Mahindra leaving Australia.
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Sunfish our car industry was killed of for one reason. The cost of labour when unskilled labour was between 70 to 90k a year. The unions priced them self out of work. Once ford pulled the pin the others had no option than to do the same. A couple of great Aussie invention was power steering a small company in Sydney held world wide patents when refuse ing to sell them to TRW they just brought the company and got the lot and the electric fan produced and in vented by Davis Craig now on every car in the world. How ever they never patented it sad it that is. We can produce anything and every thing we just need political will power to do it.
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Yr right, yr only half right.
Unions are not the demons that can be blamed for the demise of the Australain car industry. look to the top of the organization, they will outsource to sierra leone and use slave if they can squeeze the margin a a little more. They cut R&D first of all then hack the heart out of the beast. Forget 'the Australian family sedan, globalization means we will all drive korean designed, thai built cars untill the chinese get their act together. Then we will be driving crappy chinese pastiches. We can only have a car industry here IF WE WANT IT. If you want a locally designed and developed car that meets our expectations and requirements, then buy one, many people do pay a little more for the optimized product. If you are happy with a Great wall ( or perish the thought a Mahindra) then you have cast your vote to kill local manufacturing capability regardless of verbalized position.
The rapacious globalized auto industry makes decisions based on more than local wages, otherwise Mercedes and VW would have disappeared many years ago. I would also dispute that these manufacturers regard their staff as 'unskilled labour'.
The plastic pickup/ ute tray liner was invented here in Aus by a guy who had to fight to get it accepted at all, and then had it ripped of by a globalized auto manufacturer despite careful and strategic business planning. At least he got a bit of the cherry on the way past. He also own a Mahindra as it happens.
We are fundamentally low volume high value manufactures who are flexible and innovative. We will never be competitive with Hyundai, and should not compare our industry(s) and market to those of the lowest common denominator.
We need more than just the will to do things, what we need here is a mature government that can accept that a local manufacturing industry has direct and indirect benefits for the country and is what keeps us from being by definition a 3rd world counrty. While our sycophantic defence forces for one will do almost anything to buy from our military partners(s?) spending many Billions just to be in the club, and then not invest locally, ignore, or worse ridicule, local products it is clear the cultural cringe is alive and well at the highest levels.
This is certainly not the case in the USA where local industry is PROUDLY supported, there are plenty of high value low volume manufacturers in the aviation industry in the USA where these industries are fostered by government and agencies, even if the imported (e.g. Australian ) products are superior.
All the will in the world is no use if when you have made your product there is no local support/customer base. in that instance why not move your company or manufacturing facility to where the market is? This has happened many times in our inglorious manufacturing history, and is doomed to happen again.
This is even worse under the current government who believe that manufacturing industry should be euthenased, we all need to take a pay cut, tighten our belts and wait for Gina Swineheart to dig up some more of the country, with highly paid unskilled union labour no doubt.
The whole thing is much more complicated of course, but charity begins at home, we should expect our elected representatives of all colours to respect the desire of the majority of Australians who really do want a local manufacuring industry, even though their buying habits do not accurately reflect this desire.
HD
Unions are not the demons that can be blamed for the demise of the Australain car industry. look to the top of the organization, they will outsource to sierra leone and use slave if they can squeeze the margin a a little more. They cut R&D first of all then hack the heart out of the beast. Forget 'the Australian family sedan, globalization means we will all drive korean designed, thai built cars untill the chinese get their act together. Then we will be driving crappy chinese pastiches. We can only have a car industry here IF WE WANT IT. If you want a locally designed and developed car that meets our expectations and requirements, then buy one, many people do pay a little more for the optimized product. If you are happy with a Great wall ( or perish the thought a Mahindra) then you have cast your vote to kill local manufacturing capability regardless of verbalized position.
The rapacious globalized auto industry makes decisions based on more than local wages, otherwise Mercedes and VW would have disappeared many years ago. I would also dispute that these manufacturers regard their staff as 'unskilled labour'.
The plastic pickup/ ute tray liner was invented here in Aus by a guy who had to fight to get it accepted at all, and then had it ripped of by a globalized auto manufacturer despite careful and strategic business planning. At least he got a bit of the cherry on the way past. He also own a Mahindra as it happens.
We are fundamentally low volume high value manufactures who are flexible and innovative. We will never be competitive with Hyundai, and should not compare our industry(s) and market to those of the lowest common denominator.
