Holden's Devereux delivers speech on local car industry [LONG]

[Road_Warrior]

This is a long speech so go get yourself a sammich or sumthin'

http://www.carpoint.com.au/news/2011...ess-club-27977

FCAI president delivers eloquent argument in support of local manufacturing

Holden MD and sitting FCAI president Mike Devereux (pictured) has delivered a thought-provoking speech to the National Press Club today, backing automotive manufacturing in Australia.

Entitled 'Make it in Australia: why car manufacturing matters', the speech rigorously examines how the Australian industry shapes up against the auto industry in other markets and how the government here is on the right track in supporting the locals — with a side order of chiding for the cessation of the Green Car Innovation Fund.

In the course of his speech, Devereux called for Australia and Australians to get behind a 'knowledge economy' and recognise the importance of a homegrown manufacturing industry, not only in the present, but ready for future contingencies.

Devereux began with an analogy from the IT world, citing the difficulty online book retailer Amazon experienced, finding a US-based company that could manufacture the innovative Kindle reader.

Over the duration of the half-hour speech, Devereux clarified numerous points that seem to be misunderstood by the population at large. He refutes that the auto industry in Australia is 'a dinosaur' when Toyota is building a hybrid and both Ford and Holden have developed engines that will run on alternative fuels. And Devereux also denies that the local industry is protected any more than the industry in well-established and sophisticated markets such as Germany. Local models and local manufacturing have directly or indirectly contributed to export earnings from parts supplied to foreign companies. A protected industry couldn't achieve that sort of end.

The industry, employing 59,000 Australians directly and further untold numbers in support industries, is also in a position to branch out of automotive, with examples provided including Hella's lighting systems for mines and Diver's plasma TV screen brackets. While Australia maintains an automotive industry, Devereux said, it has world-class institutions the likes of Monash University and the RMIT to support education and training for the industry. And the 'products' of those institutions frequently go on to be 'exported' to the rest of the world in 'live' trade.

Indeed, one such Aussie export cited by Devereux was Andrew Liveris, a Darwin resident and graduate from the University of Queensland who is now the CEO of Dow Chemical Company in Michigan and co-chairs the Advanced Manufacturing Partnership set up by US President Obama.

Liveris has written a book 'Make it in America', which features the Amazon/Kindle anecdote mentioned by Devereux, who acknowledges the irony that "a story from a book called ‘Make it in America’, penned by an Australian, is now being re-told by a British-born Canadian from a global American company arguing the case to ‘Make it in Australia’."

A transcript of Devereux's speech follows in full.

The product you never imagined

Vice President, Steve Lewis, ladies and gentlemen and viewers at home, thank you for the opportunity to address the National Press Club and discuss the automotive industry in this country.

I actually want to start with a story, and it’s not about a car.

In 2007 the world’s largest online retailer, Amazon.com, based in Seattle, launched its first physical product.

This hugely innovative and successful product is the Kindle, an electronic book reader born out of American R&D from Silicon Valley.

We live in a mobile driven world now, so what’s so special about the Kindle? Well it’s not just a portable library and it’s not just another tablet.

Unlike a normal computer screen, the Kindle can be read in direct sunlight, like a piece of paper. Amazon developed their revolutionary technology which uses tiny capsules of electronic ink to change what appears on the screen –without illumination.

With this technology, the Kindle could be to books, what the iPod was to music. So Amazon went searching for a local company that could actually produce the device.

In Massachusetts they found a company called E-Ink. E-Ink grew out of MIT’s Media Lab and was one of the only companies in the US that could produce this type of electronic ink device.

But E-Ink didn’t have the technology to build the Kindle screen itself. So for Amazon to get the device into production, they had to find a manufacturing partner.

Again Amazon went looking for a local partner with the expertise they needed in LCD screen technology. But there wasn’t one in the United States, as incredible as that sounds.

Even though the R&D for LCD technology originated in the US, the entire industry had been relinquished to Asia in the mid-90s when these countries offered US companies a business environment that was simply too good to refuse.

So Amazon had to look overseas for a manufacturing partner and found a company called Prime View in Taiwan.

It didn’t take Prime View long to decide how much more cost effective it would be to buy electronic ink from a source closer to the plant - about 13,000 kilometres closer.

