involve decent sex ed or contraceptives (which leads to personal responsibility). Want to prevent gun massacres? We can only do it in a way that doesn't restrict access to guns at all and doesn't cost any money (which leads to more personal responsibility). Want to help out those impacted by globalization or those who have never been on sound economic footing? We can only do that in ways that don't involve wealth redistribution (which pretty much means personal responsibility of people to despite the fact that that already happens in many ways (so we're left with more personal responsibility and people like Shannon are responsible for a late-in-life pivot to a new job with anemic vocational assistance).
A lot of the people that have been hurt by globalization are the same people that support the party in our system that has taken most of the solutions to our problems totally of the table. We're in a straightjacket and could get out any of 10 ways but those would involve tools, all of which are (claimed to be) morally/philosophically unacceptable.
I know this was a rant but its been stewing since I read the first NYT article and this one just compounds it.
Don't take this the wrong way, but I think a more accurate description of your politics might be something like "an economic nationalist" instead of a liberal.
By any global metric you look at globalization is doing amazingly. "A U.N. goal to halve the poverty rate in the developing world between 1990 and 2015 was nearly achieved twice over."[1].
The whole process of relaxing limitations on trade has been a huge boost for developing countries who are currently on a runaway growth trajectory. E.g. look at the GDP growth graphs for the developed v.s. developing world in this[2] article.
Yes we could do better, but it's already great. Yes as some jobs move to developing countries people in developed countries are temporarily displaced, but there's no suggestion that we can't continually recover from that situation.
After all our societies aren't overflowing with jobless ex-steelworkers, ex-textile workers or any other industry you might want to name which has predominantly moved abroad.
Instead we continue to lead the charge in economic development, but because of globalization we're increasingly dragging the rest of the world with us.
Globalization is definitely a challenge but #1 isn't a long term solution either. Even in the US, companies moved from Detroit to Kentucky just for cheaper labor. The other point is that these jobs would have been automated even quicker if it were not for globalization. Look at how much automated welding happens on these assembly lines even 10 or 20 years ago.
I agree we don't yet have a good plan on how to give people access good jobs globally. I think it is just going to be a challenge until we can get automation to a really high level and power costs super low with solar so things don't really cost. Then UBI and service jobs (if you want them) might work. Very interesting to contemplate though..
It's a class thing. Working class people say why can't my government protect my and my friends and my town's livelihoods? Middle class people say, why can't my government make my disposable consumer tat cheaper? That's why we have revolutions.
Globalisation is not OK because arbitrage of cost of living, regulations, etc. The solution is tarriffs to even it out. Want to ship the factory overseas? OK, but there will be no financial advantage in it because the profits will be taxed away and the price will end up the same anyway. That's fair.
1. Australian federal and state government spent billions to save the car industry. AUD$2.7 billion tax payer's hard earned $ was spent between 2001-2013.
2. Unions asked for huge pay rises every single year. For example, in 2011, they forced car manufacturers to provide 18.3% pay rise in 3 years, that is 6% a year non-stop for 3 years.
3. Car makers were forced to continue to provide pay rises when they were weighting the decision whether to shut down their production in Australia.
Take a look at the following The Australian article, you'd probably feel happy that you don't have such unions screwing local economy in your country.
Australian is an unique country, a ticket inspector makes $100k AUD a year ($80K USD) from his/her unskilled job. With such background in mind, it is not hard to imagine how much you need to pay those workers to build cars.
Holden (GM) killed themself by building cars no one wanted anymore as the Australian iconic car has 6-cylinder engines and some maybe 8 cylinder.
Australian government couldn't subsidise cars that where losing sales year on year to smaller cheaper to run cars.
GM just wanted the handouts to keep it running when that dry up they pull the pin
John Cadogan is a bloke that called the end of the Australian Car Manufacturing many years ago and has a great video on why it died here.
https://www.youtube.com/watch?v=_uFYW5tMoeg
Just remember that at its height, Australia had at least 5 car manufacturer. We had Nissan, Chrysler, Mitsubishi, Ford, Toyota and Ford. Now we have nothing.
I was with a Tier 1 supplier in Australia before transferring to Germany, the market place is so different. Looking back, it's a wonder that it actually lasted this long.