We need more than just the will to do things, what we need here is a mature government that can accept that a local manufacturing industry has direct and indirect benefits for the country and is what keeps us from being by definition a 3rd world counrty. While our sycophantic defence forces for one will do almost anything to buy from our military partners(s?) spending many Billions just to be in the club, and then not invest locally, ignore, or worse ridicule, local products it is clear the cultural cringe is alive and well at the highest levels.
This is certainly not the case in the USA where local industry is PROUDLY supported, there are plenty of high value low volume manufacturers in the aviation industry in the USA where these industries are fostered by government and agencies, even if the imported (e.g. Australian ) products are superior.
All the will in the world is no use if when you have made your product there is no local support/customer base. in that instance why not move your company or manufacturing facility to where the market is? This has happened many times in our inglorious manufacturing history, and is doomed to happen again.
This is even worse under the current government who believe that manufacturing industry should be euthenased, we all need to take a pay cut, tighten our belts and wait for Gina Swineheart to dig up some more of the country, with highly paid unskilled union labour no doubt.
The whole thing is much more complicated of course, but charity begins at home, we should expect our elected representatives of all colours to respect the desire of the majority of Australians who really do want a local manufacuring industry, even though their buying habits do not accurately reflect this desire.
HD
Agree with Harley D.
The "yes Minister" script says it all - Sir Humphrey: "Minister, this project must not be allowed to succeed without our help!".
And sadly in Australia, help is not allowed so the project must instead be killed.
I guess in a way we should be thankful. The successful international local manufacturers I know of don't have any local competition, because nobody believes what they do is even possible. For them, they focus on beating Siemens, Mitsubishi, Sandvik, GE and similar international competitors, and a lot of the time they do.
The problem for us is that their only tax effective exit strategy is to be enough of an annoyance that their big international competitor buys them, takes their technology overseas and shuts them down. You walk away with Fifty million or so and lie on a beach.
I can think of a few companies that went that way - the competitor to helicoil, a medical plastics company and the first gaming company that successfully produced an almost impossible to counterfeit poker chip. I predict ANCA will be bought out and so will our beloved Ozrunways.
I wrote a paper on the subject for Government suggesting based on my experiences that no Australian manufacturing company could or should survive unless it was internationally competitive and that the key proof of international competitiveness was the ability to export. I then suggested that change was needed in our treatment of exports, export related expenses and export income taxation.
...And it was promptly buried deep.
The "yes Minister" script says it all - Sir Humphrey: "Minister, this project must not be allowed to succeed without our help!".
And sadly in Australia, help is not allowed so the project must instead be killed.
I guess in a way we should be thankful. The successful international local manufacturers I know of don't have any local competition, because nobody believes what they do is even possible. For them, they focus on beating Siemens, Mitsubishi, Sandvik, GE and similar international competitors, and a lot of the time they do.
The problem for us is that their only tax effective exit strategy is to be enough of an annoyance that their big international competitor buys them, takes their technology overseas and shuts them down. You walk away with Fifty million or so and lie on a beach.
I can think of a few companies that went that way - the competitor to helicoil, a medical plastics company and the first gaming company that successfully produced an almost impossible to counterfeit poker chip. I predict ANCA will be bought out and so will our beloved Ozrunways.
I wrote a paper on the subject for Government suggesting based on my experiences that no Australian manufacturing company could or should survive unless it was internationally competitive and that the key proof of international competitiveness was the ability to export. I then suggested that change was needed in our treatment of exports, export related expenses and export income taxation.
...And it was promptly buried deep.
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Gm and ford both closed down car industries in other country's at the same time they did aust. They have strengthen there in country being the USA in manufacting then exporting those cars to us here and around the world. As for ford however they will continue there design sudio in vic. If you can't see that 70 to 90k for un skilled work isn't to much to be paid we'll I'm sorry you will be having what's happened. Btw that's more than most lame get yet they have to sign there life away each day.
Cheers
Cheers
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Yr right, yr rong
It is not nearly so simplistic as your union bashing solution suggests.
As someone deeply embedded in the Australian maunfacturing industry I cannot accept your facile claim that this is all to be blamed on those who actually do the work. It is much more complex and issue than you blythley elucidate.
Sunfish has a deeper understanding, although i would suggest he is as much confused as to the WHY behind the scenes as I am.
