And that makes 3 - Toyota bails out

[StalkingWilbur]

That's a positive outlook you're promoting.

 

[schrodinger]

A. Count your lucky stars, Aussies.

1. Australians are the wealthiest people on Earth.

2. The watered-down GFC you felt here was a pinprick compared to the catastrophe felt elsewhere, and you're still in a far better position than most, despite recent trends.

3. Australia's economic class structure is radically flatter than that in the US. I've long been struck by how much more respect Aussies have for people without uni educations, and that's a very good thing, not just because it's right, but because it means you have an educational system and a culture that are far better geared to flesh out an entire economy with productive people who spend money.

4. Agriculture and its ancillary industries are more important to Australia's economy than manufacturing. We make the best wheat, cotton, sheep, you name it, in the world, and unlike most wealthy countries, we have room to expand agriculture and even more room to improve efficiency in that sector.

5. Australia's tax rates aren't that high. The US has marginally lower taxation overall but its government is in a perpetual state of near-bankruptcy. Most of the rest of the 'first world' has higher taxation.

6. The health care system here is extraordinary, and a hell of a bargain.


B. Though I utterly loathe the idiotic free market idolatry of many in the right wing, ...

1. Greed is not the problem -- it's a parameter, i.e., an unavoidable constraint, because humans are involved. Telling humans not to be greedy is like telling the sun not to shine.

2. Manufacturing cars is not the future for any western economies, because there are 3 billion or so people who can build them way cheaper. The loss of the car industry was neither Labor's nor Abbott's fault -- it was inevitable. If Hari Seldon were here, he would have predicted it from first principles.

3. Isolationism is a dead end now more than ever, however morally upright it may sound. Australia could in theory be self-sufficient, but it would also be pretty poor. The world economy is as you describe because rich people would rather pay less, and there are still poor people willing to take less money to make **** for them. But those rich people were rich before the majority of those jobs were shipped off to Bangladesh, so no, I'm not having myself on.


This country is uniquely situated to put itself at the pinnacle of the world economy. We should stop bitching about inevitable change, stop thinking with party blinders on, and figure out what else we can build from our abundant natural resources and human and intellectual capital. If the Germans can do it, despite living in a cramped, freezing-ass cold swamp with awful music, surely we can do it as well.

BTW, the idea that the US federal bailout of GM mandated GM to bring all jobs back to the US is just pure ********. GM is expanding overseas, not contracting. Besides, if you think a major corporation would keep a non-legally-binding promise to a politician, I've got a bridge to sell you.

 

[Econwatson]

2. Manufacturing cars is not the future for any western economies, because there are 3 billion or so people who can build them way cheaper. The loss of the car industry was neither Labor's nor Abbott's fault -- it was inevitable. If Hari Seldon were here, he would have predicted it from first principles.

That's strange, because the UK is the fastest growing economy in Europe and has just hit a six year high in car production. How do you explain that?

http://www.bbc.co.uk/news/business-25854938

 

[DJ_L3ThAL]

Because the rest of Europe is in dire straits. Compare oranges with oranges.

 

[Econwatson]

Because the rest of Europe is in dire straits. Compare oranges with oranges.

I'm not comparing the UK with Europe, I'm comparing it with Australia.

The guy above said 'Manufacturing cars is not the future for any western economies, because there are 3 billion or so people who can build them way cheaper'

People don't just want cheaper, they also want better. That is my point. Rolls-Royce, Range-Rover and Aston-Martin are proof of that.

Not sure why you are referring to Europe.

 

[Dave70]

HA... HA.. HA ..HA.. HA.. HA.. HA..... MMMMM..... BA..HA HA HA HA!!!!!......

..tee..he..he...

 

[Phoney]

..

 

[DJ_L3ThAL]

I'm not comparing the UK with Europe, I'm comparing it with Australia.

The guy above said 'Manufacturing cars is not the future for any western economies, because there are 3 billion or so people who can build them way cheaper'

People don't just want cheaper, they also want better. That is my point. Rolls-Royce, Range-Rover and Aston-Martin are proof of that.

Not sure why you are referring to Europe.

Sorry my mis-reading then!

UK has a substantially higher population and therefore market to sell to, and when I visited Europe, the consumer trend was clearly towards Euro built cars over Asian cars (don't think this has changed in recent times?). So it is a sheer numbers game as to why it is feasible in the UK to make and sell cars, because you can actually sell them at a rate that returns good profit. Whilst there are a lot of Fords/Holdens around, building V6/V8 huge sedans as your flagship models is deviating away from what consumers want in the first case these days (before anyone gets all "Aussie icon" on me, people want to go further for less fuel, period), coupled with the high costs of manufacturing labour and operating costs.