So Prime View purchased E-Ink and relocated it, and the entire electronic ink industry, to Taiwan; an entire new industry drawn away from the country that conceived it to a country that could build it.

Amazon won’t release official sales numbers. But I’d bet people in this room are among the estimated 3 million people who’ve bought one, this fantastic innovation, designed in America, manufactured in Taiwan.

Today Amazon sells 765,000 e-books for their invention and people can take 1500 books to read on their next holiday.

This time last year Amazon’s e-book sales surpassed paper book sales for the first time.

Why tell this story? Because it tells us something about the link between manufacturing, innovation and the creation of a knowledge economy – and it’s chilling.

The story is told much more elegantly in a book called ‘Make it in America’ by Andrew Liveris. Andrew Liveris is an Australian, a boy from Darwin, a graduate of the University of Queensland and Co-Chair of President Obama’s Advanced Manufacturing Partnership.

But his day job is Chairman and CEO of Dow Chemical Company in Midland, Michigan, which is one of the largest chemical manufacturing companies in the world, with a turnover of $54 billion a year, making 5,000 products, at 188 sites, in 35 countries.

So it’s with some irony that a story from a booked called ‘Make it in America’, penned by an Australian, is now being re-told by a British-born Canadian from a global American company arguing the case to ‘Make it in Australia’.

There’s more to the Kindle story than ‘you don’t know what you’ve got til it’s gone’.

As Liveris says: “By ceding these industries to other countries, we aren’t just losing out on today’s manufacturing jobs. We’re losing out on the production of tomorrow’s innovations, on the progeny of the products being built today.”

And that’s the future we’re contemplating - if we give up manufacturing capability, we mortgage our future for the things we can’t even imagine today.

If we’re serious about Australia being a ‘knowledge economy’, we need strategic capability. A first-class education system and the ability to build things – high-tech, value-add products – like cars – are the building blocks.

So it perplexes me, when after 27 years in the industry – this highly innovative, fast paced business - I hear people, probably some of you in this room, describe the auto industry as a ‘dinosaur’.

Australia’s auto industry is anything but prehistoric. We are developing new technologies, state of the art manufacturing skills and growing energy industries to help solve other problems – like climate change.

Sustainability

As importers and local manufacturers, we play a strategic role in addressing sustainability and helping people reduce carbon emissions.

Passenger cars currently make up less than 8% of CO2 emissions in Australia – I bet that’s surprising to many people who assume it’s much higher. That said we will to reduce this as much as we can. And we’re making significant progress already - between 2002 and 2010 CO2 emissions from new cars in Australia decreased more than 15%.

Billions of dollars are being spent on R&D for new powertrain technologies, innovations in light-weighting, alternative fuels and electrification.

By the end of next year we think around 30 new ‘environmentally friendly’ models will be on sale in Australia giving drivers a choice between all-electric, hybrid, LPG, diesel or ethanol – the choice is theirs.

One of those vehicles is a new Australian-made hybrid vehicle, Toyota’s Hybrid Camry. Actually the decision to bring the first locally-made hybrid to Australia was doubly significant as the team over in Altona had to convince its parent company to relocate the production program from Thailand – no small feat.

Importantly, the local production of Hybrid Camry also helped Toyota secure local production of their next generation 4-cylinder petrol and hybrid engines. This investment helped their supply base develop new hybrid skills and knowledge and also added some much needed incremental volume for the industry.

Ford and Holden are also building considerable capability in alternative fuels – like LPG and ethanol which highlights the flow-on benefits of local manufacturing - building and supporting local industries.

LPG is not a new fuel – but has huge potential in Australia. We have abundant supply - which means improving energy security, more local jobs and significantly lower CO2 outputs compared to petrol.

As an example, Ford has invested $232 million to transform the environmental performance of its locally made vehicles.

Ford’s Territory is the only SUV engineered, designed and produced in Australia and now features a clean burning diesel engine which has given it leadership in its segment.

Next year Ford is also launching EcoBoost Falcon which features a highly advanced, turbo-charged, direct injection, four cylinder engine and they’ve just launched the EcoLPi Falcon which uses state-of-the-art, liquid-phased injection LPG technology.

This is the first application of this advanced technology by Ford on an in-line six cylinder engine and it has really helped grow the capabilities of both Ford engineering and local supplier partner Orbital.

