# Let Oz Car Industry Die



## Garpal Gumnut (15 August 2008)

The Bracks Report into the Australian car industry is now out. 

Tariffs will remain past 2010, but lower than in the past.

Queensland, NT and West Australia are short  80,000  workers for the mining industry.

Tariffs should be abolished to force the shut down of the inefficient car industry and encouragement given to the workers to move to more productive parts of Australia.

Victoria and South Australia are practising a form of mainstream CDP to keep their workers employed.

gg


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## Stan 101 (15 August 2008)

Well said Garpul. On the face of it, it should be left to stand on its own two feet. Just wondering how Adelaide and Melbourne will cope with a mass exodus to other states. Other local business would surely suffer.

MAybe the cream of the auto industry could begin on some boutique vehicle industry to compete on the world stage with the likes of Bugati, Ferrari, and the like. Maybe even a motorcycle industry to compete with Bimota or even Ducati.


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## Kinezakis (15 August 2008)

Good on ya Bracksy, your a ... legend.

A nice level playing field we have with other economies don't we?
Yeah, let's keep digging up the ground and exporting it, after all it's easy and it will last forever won't it?

So when the resource boom finishes we can become the next NZ, and be content with our sheep and sercive industry.

When manufacturing skills or any other skills for that matter are lost, they are lost for good. You can't just decide to bring em back!


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## Garpal Gumnut (15 August 2008)

Kinezakis said:


> Good on ya Bracksy, your a ... legend.
> 
> A nice level playing field we have with other economies don't we?
> Yeah, let's keep digging up the ground and exporting it, after all it's easy and it will last forever won't it?
> ...




Melbourne was built on the gold rush.

It will fade away on the coal, iron and uranium rush of the 21st century.

There is a union-capital axis at work in the southern states that is about to be smashed by Kev07 and Swannie which will lead to a better wealthier Australia.

gg


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## Kinezakis (15 August 2008)

Garpal Gumnut said:


> Melbourne was built on the gold rush.
> 
> It will fade away on the coal, iron and uranium rush of the 21st century.
> 
> ...




Smash the unions fine, but why strangle manufacturers? Is that the type of future they are building for our children?

Mining booms have come and gone repeatedly over the last 100 years. The majority of the rest of the expansion of the last 15 years was built on IOU's and that episode is only now starting to rear it's ugly face.


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## theasxgorilla (15 August 2008)

Garpal Gumnut said:


> Victoria and South Australia are practising a form of mainstream CDP to keep their workers employed.




CDP, Garpal?


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## roland (15 August 2008)

protectionsim stiffles innovation, just wondering why the rest of the world would want the cars we make here ....

didn't Rudd just go to Japan and offer Toyota a big hand out to invest into green cars here??

I am unsure of the relationship of the Aussie car makers with the parents - isn't Ford and General Motors (Holden) American companies?


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## Garpal Gumnut (15 August 2008)

theasxgorilla said:


> CDP, Garpal?




CDP is is a work for the dole programme guaranteed to keep Indigenous people in poverty for generations. See Pat Dodson's comments on it. 

http://www.actu.asn.au/Archive/ACTU...News/PatDodsonsAddressToACTUCongress2003.aspx

in the context of my post CDP = work for the dole.

gg


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## Smurf1976 (15 August 2008)

I've driven plenty of Aussie built Holden and Ford vehicles and without exception they are rubbish in terms of quality compared to any Japanese car I've driven. 

Faulty seat belts, faulty diff, engine rattles when still nearly new, brakes needing attention after just 30,000 km  and bits in the interior simply falling off. And don't even mention the door lock spectacularly failing simply because a passenger tried to open it from the outside at the same time as I was opening the door from the inside (it was dark). The dealer admitted that was guaranteed to break it - just not good enough given it's a scenario quite likely to occur, esepcially for anyone with children.

All this trouble in normal driving around town on bitumen roads in fleet vehicles replaced every 2 years (driven 95% by one driver). And I'm a pretty conservative driver too.  

Even worse was waiting several months for spare parts - they couldn't give a damn about their (fleet) customers but no doubt the factory was still running with plenty of parts available.

And don't even mention the ridiculous fuel consumption. It's not as though they have the on road performance to justify it.

Not being a car fanatic, I just want to get from A to B with reasonable reliability, safety and economy, I wouldn't consider anything other than a Japanese brand for my own car. A lot less hassle and better value. My 8 year old Jap car has thus far required a new battery, tyres and a set of wiper blades. And it's been driven on some pretty rotten dirt roads (it's a 2wd car) too. 