I did a presentation with the Marketing Exec at Futuris Automotive a couple years ago on sustainability and during my discussions with him when quizzing him on current media articles about auto manufacturing going under in aus he made the very simple point. That to make an equal quality car seat for a Toyota, here we need to add on not only higher labout costs for the individual, but they expect air conditioning and heating in the factory, clean toilets and a safe working environment. In China the workers don't expect (aren't entitled?) to any of that. So as a global manufacturing business trying to fund shareholders pay packets, what would be your choice when you are being paid a salary to make a decision to purely add to the shareholder pay packets?

I think the points raised on Aussies needing to get smarter and capitalise on what we can do better than any other nation is both prudent and the only way forward if we want to maintain this awesome country the way it is.

 

[schrodinger]

That's strange, because the UK is the fastest growing economy in Europe and has just hit a six year high in car production. How do you explain that?

http://www.bbc.co.uk/news/business-25854938

First, many things, many places are hitting six year highs, because the last six years have been uncommonly poor. Second, the UK car industry itself had nose-dived something fierce in the first half of the decade after steady decline in previous decades, so it doesn't take much recovery to hit a six year high. Third, as you pointed out, part of that production is driven by a niche demand unique to the UK, based on the illusion that they produce good, classy cars (in fact they're comically unreliable, and most of those niche brands are now foreign-owned, but those are different issues). Fourth, even with this resurgence, it's only around 2% of the UK economy and 5% of exports -- no pillar here. Fifth, the comment about Europe in dire straits is indeed relevant because much of the UK auto manufacturing growth has come from foreign manufacturers shifting production from mainland Europe to the UK, presumably because the UK government and financial sector are seen as more stable and having a brighter future than old man Europe. All in all, I think it's an outlier.

It's not that western auto industries are doomed, it's just that the opportunities are limited, and I wouldn't bank on Australia being able to base manufacturing growth on cars.

 

[Ducatiboy stu]

Its a fact that manufacturers will find the cheapest place to build cars. But what tends to happen is as the worker start to realise they should be paid more the manufacturer just moves to the next country with lower costs. China will eventually become to expenses and the manufacturing will shift. Africa is the new asia, and manufacturers are already looking there. GM did the same with Mexico. When the mexican workes saw they where being screwed and the labour rates went up and GM reduced manufacturing and found somewhere else.

 

[wide eyed and legless]

I watched a doco about Nissan in the nth east of England it had the highest production rate in all of the Nissan factories, some one this morning was on t.v saying that the sickies after Australia day was the straw that broke the camels back for Toyota here, ******** I know.
The other thing is if we start putting tariffs on imports other nations will do the same to us, I agree that England is booming at the moment even out stripping Germany but the rest of the world is still struggling and it will for a long time yet, America got their financial recovery wrong and everyone else pays for it.
The few good years we went through was because we were hanging on to the shirt tail of China and China can't recover until the rest of the world starts to recover, we are in for a rough time now.
Manufacturing has been in decline here for years lots of small businesses have gone, now the bigger ones are getting out, the next will be Qantas to go to the wall.

 

[tavas]

I think its pretty naive to suggest this is solely a Liberal or Labor fault. There is no one single reason why manufacturing is dying in Australia. Is a combination of internal and external factors. Do you think policy of either party is THAT much different? Its either centre left or centre right. Neither one really messes with core economic drivers, they play with emotion led sound bites which play on the 30-40% of swinging voters.

World economics do not revolve around our 3 year election cycle, despite what you read/see in the media (Murdoch or otherwise inspired).

Car manufaturing is dying because Ford/Holden refused to change to market conditions, coupled with high Aussie dollar and high local costs, and a small local market (read Falcon and Commodore), and restrictive policy from American head office (export Commodore to be badged as Pontiac to protect local Chev brand, no left hand drive Falcon for export, OneFord branding etc). Toyota is not immune to this either - they have had quality issues by trying to outsource manufacturing to low cost countries. And that hurt brand reputation as Toyota were always considered benchmark for low cost, high quality.