At Holden we have our own dedicated LPG Commodore range due in the market early next year as well.

No matter which team you choose, for customers LPG is a value story and a performance story – you get a large car that drives great and is cheaper to run per kilometer than a small car. For Australia’s economy this is an innovation story, a regional employment story and an environmental story.

Holden has also invested heavily in ethanol. Ethanol can significantly reduce total CO2 emissions, and like LPG, offers the chance to create jobs in regional Australia.

Holden is driving a consortium in Victoria to build the country’s first Gen II ethanol plant which will be able to turn rubbish to fuel. Not necessarily like in the movie ‘Back to the Future’, but we’re working towards making ethanol from tyres and other waste in the next few years.

There’s no silver bullet here or in any other market when it comes to the environment; and we need to pursue a range of options including electrification, but we also need real world solutions for today that support the way Australians really live.

No matter which solutions customers tell us they want, the investments being made by the car companies are helping to create jobs, a clean energy future and enhance our strategic capability.

Innovation

Manufacturing - more than any other sector - creates jobs.

And not just downstream in terms of components, but actually outside its own sector in industries like packaging, telecommunications, mining and construction.

For the auto industry in Australia, which directly employs 59,000 people, it’s estimated that for each of these jobs another six people are employed in supporting industries.

In the case of the new locally-made Holden Cruze small car, our preliminary economic modeling shows making this vehicle in Australia, instead of importing it from GM Korea, injects $230 million a year into the Australian economy.

To use an example from Toyota, its local production played an important role in securing the future of automotive glass manufacturing in Australia. Without federal and Victorian state support these capabilities would have been lost overseas but today the MH Group is a key supplier to the automotive industry.

The automotive industry is also the largest R&D contributor in the Australian manufacturing sector. Our ability to work on global vehicle programs is a critical part of this.

Global platforms enable car makers to get the scale they need to cover ground-up development costs – which in the case of VE Commodore was a billion dollars.

Common platforms are underneath different models and different brands around the world and enable car makers around the world to deal with increasing fragmentation in the market and competition for capital.

Global vehicle development gives Australia the opportunity to design and engineer vehicles for markets around the world.

It also gives our local component makers the opportunity to tap into global supply contracts – opportunities that simply wouldn’t exist without local manufacturing.

Take the new Ford Ranger. It’s an all-new LCV platform; designed, developed and tested in Australia by Ford; and it’ll be sold in 180 markets around the world.

So for Melbourne-based Diver Consolidated Industries it means the opportunity to supply not just the Falcon in Australia, but also cargo tie down cleats for the Ranger which means new export opportunities to South Africa and China. Yes, an Australian component maker is exporting to China.

Similarly, Holden plays a role in global vehicle development work for GM. Our team in Port Melbourne was responsible for designing and engineering the Chevrolet Camaro. Camaro: the ultimate American muscle car, designed in Australia, made in Canada. Welcome to the new global reality of the auto business.

GM’s global footprint also provided new export opportunities for Diver. A company which has supplied Holden since the original 48-215, Australia’s first mass produced car, Diver not only supplies local Commodore models but now ships door hinges to China and transmission tunnel insulators to Canada.

And for Nissan it means their casting plant in Dandenong is set to produce 22,000 electric vehicle components a month to supply the new electric vehicle, the Leaf which will launch in Australia mid next year.

This is what it means to be part of an integrated, global design, engineering and manufacturing industry.

Our manufacturing infrastructure, and the skills in our industry, can also be used to create non-automotive products. This includes things like:

* Diver making radiant heat curtains for fire trucks and houses in bush fire zones and plasma TV screen brackets that can take the weight of a human,
* Futuris making totem poles for public transport information and interiors for trams and trains,
* Palm Plastics making non-breakable, and actually glow in the dark, wine glasses, and
* Hella making underground lighting for the mining industry.

The automotive industry is also one the biggest employers of industrial designers in Australia. Trained in world leading universities like Monash and RMIT, the auto industry provides a vital training ground for designers – who often become ‘live’ Australian exports.

Automotive manufacturing is also the biggest customer of Australia’s tooling industry. The auto industry maintains a critical mass of demand for these skills which are also needed by other sectors – particularly mining and aerospace.

We need tool makers, we need people who can turn a lathe, we need fitters and turners, boiler makers, tool designers, maintenance workers and fabricators. We can’t afford to lose these skills and job opportunities for young people who don’t necessarily want to go university.