I for one do not earn the $90k you suggest is the norm, my wife wishes that i did, but sadly that does not reflect average wages, or even salaries in manufacturing.
I close friend of mine, a specialist tradesman, was recently retrenched from GMH and neither was he in the order of magnitude you suggest. He was a part of the R&D team which has gone bye bye.
As Australains we are our own worst enemy when it comes to capitalizing on innovation.
R&D is the key to innovative products and manufacturing. It is actively discouraged in this country, not just unrewarded.
Thanks for your opinions and participation inthis thread, atbleast it gets some of these common misconceptions out in the prunish arena.
Cheers HD
It is not nearly so simplistic as your union bashing solution suggests.
As someone deeply embedded in the Australian maunfacturing industry I cannot accept your facile claim that this is all to be blamed on those who actually do the work. It is much more complex and issue than you blythley elucidate.
Sunfish has a deeper understanding, although i would suggest he is as much confused as to the WHY behind the scenes as I am.
I for one do not earn the $90k you suggest is the norm, my wife wishes that i did, but sadly that does not reflect average wages, or even salaries in manufacturing.
I close friend of mine, a specialist tradesman, was recently retrenched from GMH and neither was he in the order of magnitude you suggest. He was a part of the R&D team which has gone bye bye.
As Australains we are our own worst enemy when it comes to capitalizing on innovation.
R&D is the key to innovative products and manufacturing. It is actively discouraged in this country, not just unrewarded.
Thanks for your opinions and participation inthis thread, atbleast it gets some of these common misconceptions out in the prunish arena.
Cheers HD
Last edited by HarleyD; 4th Aug 2014 at 07:39. Reason: Speeling and grandma
While the unions haven't helped the situation here in Australia, yr right is half right when it comes to wages and salaries. My brother who worked in oil and gas says a very recent survey puts Australian engineering remuneration at the top of the world heap - even in the resources industry we are uncompetitive.
But, what's driving the wages/salaries cost is our inflated housing costs and real estate costs in general. The single largest day to day expense for the entire population has been inflated to the moon by the financial sector - it's no surprise then that our banking giants are giants (by "capitalization") even among the world rankings. We have sold our domestic souls to the financiers and are paying the price for it. House prices rise and the lemmings all feel "wealthier" and cheer it on despite the fact that their existence costs have just risen...
Of course, the bureaucratic overhead of employing people is also high - compulsory this and compulsory that - but many countries suffer similarly.
The government is attempting to encourage the nation to exploit our competitive strengths. The reality is that, mineral wealth aside, we have none and mostly because we don't choose to be competitive.
So, the country with one of the lowest population densities has the highest housing costs; with the longest coastline imports most of its seafood; with the most abundant natural resources has the highest energy costs; with one of the largest collective savings and investment accounts needs foreign investment to develop.
We really are a country of contradictions, and not it a good way.
But, what's driving the wages/salaries cost is our inflated housing costs and real estate costs in general. The single largest day to day expense for the entire population has been inflated to the moon by the financial sector - it's no surprise then that our banking giants are giants (by "capitalization") even among the world rankings. We have sold our domestic souls to the financiers and are paying the price for it. House prices rise and the lemmings all feel "wealthier" and cheer it on despite the fact that their existence costs have just risen...
Of course, the bureaucratic overhead of employing people is also high - compulsory this and compulsory that - but many countries suffer similarly.
The government is attempting to encourage the nation to exploit our competitive strengths. The reality is that, mineral wealth aside, we have none and mostly because we don't choose to be competitive.
So, the country with one of the lowest population densities has the highest housing costs; with the longest coastline imports most of its seafood; with the most abundant natural resources has the highest energy costs; with one of the largest collective savings and investment accounts needs foreign investment to develop.
We really are a country of contradictions, and not it a good way.
For once i agree with Andy RR. and will speculate a little further based on my own experience.
Firstly it's not "labour costs" that are killing industry, its "employment costs".
Let me give you some examples.
"Workers Compensation" this is a giant rort and every manager I know has a story of rorting. I won't bore you with mine unless asked.
"Industrial relations law" I had a retrenched worker fill out a form the size of a small bit of toilet paper alleging he was paid the wrong wage for Sixteen years. This resulted in a Federal workplace audit that cost me six weeks of management time and Five thousand dollars.
