It’s the beginning of a somber era for Australian automotive manufacturing. Although the Holden Commodore will stick around for one more year, the nameplate’s arch rival was de-winged yesterday.
The final Ford Falcon, an XR6 sedan, rolled off the assembly line at the brand’s Broadmeadows manufacturing facility, according to Ford Authority. The Falcon XR6 sedan will sit alongside the final Falcon ute as museum pieces and testaments to 91 years of Australian manufacturing.
For decades, Ford versus Holden has become a staple rivalry in Australia through motorsport and die-hard fans of each rear-wheel drive sedan. Both the Falcon and Commodore have long been touted as vehicles built for Australian conditions, by Australians, leading to years of success.
The shutdown overshadowed Holden’s news of the final locally-produced Cruze leaving the brand’s Elizabeth assembly. 880 workers remain at the Holden facility, which will produce the Commodore sedan, ute and sportwagon until fall of 2017.
While there’s no denying we’re Holden fans at GM Authority, there’s also no denying the impact Ford and its Falcon made on the Australian motoring landscape for many, many years.
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… and of course that would be Holden manufacturing closing in the SPRING of 2017.
Why are GM and Ford ceasing production in Australia?
Cost: Labor, currency fluctuation, the government not giving enough kick back incentives (like the Canadiens do with tax/direct aid).
This could have been avoided but the conservative gov would not pay. They took a long view of the Oz economy.
I also think that GM likes to cluster manufacturing: Germany, China and to a lesser degree and only for the time being S Korea. Australia means a long shipping trip with no upside benefits.
The reality is this is a small market and with the global means available it is cheaper to ship cars in from elsewhere that are build in greater numbers for more markets.
While it would have been nice to save the jobs with government money it would have only come back as it would not have solved the problem that created this in the first place. This was not like the bail out of GM here where GM has a chance to make it on their own. Down under they would have pumped money in and then they would continue to ask for more as it is difficult to export limited production cars else where. Now if there was greater demand for RHD models in some near by market it would have helped.
It is mostly about limited market and isolation of the country from other markets that could help.
Even here the expected numbers of many models are now becoming dependent on global sales. Development cost are so high you have to sell a lot of cars to make money and pay employees.
Even if the government had given them the money how much more and how long would they continue to do it?
Then add to this the Falling sales of the Falcon and Commodore it makes it much more difficult to keep them in production or updating them. The FWD cars can come from other plants building 3-4 times as many and be built at a lower cost even if you count the shipping into country.
It is nothing personal but more a case of location and volume vs Development cost in a global market. The way of doing business is changing for all of us even in the large markets.
It is either change the ways of doing business or the risk of fading away. We have yet to see the last merger or last automaker fail.
It’s all about a non-supportive government that can’t see the big picture and poor negation skills on free trade agreements.
It is far more complex that what has been covered in these blogs. International Free Trade Agreements are just one facet. It involves the encumbered government willingness to subsidy the industry. Ford and Holden confirmed future models would also virtually be CKD assembled. It’s a very sad day for the automotive sector, particularly the supply chain manufacturers which little news has been shared over their plight.
I believe other world markets will experience the same fate. China will be a major player in the near future. There are currently too many manufacturers and there will have to be a global rationalisation very soon.
Many would agree that the end of auto manufacturer in Australia is a hidden cost of free trade.
Ford and Holden only committed themselves to local production due to the old tariff system that protected the nation’s vital industrial base as well as jobs.
Now that the nation’s economy is based on the export of natural resources expect more Australian industry to shutter which is bad both economically and in the event war when, obviously, a heavy industrial base is vital.
This is Australia’s punishment for allowing open access to it’s auto sector and there is little excuse for the government’s actions in this race to the production bottom .
There was a remarkable piece of TV news in AU. On the Ford closing day a big guy who’d worked at the Ford plant for years was outside the factory with a huge Ford flag and crying his eyes out. At the end of the news clip we see him tie the flag to the back of his Toyota ute and drive off into the distance. Perhaps just one of many reason the Ford plant closed !!!
Well first off the government subsidies are no way to save a industry. Once you start to pay in when do you stop? We see this with farms and other industries today. It is a form of corporate welfare.
The other issue is most government will not address the real needs as they are all into this free trade and open boarders BS anymore. They just released a bit on Hilary Clinton claiming behind closed doors to Wall St people that she is all for this while her public stance is against it. I suspect she is far from alone with the actions of all those in DC Dem and Repub.
I am afraid there is some global walking orders and many are following what they are being told what to do.
I am not a conspiracy kind of guy but with all that is going on and how the media refused to cover it I feel we are all being taken advantage of.
Here is the real issues. It appears those in high places are interested to get everyone into the game be it 3rd world to 1st world countries.
Second Tariffs are nice on paper but this can turn nasty real fast for a country that wants to isolate.