What is fun is how if there is an oversupply of say lithium, the demand for electric cars can restore demand. If the dollar collapses though for example, it will take until car loans are restored before there are any demand.
The Chevy SS is a great car for the price, but most people in the US would mistake it for an Impala. In California I think the reputation of a car is more important than the actual performance.
Which is logical, because traffic here is so bad that regardless of how powerful your car is you can't drive any faster than the jerk hogging the road in front of you. So why pay more for a Chevy SS?
They were just seriously bad cars with a poor reputation and worse resale value.
It got to the stage where when buying cars, people I knew would check the VINs to ensure that they were not made in Australia.
Fords made in Australia were particularly bad. Toyotas made in Australia were not up to the standards of the Japanese built Toyotas, but were far better than the pieces of rubbish turned out by the Australian subsidaries of American firms.
Driving one of the US branded cars, was like having a big sign saying " I am a bogan"
[+] [-] quicklime|8 years ago|reply
Australia's economy is heavily dependent on mining, and China's economic growth created a local mining boom. This resulted in heavy demand for Australian dollars, and at its peak in 2013 1 AUD was worth about 1.05 USD.
It was at this time that Ford (the weakest of the three Australian manufacturers) made the decision to close its Australian manufacturing operations. The high value of the local currency meant the factory was unprofitable and uncompetitive with other factories around the world.
The conservative government at the time, led by Tony Abbott, refused to provide subsidies to help close the gap (even temporarily).
Toyota and GM Holden had similar problems, and all knew that the local automotive parts suppliers needed at least three companies to sell to. So once Ford was out, the supply chain for parts became unsustainable, and the others quickly announced that they would pull out too. It takes time to close an entire industry, which is why all three companies closed their factories in 2017.
Around 2015 the slowdown in China's growth led to a slowdown in Australia's mining industry, and a drop in the AUD. It dropped to around 0.80 USD, and interestingly, Australia's car manufacturers became quite profitable again. But the wheels were already in motion and the decisions couldn't be reversed.
Australia's mining industry has bought in a lot of money, but its impact on the dollar has done a lot of damage to the country's export economy. There's a term that economists use to describe this: Dutch disease. Australia has a bad case of it.
Edit: s/80 USD/0.80 USD/
[+] [-] jussij|8 years ago|reply
One of the main reasons the AUD remained at such high levels was because of the carry trade.
http://www.abc.net.au/news/2011-05-09/carrying-the-australia...
From the link below you can see the Reserve Bank of Australia kept interest rates very high during that period:
http://www.rba.gov.au/statistics/cash-rate/
That allowed big multinational banks to borrow massive amounts of money in one country at a near zero interest rate and park that cash in Australia to get a guaranteed 4% return on those billions. That create the high demand for the AUD which drove up it's price.
The RBA was asleep at the wheel as it should have driven down that cash rate much faster and far sooner than it did.
Only after they finally moved and started cutting the interest rate did the dollar fall to the levels we see today.
Unfortunately, they now find themselves in a bit of a mess, since the economy really needs another rate cut to help repair the damage caused by that high dollar.
However they can't do that because it would add fuel to an already over heated property market, which is starting to look a lot like a bubble.
If they had moved earlier, the local manufacturing/export/tourist industries would be much stronger today and the RBA would in fact now be in a position to raise rates, something that is desperately need to take heat out of the property bubble.
[+] [-] nl|8 years ago|reply
The posts about low quality are just continuing stereotypes, and the data shows the opposite. Look at the ratings for any Australian built cars that were exported or sold in Australia, and they do really well.
The thing about long supply routes is wrong too. Mass freight is just so cheap that location doesn't matter.
The exchange rate killed the industry. $A1 bought $US0.5 in 2000, and $1.05 in 2013. Hard to export competitively when that happens.
OTOH we did avoid mass unemployment during the financial crisis, and the economy even kept growing so I guess that is the upside.
[+] [-] emmelaich|8 years ago|reply
It's not as if we didn't try to transition the industry to success. This Button plan was by a Labor government.
https://en.wikipedia.org/wiki/Button_car_plan
[+] [-] obtino|8 years ago|reply
[+] [-] stephenr|8 years ago|reply
For reference: I grew up in Adelaide, about 15-20 minutes drive (15 km.. erm 9.3 miles for you lot) from the suburb where the Holden factory is located.
