Car manufacturers bailing out of Oz...

[Harry P.]

...whoever wrote the article saying it was low quality obviously didn't have a clue what they were writing about.

Did you actually read the article?

No mention was made by anyone regarding quality. The cost of manufacturing in Australia is the primary reason for the halt of manufacturing there.

Neither GM or Ford are pulling out of australia...

They are both stopping manufacturing in Australia.

[checkmate]

Harry I was referring to the articles ZTony8 mentions on page 1 of this thread, I tried quoting him but cant quote on here lately for some reason.......

[zenrat]

I remember reading items over the years about the low quality level of the Australian built products coming into this country.Perhaps this was a factor in the decisions.

From what i've heard it's the other way round. The low quality levels are in the US made cars that get exported. Every time Top Gear test anything American Clarkson always comments on the cheap feel of the interior and how badly the interior panels fit.

Edited December 21, 2013 by zenrat

[Luc Janssens]

Too bad, I have a book in my collection on the development of the Holden Commodore "Project VN" got it while still working for GM.

Got a few brochures from the kind people at Holden too, lost all contact due to not having access to the GM intranet.

Know how they must feel, went thru the same with the Antwerp plant closure.

Oh well...there's life after auto-manufacturing and development, but won't be as much fun.

Luc

[Luc Janssens]

Someone here has the cost breakdown of a automobile?

Cuz don't think the wages are the dominant factor.

Prove me wrong ;^)

Also looks like Toyota thinks long term vs short term like US based companies, one of the reasons Opel does so poorly is because in the '90s GM hired a Spanish cost cutter who, squeezed out parts vendors like a lemon, so that Opel ended up with lemon cars, once it's public knowledge that profit goes before product (every one knows of those cheap Chinese toys which disintegrate when out of the blister packaging, the equivalent of GM back then) then consumers go elsewhere, hence the success of product from the far east and premium brands, trying to get those customer back, is next to impossible, see what happened in the US,

BTW I think VW is still grateful for that GM lawsuit, in the end it saved them from stepping into the same trap as Opel.

Edited December 21, 2013 by Luc Janssens

[weasel]

GM sacrificed Saturn for Buick...all the new Saturns [Opels/Holdens] went to Buick to keep them alive... the ONLY reason Buick is still here is the $$$ they get in China, Buick sells more in China than the US...!!!

[lordairgtar]

Someone here has the cost breakdown of a automobile?

Cuz don't think the wages are the dominant factor.

Prove me wrong ;^)

Also looks like Toyota thinks long term vs short term like US based companies, one of the reasons Opel does so poorly is because in the '90s GM hired a Spanish cost cutter who, squeezed out parts vendors like a lemon, so that Opel ended up with lemon cars, once it's public knowledge that profit goes before product (every one knows of those cheap Chinese toys which disintegrate when out of the blister packaging, the equivalent of GM back then) then consumers go elsewhere, hence the success of product from the far east and premium brands, trying to get those customer back, is next to impossible, see what happened in the US,

BTW I think VW is still grateful for that GM lawsuit, in the end it saved them from stepping into the same trap as Opel.

Don't know about the cost breakdown per car but Australia heavily subsidizes the auto industry there. Holden gets A$1.8 billion, Ford gets A$ 1.1 billion and Toyota gets about A$1.1 billion

[1930fordpickup]

They are all going to world cars . Soon you will get the same model in different places , the big difference will be left hand or right hand drive.

[checkmate]

One article I read mentioned that after our current Holden Commodore(your Chevrolet SS), the next one will be built in China and in an attempt to make it cool it will be a different shape, front wheel drive and 4 cylinder............

Yep great research there because nothing screams cool to an Australian like a Chinese built, FWD, 4 cylinder.

[Sport Suburban]

It is a world market and this is a reflection of that. All businesses are in business to make money. None of them intend to lose money reguardless of what they sell or do to get it. If you can manufacture something cheaper someplace else would you. Every move has its pros and cons, so who's fault is it that the costs are so high. Look at Detroit, that city is bankrupt and was the auto Capitol of America.