Competitive environment

There should be no misunderstanding or doubting the strategic nature of automotive manufacturing to Australia.

So putting aside these arguments, I want to spend some time talking about the environment in which we operate and compete for investment.

Because this is where the real competition happens. It’s not about Holden vs Toyota vs Ford vs importers. It’s about how each of us convince our parent companies to invest right here in Australia.

When we compete to design, engineer or build a new model in this country, we’re not competing with rival brands, we’re competing with rival countries.

And there are currently 13 of these nations by the way, only 13. And there are lot more who want to do what we do and who will offer whatever it takes to attract that investment – because they understand what that means for education, employment and innovation.

They understand the strategic rationale to have this type of industrial capability.

And where this billion-dollar-capital-intensive industry exists, one of two things happen: government protection or government investment ... and sometimes both.

So where does Australia fit?

Like the dinosaur description, again, I’m often shocked to hear how out of touch with the competitive market many commentators are.

Fact: Australia is one of the most, if not the most, open car markets in the world.

Vehicle tariffs in Australia are on average around 3.5%, down from more than 30% in 1990s. And tariffs on cars imported into Australia are lower than on mining, electrical and agriculture products.

Australia’s long-term policy to open this market, increase competition and force local car makers to be even more competitive has absolutely achieved its objectives.

We innovated, we got flexible, we got competitive; incredibly competitive actually. Australia has more than 60 automotive brands in a market of just 1 million new sales, compared to:

* Japan with 33 brands in a market of 5.8 million sales – and import penetration as low as 5%,
* US with 32 brands competing in a market which has been as high as 17.3 million, and
* Europe with around 70, but in a market more than 15 times the size of Australia.

As barriers have come down, imported vehicles have naturally increased quite significantly – something you would logically expect. Today around 85% of new cars are imported.

Until recently, certainly in the case of Holden, the decline in domestic sales volume had been offset with exports. But post-GFC, and with an Aussie dollar at parity or more, and without the access to other markets, that they have to ours, Australian manufacturing is obviously going to be challenged.

How does Australia compare to other markets?

* Applied vehicle tariffs in the EU and UK are 10%
* In China they’re 25%
* India 60%
* Malaysia 30%
* South Korea 8%
* Russia 30% plus an additional 18% VAT for imports
* Passenger cars in the US are 2.5% and light commercial vehicles at 25% and
* Thailand is a staggering 80%.

And then there’s Brazil. Their base tariff rate is 35%, but they have an additional tax called the Industrial Products Tax (the IPI) which falls mainly on imported vehicles.

Brazil is currently experiencing a resources boom which is driving up their currency and they face a significant increase in competition from imports, particularly from South Korea. Sound familiar?

So in the last few months Brazil increased the IPI which acts as non-tariff trade barrier from around 25% to as high as 55% - again, on top of the 35% tariff.

Holden has an export program to Brazil where the Commodore is sold as a top of the range Chevrolet Omega. The new tax added around $9,000 USD to the retail cost of the car overnight.

This sort of imposition makes it extremely difficult to compete and we’ve been forced to review the future of this export program.

Australia also has free trade agreements with some of the countries I mentioned. This should, in theory, give Australia access to those markets in the same way they can access ours.

But it’s just not the case. Some of these markets have a raft of other non-tariff barriers that make exporting to these markets virtually impossible.

These barriers can include excise, council taxes, VAT and special registration charges for imported vehicles. In some cases the effective rate can be over 120%.

Let me make it absolutely clear – the car industry is not calling for a return to protectionism. This is categorically not the case.

But in other countries where integrated car industries exist – where companies have the capability to design, engineer, build and sell cars – there are either barriers of some form to protect these investments or direct or indirect financial support to attract and retain investment.

Fact – this is an either or equation.

Every auto manufacturing nation in the world has taken direct action to make their country more attractive to potential investors. Some have offered tax holidays, some have offered investment incentives, some have increased trade barriers.

