Thread: Death Of The Australian Motoring Industry

Ford and Holden had everything at their feet and what happened,they didn't bother to improve their vehicles or move with the times because the tariffs protected them,even now they are still making vehicles no one wants.The car industry has been a leach on the Australian tax payer for years,good riddance. Pat

Mostly not exactly a leech on taxpayers as a leech on car buyers.

As the article points out, the end was inevitable under the Labor Button plan. It might have worked if there had ever been a truly Australian car manufacturer. Actually, there were several, but none were successful, usually because they could not compete with the government supported multinationals.

I suspect that the main reason there has never been a successful Australian car (other than the small domestic market) is that Australians have always attacked rather than supported successful businesses - whenever a business looks successful, tax and other policies here always seem to make it more attractive for foreigners to buy the shares compared to Australians.

For example, in the 1970s, an Australian individual who could afford to buy large parcels of shares paid 67 cents in the dollar income tax compared to about 35 cents for the foreign company - but capital gains were untaxed. So what did they mostly do? - if the business was successful, sell the shares!

John

A quick look at Australian factories and assembly plants in the 1960's
GM-H Mosman Park,
Ford Fremantle,
GM-H Elizabeth,
Ford Birkenhead,
GM-H Woodville,
Ford Campbellfield,
GM-H Fisherman's bend,
Ford Geelong,
Rootes Group Port Melbourne,
Standard Motors Port Melbourne,
GM-H Dandenong,
Volkswagen Clayton,
Ford Lidcombe,
GM-H Pagewood,
BMC/Leyland Zetland,
Ford Eagle Farm,
GM-H Acacia Ridge,
GM-H Fortitude Valley,

Now its all gone,what a waste

Originally Posted by disco man

......

Now its all gone,what a waste

Well, yes - but look on the bright side. You list three imported vehicles in your signature. If the same protection that kept these plants busy in the 1960s applied today, these would have cost you at least 50% more. That is, if they were available at all.

Have a look at a bit of history. Up until the 1960s, Australia imposed punitive duties on all imports except for ones from the Empire. This meant Australians usually had English cars (or imports from US manufacturer's Canadian factories).

During WW1, imports of complete cars were banned to conserve shipping space for military purposes, resulting in the growth of body builders such as Holden and Ford Australia. After the war finished, the ban was replaced by tariffs to protect the industries that had grown up during the war.

With the start of WW2 (in fact, even before the start), Australia started on forced industrialisation, as supplies that had been coming from the UK in particular became unavailable. With the end of the war, while imports became available again, the Australian government, concerned for the workforce now employed in these industries as well as returning servicemen, needed to keep this industry going. As the head of GMH (L.Hartnett) had headed the government's wartime industrial push, a proposal from GMH to start full scale production in Australia of an abortive 1942 Chevrolet design, was accepted, with the government not only providing massive protection, but paying the costs of tooling.

With the change of government in 1949, other manufacturers started demanding the same treatment, and although, as far as I know, none got a direct payment like GMH, tariff reductions on parts as long as significant local content was used resulted in a wide range of cars from Landrovers to Jeeps and Citroens to Volkswagens and Falcons to Valiants were being assembled in Australia by the late 1960s. These included unique models from some manufacturers, especially as the Australian content rules tightened. (Just assembling a vehicle from imported parts represents about 60% of the cost - add things like tyres, glass and upholstery, and you can get close to 70%. After that you have to start doing things like making panels, engines, gearboxes, etc, which gets expensive to set up.)

By the 1970s, other countries that had been devastated by war recovering, and with better communications, Australian car users were starting to get restive, especially when Japanese cars were appearing that were in some aspects better that local cars, and cheaper despite the massive protection. This ultimately resulted in the Button plan - see above.

Before WW1, Australia had perhaps the highest living standard in the world on average. By the 1970s we were still fairly well up the ladder but nowhere near the top. It is possible that this reflects the high level of manufacturing protection, and as this has reduced, our position has again climbed relative to other countries. Maybe a coincidence, maybe not.

John

Originally Posted by PAT303

Ford and Holden had everything at their feet and what happened,they didn't bother to improve their vehicles or move with the times because the tariffs protected them,even now they are still making vehicles no one wants.The car industry has been a leach on the Australian tax payer for years,good riddance. Pat

ROFL you ate that line and believed it

At a "cost to the tax payer" they built about 150,000 cars, at an average value of $40,000 = around $6 billion we will no import instead of make here.
At a "cost to the taxpayer" they employed 20-30,000 directly, (include all their parts suppliers)earning an average of say $50,000 each = $1-1.5 billion no longer paid and spent here.
Of that 1-1.5 billion,"at a cost to the taxpayer" NOW when the plants close the govt will lose around 25% paid in income and various other taxes= $ 250-375million lost to govt income.
Now how many other jobs will be lost "at a cost to the tax payer" with the loss of between $750-1200million being spent in the community after tax?
At a "cost to the tax payer " two third of those who leave their car jobs will be on welfare long term, 14-20,000 more unemployed x $ 16,000= $200-320million more paid in welfare ALONE!
Hmm now what was the govt subsidy again???? From memory around the 300 million mark.

Originally Posted by JDNSW

Well, yes - but look on the bright side. You list three imported vehicles in your signature. If the same protection that kept these plants busy in the 1960s applied today, these would have cost you at least 50% more. That is, if they were available at all.

Have a look at a bit of history. Up until the 1960s, Australia imposed punitive duties on all imports except for ones from the Empire. This meant Australians usually had English cars (or imports from US manufacturer's Canadian factories).