[Funkster]

charlie8575; You tell me what to do then, Companys making billions, Ceo's and top Exec's making millions, and labors working two to three jobs to just put food on the table and have a place to live? Corpate greed and a Goverment that thinks its ok and helps distroying unions? Just take a look around and see what Corparations and the rich have done to the labor class with there desistions? And you can take this one step further, what does the Bible say will happen to the people with wealth and power that make the desistions to pray on the less foritnate? just food for thought?

[charlie8575]

One article I read mentioned that after our current Holden Commodore(your Chevrolet SS), the next one will be built in China and in an attempt to make it cool it will be a different shape, front wheel drive and 4 cylinder............

Yep great research there because nothing screams cool to an Australian like a Chinese built, FWD, 4 cylinder.

I hope that's not true. If it is, talk about a loss for us all, and "made in China" inspires no confidence in me whatsoever.

At $43,000, the new SS is quite expensive, and I'm wondering how well it'll sell (we're talking Chrysler 300-C territory, and solidly at the middle of both Cadillac and Lincoln's price structure). To me, that's like shoving a 4-cylinder engine in the Impala, like they're now doing with the 2014 redesign, and keeping the V6 only available for the LT and LTZ (middle and top-level) trim. I thought it was bad enough to put the name on a front-wheel-drive clone, but this is crazy.

Side-note: having seen several of the Australian-built cars up close, I have nothing but good things to say about the workmanship- well-built, nicely-finished cars.

Charlie Larkin

[Slapfight]

No matter what you believe politically, or in regards to what the minimum wage should be, etc., you have to agree that if a company thinks it can make their product as a lower cost elsewhere, they're going to do so. That's just plain common sense. Yes, the bottom line is what counts for any business... and if you believe in the concepts of free enterprise and free market capitalism, you can't demonize a company for making a move that improves their bottom line! Yes, there is always "collateral damage" when an employer packs up and leaves... some people will lose their jobs and there's no way to avoid that. But think of it this way: does any company have a duty or obligation to set up operations in your country and provide jobs to your people? Or do the employees owe the company a "thank you" for operating in their area and offering them a job?

This is exactly the reasoning why so many things are (cheaply and terribly) made in China now. Bottom line, though, right?

Edited December 22, 2013 by Slapfight

[Helix]

My thoughts go out to all the people who work at GMH, Ford (Toyota eventually) and to all the suppliers. Job losses are quite significant, so tough times ahead for the majority of these folk.

Retraining has been announced for these guys into other sectors such as the resource industry, other manufacturing, defence etc.

In the meantime, I will keep driving my Holden, an Aussie Icon

[Harry P.]

This is exactly the reasoning why so many things are (cheaply and terribly) made in China now. Bottom line, though, right?

If you owned a company, you'd look out for the bottom line too. It's what company owners do. Companies are in business to make money. They are not charities.

That's how capitalism works, like it or not.

[lordairgtar]

If you owned a company, you'd look out for the bottom line too. It's what company owners do. Companies are in business to make money. They are not charities.

That's how capitalism works, like it or not.

If that was the attitude of my company owner, I'd be unemployed and the company would no longer exist. The owners have not taken a salary for two years now to keep us in business. We make things for other companies that have seen hard times. One thing we have been doing is repairing the junk these same companies have had made in China. We are starting to get these customers back and getting those outsourced jobs back. We are finally seeing an increase in orders. It's slow, but it's getting better. Just so you know, my owners are quite conservative and stand to right of center, but they also see in us workers, value. Might not be making huge money because of outsourced competition, but we are proving that better product is worth the price.

Edited December 24, 2013 by lordairgtar

[Harry P.]

If that was the attitude of my company owner, I'd be unemployed and the company would no longer exist. The owners have not taken a salary for two years now to keep us in business. We make things for other companies that have seen hard times. One thing we have been doing is repairing the junk these same companies have had made in China. We are starting to get these customers back and getting those outsourced jobs back. We are finally seeing an increase in orders. It's slow, but it's getting better. Just so you know, my owners are quite conservative and stand to right of center, but they also see in us workers, value. Might not be making huge money because of outsourced competition, but we are proving that better product is worth the price.

I don't know what company you work for, but obviously they are an exception. Most companies do not operate as charities.