"Occupational Health and Safety" While I am a fervent believer in the application of this, it is now a new home for oxygen thieves.
"Anti Discrimination Law" Enough said.
"Taxation" - which doesn't differentiate between income streams based on risk and stability. Why do farmers get "drought" aid but manufacturers don't? Then of course there is the dreaded fringe benefits tax which makes things like overseas travel on business a real pain. Then of course there is taxation disincentives to do with entrepreneurial matters.
"Infrastructure" allow energy suppliers to price gouge and every other little bit of government to do the same.
"Cost of living"? we have world class rent seekers such as Coles and Woolworths driving that.
"Cost of housing"? We have overseas investors driving that.
That is just the start of my list. I'm sure we could add more.
The actual wages? Not an issue in my opinion. Australians individually are pretty efficient and smart workers they are much more multi skilled and innovative than Americans and not hide bound like Europeans, nor as venal and criminal as some Asians. Our individual productivity is high.
Public Holidays? We have less than America.
"working hours"? We work more hours than Americans.
My own experience of high tech manufacturing is that we are very competitive, but lack of patient capital and taxation mean that the best strategy for someone like the Ozrunways boys - Shagpile and all, is to build their business to the point where someone like Jeppesen buys it and takes it offshore.
To put that another way, once Ozrunways gets to a certain size in number of employees, all the additional Australian regulatory costs I've mentioned will expand exponentially and destroy profitability unless it goes offshore.
Firstly it's not "labour costs" that are killing industry, its "employment costs".
Let me give you some examples.
"Workers Compensation" this is a giant rort and every manager I know has a story of rorting. I won't bore you with mine unless asked.
"Industrial relations law" I had a retrenched worker fill out a form the size of a small bit of toilet paper alleging he was paid the wrong wage for Sixteen years. This resulted in a Federal workplace audit that cost me six weeks of management time and Five thousand dollars.
"Occupational Health and Safety" While I am a fervent believer in the application of this, it is now a new home for oxygen thieves.
"Anti Discrimination Law" Enough said.
"Taxation" - which doesn't differentiate between income streams based on risk and stability. Why do farmers get "drought" aid but manufacturers don't? Then of course there is the dreaded fringe benefits tax which makes things like overseas travel on business a real pain. Then of course there is taxation disincentives to do with entrepreneurial matters.
"Infrastructure" allow energy suppliers to price gouge and every other little bit of government to do the same.
"Cost of living"? we have world class rent seekers such as Coles and Woolworths driving that.
"Cost of housing"? We have overseas investors driving that.
That is just the start of my list. I'm sure we could add more.
The actual wages? Not an issue in my opinion. Australians individually are pretty efficient and smart workers they are much more multi skilled and innovative than Americans and not hide bound like Europeans, nor as venal and criminal as some Asians. Our individual productivity is high.
Public Holidays? We have less than America.
"working hours"? We work more hours than Americans.
My own experience of high tech manufacturing is that we are very competitive, but lack of patient capital and taxation mean that the best strategy for someone like the Ozrunways boys - Shagpile and all, is to build their business to the point where someone like Jeppesen buys it and takes it offshore.
To put that another way, once Ozrunways gets to a certain size in number of employees, all the additional Australian regulatory costs I've mentioned will expand exponentially and destroy profitability unless it goes offshore.
Well except for the Canberra, Mirage, F18, kiowa, nomad, blackhawk/seahawk, PC9, industrial grants to Gippsland Aeronautics, and many other light aircraft manufacturers, generous discounts on property and dwelling charges at airfields and numerous other sponsorships .... except for that what has the Guvment ever done for us?
Sorry Andy its not. Most of these things saw the Guvment picking up the bill. Whatever the Guvment then took away they got charged straight back next month. In the 70's some of the industry was funded out of defence, simply on the basis of it being an industry in residence.
Aeromariner, I happen to know a little about the PC 9 and the awarding of that contract. It was not " a goverment gift to the aviation industry" it was exactly the reverse.
CAC had designed a training aircraft to RAAF specifications called the "Wamira" the specifications called for, among other things, air conditioning, side by side tandem seating and the undercarriage drop test was from some unbelievable height. The RAAF swore blind that this was what they must have..
Hawker pt up the PC7 and the PC9, neither of which met the RAAF specifications.
The RAAF advice to Government was that their preference was Wamira first, PC7 second and they did not want the PC9 at all, but would understand that political considerations may govern the final choice.