I remember as a student/early graduate (so, 2000 - 2003ish) having.. acquaintances who were in their early 20's, bringing home close to $AUD100K/year, for assembling commodores. People who would laugh about how funny it is to let a car leave the production line, with the wrong colour door handle fitted.
Another "acquaintance" took forever to get a resolution because his 2-door ute was delivered to him with a 20cm gap in the carpet on the passenger side. It went through the factory, through QA, through a DEALER and nobody fucking noticed a 20cm gap on the passenger side of the floor.
These were not high quality cars being built by well trained craftsmen. They weren't even average quality cars built by moderately trained craftsmen. They were pieces of shit slapped together by over paid idiots.
[+] [-] avar|8 years ago|reply
"Look at that old Holden! Hasn't needed a repair once in 30 years, not like these shitty foreign imports you get today!".
[+] [-] sofaofthedamned|8 years ago|reply
In 1999 (or thereabouts) I was sick of being run off the road on my motorbike and decided to buy a car. Being an IT contractor with silly Y2K rates going on, I had plenty of disposable cash.
First dealer was Toyota, Bill Allen's of Cheltenham. The salesman looked at me, decided I didn't have money then completely ignored me. Nice.
Second was an MG garage whos name escapes me. Literally every car was was wrong - either the doors didn't fit, or there was a clunk when they closed, or in one case they didn't bother fitting the rear brake light (internal) correctly and it fell off during the test drive.
I have never seen such a rubbish car in my life, literally each one I saw looked like it had been built on a Friday afternoon. No wonder they went bust.
Another anecdote: My boss at the time was awesome and from Birmingham, right next to the Rover/MG plant. He asked me to do a speech for his wedding anniversary, so I went along to a social club next door to the factory. I noticed there were hardly any of their own cars in the employee car park, it was all Ford, Mazda, etc. This tells its own tale, at a time where 'Buy British and save Rover' was trumpeted everywhere.
[+] [-] azernik|8 years ago|reply
[+] [-] scriptman|8 years ago|reply
I was surprised when it was reported that Toyota wanted to reduce the Christmas shutdown period from 21 days to 10 days in line with other international factories and the union rejected this. This was in the context of other car manufacturers shutting down in Australia at the time and they had to know that this attitude was risking Toyota leaving as well, but they just couldn't accept a reduction in any conditions.
http://www.theage.com.au/victoria/toyotas-altona-plant-to-st...
[+] [-] mc32|8 years ago|reply
Are the tariffs just not as high to effectively subsidize their local car industry?
To add. I think those counties understand that the car industry helps to invigorate many other parts of the economy, so it's sad to see AUS let that go like that.
[+] [-] tallblondeguy|8 years ago|reply
It was really neat to see a uniquely Aussie car culture that felt really vibrant. I loved that El Caminos and Rancheros, long gone in the US, were alive and well as Holden and Ford Falcon Utes. It was neat that Toyota had its own Camry-ish car, called the Aurion, made in Australia. It was neat that Pontiac in the US was getting the Commodore, which was a great-looking car. Even though it was still Ford, GM, and Toyota on some corporate level, they had their own unique thing that I was able to discover while I was there.
[+] [-] jpatokal|8 years ago|reply
All that said, the transition away is going to have a high human cost, particularly in Adelaide which just doesn't have a whole lot else going economically. But my wife used to work for a Ford supplier in Melbourne, and that city has managed to absorb Ford's shutdown a few years ago without too much pain. (Nearby Geelong, though, had both the main factory and a steel mill, and is having a harder time.)
[+] [-] dalbasal|8 years ago|reply
[+] [-] vkou|8 years ago|reply
[+] [-] corn_dog|8 years ago|reply
[+] [-] megablast|8 years ago|reply
[+] [-] _kyran|8 years ago|reply
Also, just down the road its accompanying power plant/coal mine:
http://www.alcoa.com/australia/en/point-henry/default.asp
[+] [-] tinbad|8 years ago|reply
[+] [-] sp332|8 years ago|reply
[+] [-] gaius|8 years ago|reply
[+] [-] drodgers|8 years ago|reply
Mining is only 8.5% of Australia's GDP and 2% of its employment. Sure, it would suck for a few years if the whole sector vanished overnight, but it wouldn't cause long-term devastation.
