Sarah Palin

What Really Killed the Australian Car Industry?

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• published: 26 May 2014
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Here's why the Australian car industry really died: Ford, Holden and Toyota blame everyone and everything (except of course themselves) for the demise of local car making. The Federal government blames the opposition, and vice-versa. And the Victorian and South Australian governments blame the feds. It's all buck-passing BS. Here's what really killed car-making Down Under: Ford had the audacity to throw a multi-million dollar VIP and media party at Fox Studios following its announcement to pull out of making cars here. General Motors actually saw fit to promote former Holden Boss Mike Devereux to a nice, cushy international job after being a good boy and overseeing the execution of Holden's factory, and essentially signing off on the blueprint to transform the red lion into Australia's third South Korean car company -- the one without the five-year/unlimited kilometer warranty. Mr Devereux had form -- he'd been very good at firing people for GM previously. Toyota: Well, the world's largest carmaker had more then enough cash to keep its Altona operation in Victoria cranking out Camrys and Aurions for Australia and the Middle East until the end of time -- Toyota merely decided it didn't want to make cars here any more. Time to lose the jingoistic patriotism. Ford, Holden and Toyota are as authentically Australian as McDonald's. These are multinational companies with practically unlimited resources. They can do whatever they want. Backing out of making cars here was simply a morally bankrupt choice that they made. They squandered your investment in them. Basically, they pissed your money up against the wall, and they want you to move forward as if this is not a slap in the face. Let's do a little experiment: Put your hand up, if you're one of those outraged, tragic idiots bemoaning the demise of this lame duck industry that refused to float despite the armada of lifeboats you, the taxpayer, floated in its direction. Now, put your had down if you actually bought a brand new, Commodore, Cruze, Falcon, Territory, Camry or Aurion in the past five years. Has to be a brand-new one. Used doesn't count. Have a look around at all those hands still in the air. The non-buyers of the product. That's the real problem -- all you so-called patriots who lacked the financial cojones to put your money where your mouths are, and actually buy the product. The business plan for a car factory is very simple. Two steps. Make cars. Sell cars. It all hinges on people actually buying them. All three car companies have blamed the sky-high Aussie dollar, the low five per cent import tariff, the high cost of Australian labour and the free-trade agreements with Japan and South Korea. Also cited have been market fragmentation, unions and reverse economies of scale as volumes dwindle. Last time I looked, Ford and GM were (notionally) American, and Toyota was (notionally) Japanese. The free-trade agreements are a net benefit to all three companies. For those of you who want to make this into a political football, it's not a lack of government support that killed this industry. It's not the Coalition and it's not Labour. $4.5 billion in taxpayer support over the past 12 years -- with both sides of politics kicking the tin -- that's more than enough time and money to float just about any boat, no matter how decrepit or how much water it's actually taken on. If you throw $4.5 billion at anything, you can fix it. If you ever investigate anything, listen hard for what's not being said. That's always the key to the truth. It's what the manufacturers didn't say here, that gave the game away. Holden, Ford and Toyota did not say: 'We've made mistakes.' They didn't say 'We got the product wrong'. And they did. Monumentally wrong. Big mistakes. They did not say that. Best Commodores and Falcons ever. Sure. No argument. However, Aussie buyers increasingly increasingly didn't -- and don't -- want the cars that these clowns chose to make. With your money. It cost the taxpayer $2.2 billion to see Holden fumble the ball on Commodore. Commodore sales fell from 88 thousand in 2002 to 27 thousand last year. It's like a decade-long train wreck in slow motion. Toyota got handed $1.2 billion over 12 years to kill Aurion sales. They dropped from 22 thousand in 2007 to under 7000 last year. 66 per cent down. Ford got $1.1 billion from you to effectively euthanize the Falcon. Sales died in the water, down from 73 thousand in 2002 to just 10,600 last year. Car companies call it 'co-investment', which implies consent ... even a reasonable return. The truth is far less palatable. It's extortion: money for jobs. A threat. Gun at your head, Government; pay up. It's a protection racket. The mafia does business this way.