But all that said, an Australian built Toyota would presumably be fine since I'd assume the Japanese parent company would be enforcing decent quality standards in order to protect their reputation. I've never had one but I'd consider one for my next car alongside the other Japanese brands.


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## Garpal Gumnut (16 August 2008)

roland said:


> protectionsim stiffles innovation, just wondering why the rest of the world would want the cars we make here ....
> 
> didn't Rudd just go to Japan and offer Toyota a big hand out to invest into green cars here??
> 
> I am unsure of the relationship of the Aussie car makers with the parents - isn't Ford and General Motors (Holden) American companies?




It sounds as if there is 80/20 agreement on letting the car industry die.

South Australians should not feel threatened by this. There are numerous outlets selling Kylie Minogue DVDs in Queensland and I am sure the same goes for WA and the NT. The boondocks are open minded about difference.

Victorians are used to travelling for work, so it won't make much difference to them.

gg


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## Tysonboss1 (16 August 2008)

Do Australian Auto manufactures receive subsidies?

if so What are they and how do they work.


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## gfresh (16 August 2008)

I look forward to cheaper superior quality overseas cars as tariffs are reduced, bring it on  It may well encourage people to upgrade more regularly, improving overall economy, safety and pollution levels on our roads. 

Apparently Australia has one of the oldest vehicle fleets on the roads in terms of  Western countries. The high cost of new vehicles may be one of the reasons for this trend.

Only have to look at what a BMW costs in Europe, as to what it goes for here, to see we really get the short-end of the stick. Sure, we're thousands of km away, but it's a lot more than just the transport costs.


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## Kinezakis (16 August 2008)

Australia already has probably the lowest tariffs among it's trading partners. The average amongst USA, China, Korea, and Japan is 35%. The Bracks report wants 5% by 2010 which is very low in comparison and will make it very difficult for local manufacturers to remain competitive, especially if AUDUSD remains at elevated levels.

We don't see these countries lowering their tarrifs, infact their trend is the opposite.

I have worked for an Australian automotive components company here for 23 years. In that time as tarriffs have come down immensly and we have expanded the business into 10 other countries and our biggest customers being GM and FMC. Today we are one of the largest brake manufactures world wide. The main reason this happened was because our products are innovative, lightweight, and simply superier all round. These products were designed and used on Aussie vehicles for years before being promoted overseas.One must not assume that all Aussie vehicles are all trash.

 The auto industry is this countries biggest exporter at present behind mining. The only problem is, mining only employs 2% of the workforce.


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## Macquack (16 August 2008)

Good on you, Kinezakis.

You are one of the few who actually *produce something tangible* for society (also, usually the lowest paid workers).

Kill off all manufacturing industry, and all that is left is people producing pieces of paper.


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## Beej (16 August 2008)

Kinezakis said:


> Australia already has probably the lowest tariffs among it's trading partners. The average amongst USA, China, Korea, and Japan is 35%. The Bracks report wants 5% by 2010 which is very low in comparison and will make it very difficult for local manufacturers to remain competitive, especially if AUDUSD remains at elevated levels.
> 
> We don't see these countries lowering their tarrifs, infact their trend is the opposite.
> 
> ...




Yes that is a great post, I love hearing stories of successful companies like this. The thing is, the above is NOT an argument that makes me think we should keep trade tariffs. If the products are world class, in demand,  innovative, and produced at a globally marketable cost/price margin, then a business such as this should happily stand on it's own feet with the need for subsidy or tariff based protection, either directly or indirectly via the actual local vehicle assemblers!

Cheers,

Beej


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## Smurf1976 (16 August 2008)

Macquack said:


> Good on you, Kinezakis.
> 
> You are one of the few who actually *produce something tangible* for society (also, usually the lowest paid workers).
> 
> Kill off all manufacturing industry, and all that is left is people producing pieces of paper.



I'd love to support Aussie industry and totally agree with the argument about producing something tangible.

But looking at the last 2 work vehicles makes me face reality. Bottom line is another fault develops, on average, every 4 months. Mostly small things like the heater fan wearing out or the hand brake lever plastic coming off, but there have been outright mechanical failures too.

Meanwhile my 8 year old Nissan Pulsar has thus far required new tyres, one new battery and replacement of the front wiper blades. That's it. And it's a cheaper car that's travelled a lot further and on worse roads than those Falcons. Aussie manufacturers ought to be able to achieve similar levels of reliability...


