TBM, we can and do compete in manufacturing in the high value added sector. Where we cant compete is in volume manufacture of low value add items.
There is world wide over production of cars for the simple reason that a car industry underpins the other critical sectors of an advanced economy.
I know quite a few guys who are doing very well thank you, but of course they don't bleat to the media about how much money they are making.
As for GA, they were cut down by government indifference and CASA bastardry plus a good helping of USA industry "protection" anyone remember what happened to Victa? The GA labour force were cheap - moccasin wearing denizens of Moe many of them who were glad of a job.
The Government indifference part is rather the problem of "received wisdom" - of which the public service is full of:
Some examples:
"There is only room for Two domestic airlines and One international one in Australia".
"Australia cannot build cars because we have no economy of scale".
"Australia cannot manufacture aircraft".
"Australia cannot manufacture ships, tanks, missiles, defence systems and submarines".
Of course in defence of the received wisdom, anyone who has the temerity to propose, let alone challenge the received wisdom is destroyed if possible and any successful demonstration of actual production and performance is explained away as an aberration and any failure is pounced on.
The net result is that Australian industry rarely gets far enough down the learning curve to profit from hard won experience. The "Nomad II" would have been a cracker, as would the next generation submarine after the Collins class. The MEKO frigates were built on time and on cost at Williamstown as were the Oliver Hazard Perry class destroyers - which were better quality than the American version.
CAC turned out better quality engine components than GE, including turbine blades. There are other companies that have bettered anything the yanks and Europeans have made, the problem is mindset in the public service and a financial system that rewards real estate speculation rather than manufacturing.