Third many countries can no longer isolate themselves as they can no longer support their needs internally anymore.
Finally when it comes to consumers they all want to play nationalistic but in the end they chose with their wallet. While we can make some things here yet people will not buy it because of the cost. We have things like $399 big screen TVs from China today and if made here they would be twice that. Most people will not pay the difference even for their own country.
Then if you raise wages to cover the added cost then prices just go up again.
Finally if you control prices and profits then share holders go overseas and your companies fail.
This chain can go on and on.
At some point there are going to be some ugly changes in this world and some of us that are doing well now may not be all that well off and at this point I am not sure it can be stopped.
Then you add in how they are now charging for everything. We pay for water that used to be free. TV is now paid if you want more than a local channel. Even radio is controlled and be charged for.
I suspect that much of this autonomous car stuff will lead to more control of where we go, when we go and how much it will cost us.
While many things in the future are bright there are many things that we will have to pay the price for in the future.
Scott-The West, and especially the US lived well when tariffs were in use. Protectionism made America the world’s workshop, and those were our wealthiest and most powerful years. Today, China uses protectionism to build up vital industry.
We Americans learned nothing from Britain’s free trade model and how it weakened the Empire while enriching the US and Germany 1880- 1910. We in the West are doing much the same with the 3ed world.
Subsidies can be wise when they protect jobs as well as maintain vital (potential) war time industrial bases. A nation is sometimes wise to support vital sectors for the purpose of self sufficiency.
Tariffs work in some cases and anymore fail to work in you favor if you no longer hold all the cards.
At this point we face great tariffs in many countries like Japan were it adds much to the common car but in the case of Japan they can come here and buy land cheap and build cars cheaper in southern plants often non union and no need to pay shipping here.
China at this point has no fear of not backing down on their protectionism as they no longer fear us economically or militarily. With our great debt and much of it owned by loans from them do we have much choice.
There was much more to Britain fall just as to what we are seeing in out own. In England they have limited resources that is what has slowed Japans growth. In the United States we have limited out energy growth. We today refuse to build needed pipe lines and refuse to use all assets on energy. We have a President that is willing to sign off on Global Warming initiatives that will cripple our economic growth. There is nothing wrong with using wind and solar but we are decades from being able to support our growth on it alone.
Then come labor cost. People in this country do not want to work for lower wages. So MFG move products to cheaper plants. Now if it is kept here prices of products will go up significantly and will slow the economy with lower sales of high ticket items.
The root of the issue here is everyone wants to be a Millionaire but they still want to shop at Walmart. The reality is being a Middle Class Millionaire means little anymore as housing and other cost continue to rise.
Like raising the min wage for things like McDonalds workers solves nothing as prices will increase to pay for it. You want to help someone you help improve their station in life and encourage them to get education and help them grow so they can get the better paying job and not just hand them money. It is the old saying you can give a man a fish or you can teach him to fish. The one who becomes the fisherman will always do better.
Welfare is only a means to help not replace. We have made it a form of income. You do this to companies and they will rely on it and not work to replace it on their own moves. A bail out of some business is ok but continued subsidies just makes for a weaker company and government. A bail out is a one time deal but subsidies just go on and on and on.
We failed so long ago that things like Steel may never comeback in large forms. Same for many other assembly industries.
As for China they have the worlds largest low cost work force and people willing to work because before they had nothing. Today many live in better housing and buy cars. Much of it is with money from us. Yet why do they do it. Because consumers want the lowest price.
Then you have to factor in the major income equality factor. There is a large group of people many elected in this country on money from George Soros that want to bring down Americas wealth and is paying billions to do it. He promotes open boarders and free trade. And many of our two faced leaders are supported by him and moveon.org along with his other factors.
I believe much of the Global Change people are also people trying to just level the playing field too as they attack out industry but seldom say much to China, India and other great contributors of emissions.
This is a very complex issue and not one Tariffs will resolve.
Yes and no: Britain had near unlimited resources due to the Empire and the trading system of imperial privilege broken by Brenton Woods.
The British, like us, allowed real income to stagnate towards the end of the 19th century and, like America, allowed cheap imports to fill the void. This was great for corporate Britain but deadly to the overal nation. This has happened here, too, with real income stagnating in 1979.
Is welfare the disease or a mere symptom? Welfare benefits were extended to the population at the start of de-industrialization. Welfare isn’t vice but a means if survival for many during an age of unemployment/underemployment. Expectations about the economy were so hightened during the post-war era that I am intentionally leaving economic sectors like agriculture out of the conversation.
The minimum wagebmust be a living wage; if not, the nation state must intervene to some degree for the purpose of safe streets, small jails and common decency. Programs like wefare have never been altruistic in nature. Instead, wefare is a bribe to keep the peace with the common citizen as well as aid corporations through increasing buying power.