Government co-investment policies

Government investment, or intervention, should not be a dirty word. Government support and investment in automotive capability can happen in several ways – some transparent, some not so transparent:

* it can take the form of an ownership stake in a car company such as Volkswagen, of which the German state of Lower Saxony owns around 20%,
* or Renault for example of which the French government owns around 15%,
* support can also be injected during a time of crisis, such as the US and Canadian governments taking a stake in GM during the depths of the GFC,
* governments – be it federal, state or local – can attract investment in infrastructure through foregone revenue in terms of tax breaks or direct payments in terms of incentives, or
* the method we support, a long-term policy of co-investment, which sets a ratio for industry funding commitments for investments in clean technologies, practices and products.

The auto industry is not alone in this regard. In Australia, tourism, education, banking, mining and agriculture all require some form of government intervention and direct or indirect support.

Mining for example has claimed over $6.2 billion over the past four years from the Federal Government through the Diesel Fuel Rebate Scheme. This translates to an average cost of around $1.5 billion a year for Australian tax payers.

This rebate does not require users to guarantee a return on investment (ROI), or a commitment to capital investment, there’s no guarantee of job retention or growth and there’s no direct link to innovation and efficiency improvements.

Contrast this to the Green Car Innovation Fund where auto makers could apply for co-investment funding on a three to one basis to bring new more sustainable products, technologies and processes to Australia.

There is a guaranteed ROI, there is job retention and growth, there is a direct link to innovation and efficiency.

So with this in mind, why do people, again, probably some of you in this room, think Australia invests disproportionately in its auto industry relative to other countries?

One reason is bad and misleading data. Last year the OECD Economic Survey released figures that implied Australia’s industry was the second most subsidised in the world. A big claim – and as it turns out an erroneous one.

The OECD has since stated there were errors in this report saying: “Amount of subsidies to the auto sector may not include all forms of government support and covers varying time frames …”

The report doesn’t compare apples with apples.

It compared Australia’s 12-year New Car Plan launched in 2008 by the Rudd government against short-term retail ‘stimulus’ programs like cash for clunkers, in France, Germany and Sweden, some of which lasted less than 12 months.

Not surprising - with bad data comes bad policy decisions, like abandoning the Green Car Innovation Fund program and reducing future co-investment funding for clean technology by $800 million.

So what’s the real story? The Federal Chamber of Automotive Industries engaged Sapere Research Group to re-run the data using comparable co-investment programs and comparable time frames.

What the OECD had estimated was about $200 per person in support for the Australian industry is probably less than $20 a person. This is not a small error.

And actually what it highlights is that the Australian auto industry is competing in a global market with a fraction of the direct financial support, on a per person basis, compared to other major automotive nations like the US, Sweden, France, Canada , Germany and the UK.

Developed and developing countries alike are building comprehensive national strategies for manufacturing and investing extraordinary resources into expanding their capacity to create and build things.

Some recent examples of governments making these strategic co-investments include:

The state of Saxony in Germany, home to BMW & VW, contributed €46 million to BMW for their Megacity Electric Vehicle program and €83.7 million to VW for small and medium car production.

The state of Georgia in the US, contributed $410 million in direct support and incentives for Kia to build its first US plant which bought a $1 billion investment from the South Korean company.

Similarly, Hyundai in Alabama received $252 million in support for its manufacturing operations.

Most interesting though is the approach being taken in the UK, a high cost country like Australia and the US, which had also allowed its manufacturing base to deteriorate in the past.

Prime Minister David Cameron is rebuilding the automotive manufacturing industry and their co-investment policies are attracting billions of dollars in manufacturing investment.

Nissan for example is investing ₤192 million to build the next generation Qashqai small SUV in Sunderland securing around 6,000 direct and indirect jobs.

Nissan also committed £420 million to locally build the Leaf electric car and lithium ion battery cells which is expected to maintain more than 2,000 Nissan and supplier jobs.

This investment was directly supported by the UK government with ₤20.7 million from its Grant for Business Investment program and ₤137 million from the European Investment bank.

BMW also invested ₤420 million in Mini manufacturing in Oxford taking its total manufacturing investment in the UK to ₤1.5 billion – securing 5,000 jobs and making Mini the third largest vehicle manufacturer in the UK.

As part of the announcements, Prime Minister Cameron said these words:

"It's very much part of our ambition as a government to rebalance our economy. We've been too reliant on financial services, too reliant on one part of the country.

“We want to see more manufacturing, and I'm delighted that so many automotive manufacturers are bringing production and supply chain onshore.”