[+] [-] jpatokal|8 years ago|reply
[+] [-] dalbasal|8 years ago|reply
[+] [-] andrewjl|8 years ago|reply
The next wave of AI-driven manufacturing will decentralize things and you may well see this plant re-opened, albeit without people.
[+] [-] ajeet_dhaliwal|8 years ago|reply
[+] [-] TheSpiceIsLife|8 years ago|reply
[+] [-] Jedd|8 years ago|reply
The other 'famously Australian' car manufacturer is Ford. Indeed.
The kinds of (Australian) people that find cars interesting tend to polarise between these two manufacturers, adopting the beliefs that it's patriotic, and that it can be economic to produce (in most cases components were built overseas but assembled within AU) cars in Australia. A country with breathtakingly high labour costs, small population, and low population density. Specifically a relatively small market, container shipping costs flatten out across the country.
That the designs of allegedly Australian cars, even recently, have focused on ICE sedans hasn't helped, though that presumably ties in with the nostalgia aspect for potential consumers of those types of vehicles.
The Monthly published[1] an exquisitely written article middle of last year, describing the history of the Australian car industry, and the self-sabotage exhibited. It's a depressingly sober read.
[1] https://www.themonthly.com.au/issue/2016/may/1462024800/rich...
[+] [-] billforsternz|8 years ago|reply
[+] [-] abrowne|8 years ago|reply
- Spain: Is there anything other than SEAT, which is part of VW?
- Brazil: I think they assemble a lot of cars, but I don't think I've heard of a local company, despite there being an Brazilian aircraft maker.
OTOH, Tata Motors Cars would make India count, right?
[+] [-] robocat|8 years ago|reply
[+] [-] rdlecler1|8 years ago|reply
[+] [-] okreallywtf|8 years ago|reply
This is a tough issue for me because I consider myself a liberal, and in theory I am OK with globalization but it obviously has negatively impacted many economies in similar ways.
I want to be pro-globalization but to me you really only have two (vastly simplified) options:
1. Be more isolationist or micromanage global trade to maintain your own industries even though they can't compete globally. 2. Find a way to make globalization benefit everyone, not just the owners of companies who can cut costs and increase profits. This most likely means some kind of universal income and large education investment and vocational training built on top of the profits of globalization.
We appear to be moving towards #1 and I'm afraid we'll all suffer as a result.
My biggest issue with globalization is that, while it makes sense in theory, in practice most of the "efficiencies" come from dirt cheap labor due to exchange rates, poor workers rights and working conditions, and lack of environmental regulations (among others). Not because other countries have developed better ways to make things better or faster, they can just abuse their workers in a way they can't here. You would think we would all benefit in some ways even if we're just consumers by cheaper goods, but are they really cheaper or cheap enough to offset the reduction in good jobs? Does anyone know of some good data-sources for the prices of consumer goods vs household income over time? My guess is our purchasing power has gone down in general for the middle-class.
I can see honestly how this issue has given rise to nationalism in America, I somehow hoped that people would see that isolationism is not the answer and we instead need to rethink our economic model. Somehow Americans have been sold (among many other things) that something like universal income is a handout. I'm afraid we'll take the route that the UK is moving towards of being poorer overall and reducing globalization out of spite without it actually benefiting us.
I feel like as a liberal in America I live in a game of political jenga. Want to stop abortions? We can only do it in a way that doesn't involve decent sex ed or contraceptives (which leads to personal responsibility). Want to prevent gun massacres? We can only do it in a way that doesn't restrict access to guns at all and doesn't cost any money (which leads to more personal responsibility). Want to help out those impacted by globalization or those who have never been on sound economic footing? We can only do that in ways that don't involve wealth redistribution (which pretty much means personal responsibility of people to despite the fact that that already happens in many ways (so we're left with more personal responsibility and people like Shannon are responsible for a late-in-life pivot to a new job with anemic vocational assistance).
A lot of the people that have been hurt by globalization are the same people that support the party in our system that has taken most of the solutions to our problems totally of the table. We're in a straightjacket and could get out any of 10 ways but those would involve tools, all of which are (claimed to be) morally/philosophically unacceptable.
I know this was a rant but its been stewing since I read the first NYT article and this one just compounds it.