During WW1, imports of complete cars were banned to conserve shipping space for military purposes, resulting in the growth of body builders such as Holden and Ford Australia. After the war finished, the ban was replaced by tariffs to protect the industries that had grown up during the war.

With the start of WW2 (in fact, even before the start), Australia started on forced industrialisation, as supplies that had been coming from the UK in particular became unavailable. With the end of the war, while imports became available again, the Australian government, concerned for the workforce now employed in these industries as well as returning servicemen, needed to keep this industry going. As the head of GMH (L.Hartnett) had headed the government's wartime industrial push, a proposal from GMH to start full scale production in Australia of an abortive 1942 Chevrolet design, was accepted, with the government not only providing massive protection, but paying the costs of tooling.

With the change of government in 1949, other manufacturers started demanding the same treatment, and although, as far as I know, none got a direct payment like GMH, tariff reductions on parts as long as significant local content was used resulted in a wide range of cars from Landrovers to Jeeps and Citroens to Volkswagens and Falcons to Valiants were being assembled in Australia by the late 1960s. These included unique models from some manufacturers, especially as the Australian content rules tightened. (Just assembling a vehicle from imported parts represents about 60% of the cost - add things like tyres, glass and upholstery, and you can get close to 70%. After that you have to start doing things like making panels, engines, gearboxes, etc, which gets expensive to set up.)

By the 1970s, other countries that had been devastated by war recovering, and with better communications, Australian car users were starting to get restive, especially when Japanese cars were appearing that were in some aspects better that local cars, and cheaper despite the massive protection. This ultimately resulted in the Button plan - see above.

Before WW1, Australia had perhaps the highest living standard in the world on average. By the 1970s we were still fairly well up the ladder but nowhere near the top. It is possible that this reflects the high level of manufacturing protection, and as this has reduced, our position has again climbed relative to other countries. Maybe a coincidence, maybe not.

John

You missed quite a few steps in the history, John. Like the EEC forcing Britain to abandon trade with its Empire in favour of them and the Japanese dumping cheap cars on the Australian market in protest of our tariffs, or Bob Hawke destroying the Australian manufacturing industry in order to reduce the unions power.

Jeff

How many people who complain about the Australian car industry closing down actually own a recently built Australian car that they purchased new?

The answer is very few, this is a Land Rover forum, most of us have chosen a foreign built vehicle to be our vehicle of choice. Why? Neither Ford nor Holden build the type of vehicle we want and we like Land Rovers. So we buy foreign as does most everyone else, if Australians aren't going to buy local built cars then how can they complain when the businesses become unviable? As far as I can see everyday Australians decided well before the government to stop supporting the local industry, so end of story.

Originally Posted by JDNSW

Well, yes - but look on the bright side. You list three imported vehicles in your signature. If the same protection that kept these plants busy in the 1960s applied today, these would have cost you at least 50% more. That is, if they were available at all.

Have a look at a bit of history. Up until the 1960s, Australia imposed punitive duties on all imports except for ones from the Empire. This meant Australians usually had English cars (or imports from US manufacturer's Canadian factories).

During WW1, imports of complete cars were banned to conserve shipping space for military purposes, resulting in the growth of body builders such as Holden and Ford Australia. After the war finished, the ban was replaced by tariffs to protect the industries that had grown up during the war.

With the start of WW2 (in fact, even before the start), Australia started on forced industrialisation, as supplies that had been coming from the UK in particular became unavailable. With the end of the war, while imports became available again, the Australian government, concerned for the workforce now employed in these industries as well as returning servicemen, needed to keep this industry going. As the head of GMH (L.Hartnett) had headed the government's wartime industrial push, a proposal from GMH to start full scale production in Australia of an abortive 1942 Chevrolet design, was accepted, with the government not only providing massive protection, but paying the costs of tooling.

With the change of government in 1949, other manufacturers started demanding the same treatment, and although, as far as I know, none got a direct payment like GMH, tariff reductions on parts as long as significant local content was used resulted in a wide range of cars from Landrovers to Jeeps and Citroens to Volkswagens and Falcons to Valiants were being assembled in Australia by the late 1960s. These included unique models from some manufacturers, especially as the Australian content rules tightened. (Just assembling a vehicle from imported parts represents about 60% of the cost - add things like tyres, glass and upholstery, and you can get close to 70%. After that you have to start doing things like making panels, engines, gearboxes, etc, which gets expensive to set up.)

By the 1970s, other countries that had been devastated by war recovering, and with better communications, Australian car users were starting to get restive, especially when Japanese cars were appearing that were in some aspects better that local cars, and cheaper despite the massive protection. This ultimately resulted in the Button plan - see above.

Before WW1, Australia had perhaps the highest living standard in the world on average. By the 1970s we were still fairly well up the ladder but nowhere near the top. It is possible that this reflects the high level of manufacturing protection, and as this has reduced, our position has again climbed relative to other countries. Maybe a coincidence, maybe not.

John

Some very good info in there John,i understand what your saying as well.But at the end of the day if not being able to own a Land Rover is the price to pay to have Australian people still in work in those closed down factories then i would gladly give them up.

Some BIG mistakes were made by the car makers and the Government and some good and bad has come from it.Australians can buy a brand new car for around the $10,000 mark,but at the cost of many jobs and the loss of skills.

I feel Toyota **** all over the Australian workers when they pulled out,they are the BIGGEST car maker in the world and were very happy to reap millions in profits from this country,but as soon as things got tough they just shut up shop and left.Thanks for the millions Australia catch you later.