Both companies said the UK government's support for the manufacturing sector was a key factor in their decision to invest in next generation production in the UK.

They echoed Cameron’s view that industrial growth was vital to rebalance the economy and bolster growth – and that this would only happen through technological innovation.

Conclusion

Where does that leave Australia? I think we’re at a fork in the road.

Tim Colebatch from The Age aptly described the risk we currently face:

“…Mineral prices could fall sharply. But when factories close, they don't reopen. To avert that would require big policy shifts, not Band-Aids. The risk is that we will lose manufacturing permanently for a mining boom that turns out to be only temporary.”

In the short-term, losing the car industry would mean walking away from:

• exports worth $3.6 billion worth a year,
• 59,000 immediate Australian jobs, and more in supporting industries,
• billions of dollars in tax revenue and wages and salaries pumping into the economy each year, and
• billions of dollars in R&D for many years to come.

But more troubling is the Kindle example, the innovation, the product, the future capability, you don’t even know you’re giving up.

So, I ask again, where does this leave Australia? A key player in what Liveris describes as the ‘golden age of manufacturing’? Or a hole in the ground shipping raw materials to other countries to turn into high value goods?

Let’s be under no illusion about the competition we face from within our own organisations as we fight for capital investment in this country - and from the other countries around the world that want to do what we do.

But what is absolutely critical is long-term policy certainty, clarity, consistency and competitiveness.

We can’t establish long-term co-investment plans only to pull the rug out from under companies half way through decade long product development and investment cycles.

It’s our job to be as flexible as possible, we have to run extremely lean and efficient operations. We are committed to being the best of the best and competing to overcome the challenges that high labour costs and high currency present this country.

In his State of the Union Address in January President Obama echoed David Cameron’s call to rebalance the economy and to invest in manufacturing:

“Cutting the deficit by gutting our investments in innovation and education is like lightening an overloaded airplane by removing its engine. It may make you feel like you're flying high at first, but it won't take long before you feel the impact.”

So if Australia does want to be a knowledge economy and a diverse economy, and it wants to be more than a farm, a mine or a hotel then we need to invest in our capability to design, engineer and build.

If we don’t, the real opportunity cost is something we can’t even imagine today.

Thank you.

Even though he made the speech as Chair of the FCAI, he did a fair bit of trumpet blowing for Ford.

All in all a good speech.

[Brazen]

A class act, and spruiked Ford and Toyota very well even though he is a Holden Chairman.

Its also a very sobering outlook on the conditions that Australia car makers have to compete against.

[jpd80]

This is the passage I found interesting:

Let me make it absolutely clear – the car industry is not calling for a return to protectionism. This is categorically not the case.

But in other countries where integrated car industries exist – where companies have the capability to design, engineer, build and sell cars – there are either barriers of some form to protect these investments or direct or indirect financial support to attract and retain investment.

Fact – this is an either or equation.

Every auto manufacturing nation in the world has taken direct action to make their country more attractive to potential investors. Some have offered tax holidays, some have offered investment incentives, some have increased trade barriers.

[XRtowcar]

Sounds like the usual give us money or we'll close it all down.

[jpd80]

I'm for government support provided the money is put to good use and not
wasted on uncompetitive vehicles, Territory is an example of money well spent.

Fingers crossed that EcoLPI and Ecoboost Falcon further the cause with strong sales..

[CAMS290]

If one of the 3 manufacturers that we have left in Australia pulls the pin, it would have dire consequences for the component manufacturers that supply all three.
Bosch, Hella, PBR, and many more smaller ones.

[jpd80]

Originally Posted by CAMS290

If one of the 3 manufacturers that we have left in Australia pulls the pin, it would have dire consequences for the component manufacturers that supply all three.
Bosch, Hella, PBR, and many more smaller ones.

Bosch is relocating overseas. I think that ultimately, manufacturers like Ford have a choice,
either build in Thailand or import Asian parts and keep building Falcon and Territory here.

[mik]

no 2 ways about it manufacturing in oz against other country`s is tuff, loosing manufacturers means losing a skills base which is a major disaster, the handouts our car makers get is pretty small imo, see how many brands we have here competing with the locals compared with other big country`s, way too many i reckon.