[Bernard Kron]

As strong as the Aussie dollar is, I've been surprised it took this long for this to come up. It's all about share holder value, whether a company is publicly traded or privately held. Companies will always chase the lowest overall final cost. Global corporations in particular have become highly skilled in squeezing costs out of workers and governments wherever they operate. For domestic US companies competing with foreign companies their salvation will come when the costs embedded in quality and distance turn the equation around and they can once again operate profitably. The owner's of lordairgtar's employer obviously think they can tough it out as their customers do the math and discover they can lower final costs by sourcing domestically.

In the meantime the auto industry, worldwide, suffers from huge overcapacity. In Europe Fiat, Opel and Peugeot are all on the ropes, Saab is gone and Volvo is owned by a Chinese company and struggling for survival. In the US some observers are beginning to question whether Chrysler and GM will make it, and US dealerships' inventories are back up to 2008 levels as all the major manufacturers are once again engaged in channel stuffing and agressive discounting. Many auto loans are now out to 7 years as the price of cars march ever higher. In Japan it's been Nissan that's been in trouble for years, now. As is clear from the article, even Toyota is feeling the squeeze.

The contradiction in all this is that the foreign factories rely on markets in the developed countries to pay for their operations. In a globalized world it doesn't matter who actually owns those factories. So, if GM and Ford manufacture the next generation of cars in China and the workers in the USA, Japan, Europe or Australia they layed off can't earn the same wage working elsewhere, GM and Ford will ultimately lose customers, and the costs of operating those Chinese factories will be less likely to be covered. At some point the trend reverses, usually through protectionist policies but hopefully through fair currency alignments (like America in the 1800's and in Asia the Japanese and Koreans before them, the Chinese agressively suppress the value of their home currency). Until industrial corporations associate the loss of their home markets with the decline in domestic worker's real wages, it's doubtful they will do anything to preserve their factories there. Meanwhile in China semi-skilled factory wages are rising by as much as 10-15% per year and the Chinese are finally having to face costs they have long ignored, such as rising urban housing prices, health care, environmental impacts and pensions. So we'll see how long they can remain competitive... Global corporations have already established beach heads in some of the poorest and most unstable countries in Central Africa in the hopes of eventually capturing efficiencies based on the low wages and land cost in that part of the world.

Edited December 24, 2013 by Bernard Kron

[peekay]

That's a concise and well-worded global overview Bernard.

[charlie8575]

That's a concise and well-worded global overview Bernard.

I agree.

Charlie Larkin

[hpiguy]

If that was the attitude of my company owner, I'd be unemployed and the company would no longer exist. The owners have not taken a salary for two years now to keep us in business. We make things for other companies that have seen hard times. One thing we have been doing is repairing the junk these same companies have had made in China. We are starting to get these customers back and getting those outsourced jobs back. We are finally seeing an increase in orders. It's slow, but it's getting better. Just so you know, my owners are quite conservative and stand to right of center, but they also see in us workers, value. Might not be making huge money because of outsourced competition, but we are proving that better product is worth the price.

Owners don't have to draw salaries from the company. Many owners pay themselves nothing, or very little. Everything they buy goes through company accounts instead so they can write it off as business expenses.

In fact, not taking a salary is a way of escaping personal income taxes, which means you and I have to pay more from our income to make up the difference.

[lordairgtar]

I don't know what company you work for, but obviously they are an exception. Most companies do not operate as charities.

I work for Custom Wire Industries. We make wiring harnesses for other companies that need such a thing. Our biggest Customer is GE, and since they just bought Waukesha Engines from Dresser, it's even bigger because both were our customers. The owners are not running a charity, they like what they do and value the workers almost like family. I have to agree that they ARE an exception, but more should be like that.

Owners don't have to draw salaries from the company. Many owners pay themselves nothing, or very little. Everything they buy goes through company accounts instead so they can write it off as business expenses.

In fact, not taking a salary is a way of escaping personal income taxes, which means you and I have to pay more from our income to make up the difference.

True, most buy things like trucks and cars in the company name. My bosses have other income from leasing space in a couple of buildings, so at least they are getting an income.