Australian car engineers/engineering is considered world class, its just that we've never had a big enough locla market to force it globally. The Zeta platform on which the VE Commodore/Comaro is based is considered to be an excellent chassis, but GM didn't want to impact on Corvette sales so put it under the Comaro. The VE Commodore is a better handling car vs Comaro (based on admittedly small sample selection of reviews I have read). GM rebadged Commodores as Pontiac GTO's becaue they were protecting Chev initially, but the GTO badge is an emotional badge (just like GT HO), so Americans didn't warm to the idea of a foreign car branded as GTO. Would this have made much of a difference on the decision of Holden to end local manufacturing? Probably not, but certainly doesn't help.

European car makers also outsource manufacturing to low cost Eastern European countries so that helps to keep costs down. BMW makes 3 series cars in South Africa.

Rudd may have been steering the ship during the GFC, but he also had a good tail wind and favorable currents to help him - low Aussie dollar coupled with high demand for resources by China in the lead up to 2008 Olympics, good economic base to start with. Creating an expansionsary budget by going into deficet isn't revolutionary economic policy - its pretty standard economics 101. But was also led by bad management of inefficient programs - pink batts and funding school halls when none were needed. And even though Abbott wants you to belive our debt is horrendous (it isn't), we still have to pay it back some day, so borrowing to spend your way out of recession has its drawbacks.

My 2.2c (+ GST)

 

[pedleyr]

Thats the problem, economic greed drives local companies to want to export, the government needs to make deals with other countries to allow that, so we import stuff from others....world economy.
Problem is the majority of those countries involved live at a standard that I don't wish to but I have no choice because that is how it will become for everybody. We will end up like the worker in Bangladesh, harder , cheaper, longer.
Anybody that wants to argue any other point on the end result of world economy is having themselves on.

We can't produce everything we need (electronics for example) and we can't consume everything we produce (iron ore for example). Trade solves the problem.

Protectionism has long ago been debunked I'm afraid, it definitely does not lead to increased economic prosperity.

Why should people in Bangladesh be deprived of the ability to better their standard of living? What, just because we want to maintain our early mover advantage and refuse to up skill or diversify?

 

[sb944]

Australian car engineers/engineering is considered world class, its just that we've never had a big enough locla market to force it globally. The Zeta platform on which the VE Commodore/Comaro is based is considered to be an excellent chassis, but GM didn't want to impact on Corvette sales so put it under the Comaro. The VE Commodore is a better handling car vs Comaro (based on admittedly small sample selection of reviews I have read). GM rebadged Commodores as Pontiac GTO's becaue they were protecting Chev initially, but the GTO badge is an emotional badge (just like GT HO), so Americans didn't warm to the idea of a foreign car branded as GTO. Would this have made much of a difference on the decision of Holden to end local manufacturing? Probably not, but certainly doesn't help.

My 2.2c (+ GST)

You couldn't force a Commodore globally, it's a tank compared with Euro family cars. It chews up their expensive petrol, and is far too big on their small windy roads. Americans should like it more, but I think American cars are butt ugly, and they probably think the same about ours, not to mention they have some pride in local brands. Commodores are built for Australians, not for the world, so of course the buyers are going to mainly be Australians.

 

[tavas]

You couldn't force a Commodore globally, it's a tank compared with Euro family cars. It chews up their expensive petrol, and is far too big on their small windy roads. Americans should like it more, but I think American cars are butt ugly, and they probably think the same about ours, not to mention they have some pride in local brands. Commodores are built for Australians, not for the world, so of course the buyers are going to mainly be Australians.

I agree. We don't have enough local demand to make the unit cost cheaper and more attractive. For example, Hyundais handle like crap, but are so cheap you forgive the ride for a car which comes fully loaded over a local made car. If our unit cost was lower we may have been able to defeat other markets with sheer numbers.

You are right about large size car and innefficient motors though. Hence my comment about GM/Ford not adapting to customer demands.

There are markets for our cars (South Africa, US, Middle East) but we don't have the volumes to sustain breaking into those markets.

I've owned mainly Holdens for years, but was always amazed at how they played catch up in terms of options etc. For example, Falcon brought out CD players, Bluetooth, GPS before Holden ever did. And Falcon was behind Hyundai, Toyota etc so Holden was way off. Trim and fit of interior was always average. But they drove well and I forgave the fuel economy in favour of supporting local.

One of the best cars I ever owned was an XF Falcon wagon. Motor had done over 300,000 kms when the speedo went and was still strong as an ox. Spent more on replacing door handles than i did on the motor though. Which says it all. Good concept, executed badly.

