Exit The Auto Makers

Going … Going … Gone!

It had to happen. Nissan … gone (in 1992), Mitsubishi … gone! (in 2008),  Ford … going!, GMH … going!, Toyota … going! 

jenga falling

And why not? As I understand it, $12bn (that's billions) of taxpayer money has been gifted to the auto industry in the past 20 years. That's an average of $600m annually!

THAT is a whopping subsidy. But five car manufacturers for a small market? 

It was not sustainable. Industry Out Of Gas so says Business Spectator. Go to the link that contains a Productivity Commission Report of 2002.

This older ABC News report is also illuminating.

red currency dollar

What about a stake-holding?

If I owned a manufacturing business (which I don't) that was handed a pile of money, I'm sure my donor would have demanded a stake in the business - a share holding. And that has been the problem in Australia of governments not taking a stake in the auto industry when it (the industry) was given massive handouts. 

Why couldn't governments, acting on our behalf, have become a stakeholder? So that at least when the business folds there's an opportunity to have a say in what happens - not only with the assets of the business, and a potential future, but also with the employees. And perhaps to recoup a portion of the investment.

Political and economic ideology would never countenance such a situation - it would be too much like "socialism”! Both Labour and Liberal have been tarnished with similar positions about stake-holdings. They just don’t do them!

And they’ve never said why. It makes you think doesn’t it?

But, here's the big rub.

A Missed Opportunity?

Back around 2001 - it could be later - I recall a flurry of discussion about electric vehicles (EV's) as a commuter for the bulging Australian cities. Urban sprawl is an Australian characteristic.

A few years later, there was a move to import the Indian-made Reva EV, but it was knocked back because the vehicle couldn't comply with Australian Standards.

The opportunity to manufacture an EV that could be sold to the domestic market  - and to ease congestion in Australia's bulging cities - didn't get the inertia it needed, unlike the fossil fuel car manufacturers that received about $600m annually in subsidies. 

What would that sort of money have done for the EV manufacturing industry?

Why couldn't governments have taken a stake in that?

As it is today, EV's in Australia are just fleas on a dog's back. Just an idea that enthusiasts were running with. No local manufacturer wanted to touch it.

Swimming against the tide was the Blade Runner, but that has now morphed into Electric Vehicle Corporation Ltd.

The Australian Electric Vehicle Association is a good place to stay in tune with what's happening on the EV scene. And so is this one - AEVA Adelaide.

For a list of imported EV's, the NRMA site has a useful list.

Are these questions valid?

So, what has been the root of the problem for the auto industry?

  • Is it Australia's generally negative mindset about EV's for cities? 
  • Is it because of Australia's transition to a service-based economy?
  • Is it because governments have been all to willing to prop up manufacturing but haven't been prepared to take a stake in the business for mutually beneficial outcomes?
  • Is it because of the stupid "level playing field" - otherwise known as free trade agreements - that Australia thinks it has to have with the rest of the world?
  • Or is it because the economy is now all grown-up and it's time to hand over those menial car assembly jobs to developing countries?

It could be all of these questions whose implied answers are the problem. 

Transition is a continuum particularly in a capitalist economy. Capital will keep moving around from one investment to another seeking to maximise its gain. That's the nature of the capitalist beast!

Australia will get over the loss of auto manufacturing, just as it did with the closure of clothing, footwear, Pelaco shirts, and Onkaparinga blankets, and whatever else that disappeared in the late 20th century. 

But will it embrace a new age of auto manufacturing for the 21st century, one that's based on electric vehicles? One that is sustainable? I don't think it's likely.

Have your say.

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