[xtremerus]

Very good arguments for retaining all local Industries.
Real food for thought, for all the knockers of the Australian Auto industry.
Half of them seem to be on AFF

[Franco Cozzo]

I think the government should keep giving incentives out to local manufacturers and maybe even subsidise them at the showroom, offer some incentive to buy an Australian car.

The problem is to average joe is in Ford's case, they're seen as a low quality product, they have a very bad reputation.

Mr and Mrs Average, when they're out for a new car, I suggested they look at Ford if they like their new range and I got a reply: "I'm not buying a dirty Ford!".

Another only buys BMW and I told him Ford also uses the 6sp auto gearbox (ZF) that BMW does, and he replied "Oh god, does that mean its going to break on me?".

[jpd80]

Well, I'm of a different persuasion. If manufacturers build cars people want, they will buy them.

Case in Point: Territory - 1776 with high transaction prices and no discounting.....

The market is very forgiving, just build or sell the right vehicles and the showroom fills with buyers...
I'm getting very excited at the thought of all the new products coming to Ford's showroom,
there's every possibility that Ford may move much closer to Holden's monthly sales next year.

[bobthebilda]

Originally Posted by Brazen

A class act, and spruiked Ford and Toyota very well even though he is a Holden Chairman.

Its also a very sobering outlook on the conditions that Australia car makers have to compete against.

He was presenting the speech as FCAI president. To only mention Holden would have made the speech a blatant plea for money, but by mentioning the achievements of Ford and Toyota, his personal plea then takes on the appearance of a plea from a greater group. Plus exactly what technological achievements could Devereaux have made about Holden - with the $180 million grant from australian taxpayers, we now build the daewoo lancetti in australia?.

But for man who apparantly knows the asutralian car industry well, he comes out with the followings -

Like the dinosaur description, again, I’m often shocked to hear how out of touch with the competitive market many commentators are.

One reason is bad and misleading data.

Devereux clarified numerous points that seem to be misunderstood by the population at large.

He then comes out with the following

For the auto industry in Australia, which directly employs 59,000 people, it’s estimated that for each of these jobs another six people are employed in supporting industries

What Deveraux is doing by making the above statement is being out of touch, misleading and showing a basic ability to misunderstand. The oz auto industry only makes 220,000 cars a year these days, to say the average worker is only making 3.5 cars each is complete crap. The vast majority of those 59,000 are employed in the auto industry, but they will always be there if the cars are imported or made locally. The industry average is about 15 - 18 cars = 1 job, so local manufacturing only amounts to approx. 14,000 jobs.

He then goes on to say

Importantly, the local production of Hybrid Camry also helped Toyota secure local production of their next generation 4-cylinder petrol and hybrid engines. This investment helped their supply base develop new hybrid skills and knowledge and also added some much needed incremental volume for the industry.

The incremental increase in volume that Toyota are getting out of the hybrid camry must amount to minus many hundreds per month.

But to quote Deveraux

One reason is bad and misleading data.

The simple issue is that if Deveraux believes investment in the auto industry creates value for australia, then Holden should work with its suppliers to immediately increase the local content of the Commodore and Cruze to 100%. This simple act, if initiated by all three manufacturers would double employment in the local auto manufacturing industry overnight.

[jpd80]

For the small amount of money spent on it, Territory has seen a huge change in product mix and average transaction price.
I believe this is much more important than governments just handing out cash, the selection of desirable products is key
to local manufacturers success, I think Ford has shown much more change and deserves to bare fruit form it endeavors.

[JG34JA]

Great speech. Good figures and examples to back it up. It is not a level playing field out there, and he puts an interesting angle on it as a "competition for capital", with differing countries all vying to make their own the best place for production. At the same time, Australia is passing legislation and experiencing action that makes investment here less certain, more regulated, more taxed and certainly subject to cost increases, exacerbated by a rallying AUD while other countries "QE" their currencies and put up more barriers to trade.

[ebxr8240]

Sheesh he talked up the new Ford engines...
Speech didn't stop for at least 35 minutes...
When he finished..