Having said all that, Euro makers get a much larger injection from the Gvt than we did. We put something like $18-20 per person into our auto manufacturing industry whereas Germany spends something like $200/person. So no matter what you do, it will be hard to beat them apples.

Like I said, more than one single factor.

 

[stm]

Why should taxpayers support failing businesses? (How do you anti-business lefties feel about having your taxes being diverted to evil capitalists?) Surely we should be supporting successful, growing businesses as the way to reduce unemployment.

How do we do this? By reducing costs and regulations on business eg, red tape, green tape, high energy costs, union restrictions, payroll tax, land tax on factories, rules, rules, rules, and allowing free trade, freedom and choice.

 

[yum beer]

B. Though I utterly loathe the idiotic free market idolatry of many in the right wing, ...

1. Greed is not the problem -- it's a parameter, i.e., an unavoidable constraint, because humans are involved. Telling humans not to be greedy is like telling the sun not to shine.
Parameters and constraints have bounds, they are not endless....the greed of capital is neverending. You've made a useless point.

3. Isolationism is a dead end now more than ever, however morally upright it may sound. Australia could in theory be self-sufficient, but it would also be pretty poor. The world economy is as you describe because rich people would rather pay less, and there are still poor people willing to take less money to make **** for them. But those rich people were rich before the majority of those jobs were shipped off to Bangladesh, so no, I'm not having myself on.
Yes, those rich people were rich before shipping jobs off to Bangladesh...wasn't that enough for them. Aussie's had jobs, rich pricks were rich. NO. They need to make more money...greed...... Yes you are having yourself on.
How much did you pay for your copy of 'world economy is good for you'.

 

[yum beer]

We can't produce everything we need (electronics for example) and we can't consume everything we produce (iron ore for example). Trade solves the problem.

Protectionism has long ago been debunked I'm afraid, it definitely does not lead to increased economic prosperity.

Why should people in Bangladesh be deprived of the ability to better their standard of living? What, just because we want to maintain our early mover advantage and refuse to up skill or diversify?

You have fallen prey to the Industrial Capitalist....

We can make everything we need, including electronics, we don't because we can't compete with cheap imports
If we can't consume everything we produce then we are producing too much...I'm sure there are mining companies with plenty enough money to create a nice electronics industry in our country.

Protectionism, isolationism, banana republicism...whatever you want to call it has only ever been debunked by the fat rich pricks who aren't happy with economic prosperity, your own words hail the problem....
increased economic prosperity. Why do you need to increase economic prosperity....I for 1 am happy with plain ol' prosperity.

I am not against the people of Bangladesh or any other country increasing their standard of living, hell good luck to them, but if we want to diversify and upskill we need to be doing for ourselves not buying the cheap results of others.

The biggest problem I see is that we have been fed the ******** of industrialism and consumerism for so long we no longer feel offended by it.
I'm sorry I'm offended everytime I enter a shop and have to be subjected to more and more products being made in horrendous conditions by the poor of the world while rich pricks increase their profit margin and kick more and more aussie into the jobless gutter...but don't worry I'm sure it will turn out ok.

 

[Ducatiboy stu]

Sorry...but just not buying this " Commodores/Falcons" are gas guzzlers. My ex and I bought an a car with 3lt v6 and it used more fuel than my commy work wagon. Then latter an ex gf bought a CRV with a 4cyl. Damn thing used slightly more than my work commodoor. Just because a vehicle might be big doesnt mean its a petrol guzzler. I was easly able to get 9.5l/100km which is pretty good. Sure not as good as a prius bot not that far behind than smaller 4cyl cars. And as for the newer v8' they are very ecomomical if driven sensibly.

 

[wide eyed and legless]

I was under the impression all the industrial capitalists live in China, the only way we can compete in manufacturing in this country is with a substantial drop in wages and then backdate it.
When China does start to recover doesn't mean we will be sweet again, America is on the sideline with its massive gas resources ready to undercut us, and the same with their coal.
If we don't have economic prosperity how are we going to fund schools and hospitals, they are in dire straits as it is, if you go to a hospital it would be more than likely that the person looking after you would be from overseas, whether it be nurse, doctor, surgeon, anaesthetist or specialist.
Should their wages drop they will be off to somewhere where the wages are better, you might think that goods we are buying from developing nations are horrendous, but to those people they are in luxury and can put food on the table, 2012 saw 70,000,000 Chinese people going on overseas holidays, we may have to get Hogan back and do another tourist ad "Throw another prawn in the wok"