At the deciding meeting to brief the Minister Bomber Beazley simply stated "your getting the PC9" and that was all. Bankstown and Sydney vs. Fishermans Bend, and Melbourne. No contest. This is from a participant at the meeting whose name is a number.
CAC folded as they had bet the farm on winning this project and was taken over by Hawkers.
The PC9 was deemed unusable as a basic trainer for ab initio students, they put the dux of the class in one and he came out white.
Some gift. Same as the other gifts - all poisoned. But then again some guys got nice trips to Switzerland instead of FIshermans bend.
CAC had designed a training aircraft to RAAF specifications called the "Wamira" the specifications called for, among other things, air conditioning, side by side tandem seating and the undercarriage drop test was from some unbelievable height. The RAAF swore blind that this was what they must have..
Hawker pt up the PC7 and the PC9, neither of which met the RAAF specifications.
The RAAF advice to Government was that their preference was Wamira first, PC7 second and they did not want the PC9 at all, but would understand that political considerations may govern the final choice.
At the deciding meeting to brief the Minister Bomber Beazley simply stated "your getting the PC9" and that was all. Bankstown and Sydney vs. Fishermans Bend, and Melbourne. No contest. This is from a participant at the meeting whose name is a number.
CAC folded as they had bet the farm on winning this project and was taken over by Hawkers.
The PC9 was deemed unusable as a basic trainer for ab initio students, they put the dux of the class in one and he came out white.
Some gift. Same as the other gifts - all poisoned. But then again some guys got nice trips to Switzerland instead of FIshermans bend.
Sunfish you are right ...you do know only a little about the PC9. Wamira was designed by a consortium called AAC of which CAC was only a member. The design side was led by Alan Smith from GAF.
The point Porch Monkey is that the Government is still going to spend X million on a particular project. They can either spend it at home or overseas. However spending it at home does not generate trips to St Louis, Los Angeles, Seattle, Toulouse and London for a large number of public servants and defence officers.
Overseas companies know this and one of their chief marketing strategies is "we are having a conference on XXXX at Paris, Montreal, Nice, San Francisco and you must attend."
Makes Bankstown and Fishermans Bend look undesirable doesn't it?
The money is still "wasted" look at the Seasprite program.
Overseas companies know this and one of their chief marketing strategies is "we are having a conference on XXXX at Paris, Montreal, Nice, San Francisco and you must attend."
Makes Bankstown and Fishermans Bend look undesirable doesn't it?
The money is still "wasted" look at the Seasprite program.
Makes Bankstown and Fishermans Bend look undesirable doesn't it?
Many years ago, (1970's) a good mate of mine was head of Defense Sales for the old AWA, based at Ashfield, NSW.
They had a range of comms gear that was sold to the poms, and several other European military, and quite extensively in the middle east.
They sold nothing to the Australian Army, no trips in it, the old Ashfield Travel Lodge on Parramatta Rd. couldn't compete with the Intercon. in Dallas etc.
Tootle pip!!
The point is that the Guvment knew exactly what was going on. Let me give you just one aspect ....the ECS for the cockpit. I can't even remember the numbers, but the cockpit temperature had to be pulled down from some extraordinary high temperature (aircraft heat soaked in blazing sun uncovered on tarmac)to deliciously comfortable in the time it took an FI to get his seatbelt on. Why?? nobody knew. Why not put it in the shade? not acceptable... why not hook a kelvinator (GPU) up to it ..... not acceptable. It wasn't a fighter likely to be deployed (ironically they are kept in hardened shelters). It was just a trainer .... But that ECS meant that all standard PT6 driven PTOs were unsuitable ...RAAF ... simple pay for a new one.... and the ejection seat (or as it was known the injection seat). It seemed to go in and out of the spec on a weekly basis. All of this being paid by the guvment. Of course the competition steps in and says the PC9 purchase will stop all this nonsense and, remember the Bomber was trying to eke out the defence dollar. Later on another project I had learnt the lesson. I suggested that (on this heat soak issue) we build the RAAF 20,000 sqft fully equipped hangers for the new plane, on all the bases and as the vitriol flew across the room, "18,000 for the plane and 2,000 for the fully equipped boozer I would add" ... karma would descend
The PC9 was deemed unusable as a basic trainer for ab initio students, they put the dux of the class in one and he came out white