[+] [-] avar|8 years ago|reply
By any global metric you look at globalization is doing amazingly. "A U.N. goal to halve the poverty rate in the developing world between 1990 and 2015 was nearly achieved twice over."[1].
The whole process of relaxing limitations on trade has been a huge boost for developing countries who are currently on a runaway growth trajectory. E.g. look at the GDP growth graphs for the developed v.s. developing world in this[2] article.
Yes we could do better, but it's already great. Yes as some jobs move to developing countries people in developed countries are temporarily displaced, but there's no suggestion that we can't continually recover from that situation.
After all our societies aren't overflowing with jobless ex-steelworkers, ex-textile workers or any other industry you might want to name which has predominantly moved abroad.
Instead we continue to lead the charge in economic development, but because of globalization we're increasingly dragging the rest of the world with us.
1. https://www.brookings.edu/blog/up-front/2016/01/20/the-globa...
2. https://oneinabillionblog.com/energy/energy-policy/a-common-...
[+] [-] jopsen|8 years ago|reply
In the US you don't need universal income. Universal healthcare and free education would be massive wealth redistribution programs.
In fact, the ACA (ObamaCare) for all it's flaws still is a wealth redistribution program.
So if you fix your political system, it could happen...
[+] [-] snarf21|8 years ago|reply
I agree we don't yet have a good plan on how to give people access good jobs globally. I think it is just going to be a challenge until we can get automation to a really high level and power costs super low with solar so things don't really cost. Then UBI and service jobs (if you want them) might work. Very interesting to contemplate though..
[+] [-] gaius|8 years ago|reply
Globalisation is not OK because arbitrage of cost of living, regulations, etc. The solution is tarriffs to even it out. Want to ship the factory overseas? OK, but there will be no financial advantage in it because the profits will be taxed away and the price will end up the same anyway. That's fair.
[+] [-] dis-sys|8 years ago|reply
1. Australian federal and state government spent billions to save the car industry. AUD$2.7 billion tax payer's hard earned $ was spent between 2001-2013.
2. Unions asked for huge pay rises every single year. For example, in 2011, they forced car manufacturers to provide 18.3% pay rise in 3 years, that is 6% a year non-stop for 3 years.
3. Car makers were forced to continue to provide pay rises when they were weighting the decision whether to shut down their production in Australia.
Take a look at the following The Australian article, you'd probably feel happy that you don't have such unions screwing local economy in your country.
http://www.theaustralian.com.au/national-affairs/pay-rises-a...
Australian is an unique country, a ticket inspector makes $100k AUD a year ($80K USD) from his/her unskilled job. With such background in mind, it is not hard to imagine how much you need to pay those workers to build cars.
[+] [-] jaimex2|8 years ago|reply
[+] [-] ClassyJacket|8 years ago|reply
[+] [-] bingobob|8 years ago|reply
Australian government couldn't subsidise cars that where losing sales year on year to smaller cheaper to run cars.
GM just wanted the handouts to keep it running when that dry up they pull the pin
John Cadogan is a bloke that called the end of the Australian Car Manufacturing many years ago and has a great video on why it died here. https://www.youtube.com/watch?v=_uFYW5tMoeg
[+] [-] duncan_bayne|8 years ago|reply
[+] [-] yitchelle|8 years ago|reply
I was with a Tier 1 supplier in Australia before transferring to Germany, the market place is so different. Looking back, it's a wonder that it actually lasted this long.
[+] [-] Overtonwindow|8 years ago|reply
[+] [-] yuhong|8 years ago|reply
[+] [-] georgeecollins|8 years ago|reply
[+] [-] nradov|8 years ago|reply
[+] [-] bluedino|8 years ago|reply
[+] [-] aaron695|8 years ago|reply
Australia has tonnes of gas but unlike USA has not transformed that to cheap energy and the industries that come with it.
[+] [-] Ice_cream_suit|8 years ago|reply
It got to the stage where when buying cars, people I knew would check the VINs to ensure that they were not made in Australia.
Fords made in Australia were particularly bad. Toyotas made in Australia were not up to the standards of the Japanese built Toyotas, but were far better than the pieces of rubbish turned out by the Australian subsidaries of American firms.
Driving one of the US branded cars, was like having a big sign saying " I am a bogan"
Australian slang for chav / redneck