[Road_Warrior]

Originally Posted by xtremerus

Very good arguments for retaining all local Industries.
Real food for thought, for all the knockers of the Australian Auto industry.
Half of them seem to be on AFF

Exactly. I also liked the references to the tarrifs imposed by other countries with automotive manufacturing industries, should shut up some of the muppets on this forum claiming that Australia should have zero import tariffs simply because of some pie in the sky rubbish about wanting to buy foreign made cars at the same price as their country of origin, yet hate on local manufacturers because they "enjoy" some sort of tariff "protection" which is next to nothing in the entire scheme of things (the overall cost of importing vehicles here)

[borough]

He made some really good points. I am sick to death of hearing people calling for the death of the Australian car industry, it is like they believe other countries do not provide assistance. What is the future for Australia? An innovate engineering country or China's mining hole?

[ebxr8240]

If we lose jobs here ..
We become close to what has happened in
U.S...Been there twice in four years..
It's not nice in some areas.. Third world trust me...

Even a fair % our food is imported !!!
We need $$$ to go around in OUR country !!!

[phillyc]

Very good speech.

[Buntz]

I call for all members to over turn foreign built cars!

Originally Posted by Big Damo

I think the government should keep giving incentives out to local manufacturers and maybe even subsidise them at the showroom, offer some incentive to buy an Australian car.

The problem is to average joe is in Ford's case, they're seen as a low quality product, they have a very bad reputation.

Mr and Mrs Average, when they're out for a new car, I suggested they look at Ford if they like their new range and I got a reply: "I'm not buying a dirty Ford!".

Another only buys BMW and I told him Ford also uses the 6sp auto gearbox (ZF) that BMW does, and he replied "Oh god, does that mean its going to break on me?".

You haven't been the best advocate for local Ford's in the past. But what you really need to do with ignorant bastards like you quoted.... is school them. School them big time.

[burnz]

then we have china dumping cars at a loss to damage the local industry..

a fully loaded ute for $17,990... where is the saftey standards?
OH&S should limit work vehicles to 4star or better.

[jpd80]

Originally Posted by burnz

then we have china dumping cars at a loss to damage the local industry..

a fully loaded ute for $17,990... where is the saftey standards?
OH&S should limit work vehicles to 4star or better.

in all fairness, anyone who thinks that Chinese Vehicles will always be tinny death traps is ignoring history.
I see China the same way we viewed Korea and its cars 20-25 years ago but it won't take them as long to catch up.


The thing local manufacturers must do is not engage these manufacturers directly,
we need to build larger high quality vehicles and reap the rewards for doing that,
leave the competing with Asian models to our soon to arrive imported Fords.
When it comes to competing with Korea, our Indian sourced FoA designed vehicles
will do the job nicely thank you very much...

[pottery beige]

speech on telly now ch 2 in Wait Awhile..

[Jesmol]

Originally Posted by bobthebilda

The simple issue is that if Deveraux believes investment in the auto industry creates value for australia, then Holden should work with its suppliers to immediately increase the local content of the Commodore and Cruze to 100%. This simple act, if initiated by all three manufacturers would double employment in the local auto manufacturing industry overnight.

And immediately toll the death bell. The simple facts are the supply base in Australia has been lazy and stupid (in the majority). It has not kept pace with world leading technologies, capital investment in more efficient processes has been very low and short term gain has always been the priority.

There are exceptions out there, but the norm is not pretty.

In most cases the horse has bolted. The plastics industry in Australia is not in good shape, the metal bashers are too busy cutting off each others noses to see the big picture. We are rapidly becoming an assembly site of cars , not a true manufacturer.

[Polyal]

Originally Posted by xtremerus

Very good arguments for retaining all local Industries.
Real food for thought, for all the knockers of the Australian Auto industry.
Half of them seem to be on AFF

This is becoming a bit tiring. yes there are people who will have a crack at Ford regardless, its not hard to spot and its a very simple case of ignoring it, generally its done to get a rise out of people.

That being said, I for one dont mind saying it as it is, and if thats "Ford Bashing" then perhaps some are a little touchy when it comes to the blue oval. I care just as much as the next member about the fortunes of Ford, and that is why it can be frustrating to watch what unfolds.

But to sit here and pretend everything is perfect is not correct either, im sorry but there are no "participation" awards in the real world.

[aussie muscle]

Originally Posted by jpd80

in all fairness, anyone who thinks that Chinese Vehicles will always be tinny death traps is ignoring history.
I see China the same way we viewed Korea and its cars 20-25 years ago but it won't take them as long to catch up..

just as japan was in the 1950s (remember Back to the future 3, Doc says "no wonder it's no good, it's made in Japan!")