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## Kinezakis (16 August 2008)

Smurf1976 said:


> I'd love to support Aussie industry and totally agree with the argument about producing something tangible.
> 
> But looking at the last 2 work vehicles makes me face reality. Bottom line is another fault develops, on average, every 4 months. Mostly small things like the heater fan wearing out or the hand brake lever plastic coming off, but there have been outright mechanical failures too.
> 
> Meanwhile my 8 year old Nissan Pulsar has thus far required new tyres, one new battery and replacement of the front wiper blades. That's it. And it's a cheaper car that's travelled a lot further and on worse roads than those Falcons. Aussie manufacturers ought to be able to achieve similar levels of reliability...




Toyota produces locally made vehicles to the exacting Japanese standards and worldwide platfom. The Japanese would settle for nothing less. Just because these vehicles are made in Australia does not make them inferior to any other Toyotas worldwide as the Toyota quality standards.

The same goes for Holdens and Fords in comparison to US standards. In fact Holdens probably make a better product than GM in the USA.

With Ford and Hold it has been difficult quality wise. If you look back and see what they have been up against. That is to develop vehicles from the ground up for a low volume domestic market(around 100K units a year). Other worldwide manufacturers are spending R & D for much larger volumes.

This will probably change in the years ahead as both GM and FMC have adopted worldwide platform rationalization programs. So you will basically be buying the same vehicles both here and overseas but made in their respective countries. This would bring development costs down dramatically.


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## Garpal Gumnut (16 August 2008)

Kinezakis said:


> Toyota produces locally made vehicles to the exacting Japanese standards and worldwide platfom. The Japanese would settle for nothing less. Just because these vehicles are made in Australia does not make them inferior to any other Toyotas worldwide as the Toyota quality standards.
> 
> The same goes for Holdens and Fords in comparison to US standards. In fact Holdens probably make a better product than GM in the USA.
> 
> ...




I don't doubt they make a good car, mate, but they are needed elsewhere where their sweat can earn more productive dollars mining.

With all the subsidies their cost per car is way over the equivalent cost in Thailand or South Korea.

gg.


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## Kinezakis (16 August 2008)

Garpal Gumnut said:


> I don't doubt they make a good car, mate, but they are needed elsewhere where their sweat can earn more productive dollars mining.
> 
> With all the subsidies their cost per car is way over the equivalent cost in Thailand or South Korea.
> 
> gg.




the subsidies are mainly for research and development not for production, as they are for most other industries. 

As for the mining, not everyone wants to move interstate and work in a filthy environment digging up dirt. Even if it pays a little more _*at the moment *_


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## Garpal Gumnut (16 August 2008)

Kinezakis said:


> the subsidies are mainly for research and development not for production, as they are for most other industries.
> 
> As for the mining, not everyone wants to move interstate and work in a filthy environment digging up dirt. Even if it pays a little more _*at the moment *_




Add on to that the money paid to Bracksie and the other retired ALP hacks for running the inquiry, and all the other money spent going nowhere. Its like sit down money. 

Mining is a cleaner environment than a GM or Ford sweatshop.

gg


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## Smurf1976 (16 August 2008)

Kinezakis said:


> Toyota produces locally made vehicles to the exacting Japanese standards and worldwide platfom. The Japanese would settle for nothing less. Just because these vehicles are made in Australia does not make them inferior to any other Toyotas worldwide as the Toyota quality standards.
> 
> The same goes for Holdens and Fords in comparison to US standards. In fact Holdens probably make a better product than GM in the USA.
> 
> ...



Can't really argue with any of that and point taken about Toyota.

Thinking about it some more, it's _American_ manufacturers I'm not keen on rather than Australian per se. Trouble is, 2 out of 3 "Australian" manufacturers are American companies and to be blunt I think that's the real problem. The US auto industry isn't known for build quality and it's reflected locally.

That's not me being anti-American. Not at all. It's just that my experience and that of others I know tells me that American cars aren't built very well whether they are built in the US or are "Australian". Performance, looks and so on maybe, but not reliability. 

The real trouble with the Australian industry in my opinion is (apart from Toyota) it's in the middle of nowhere in terms of product. 

If you want something at the high end in terms of performance then (in global terms) you don't think of Australian cars. You think of Ferrari, Lamborghini, Porsche and so on. A Commodore ain't no Veyron.

If you want a more affordable fast car then a Nissan GT-R leaves anything we make here for dead unless it's massively modified. 

If you want upmarket luxury then it's Mercedes, Rolls Royce and so on. We don't have anything that can compete there.

If you just want to get from A to B with good safety, reliability and economy then a conservative Japanese car is a pretty clear winner there.

And if it's the lowest cost you're after then the Koreans etc have that one sorted.

So we just don't seem to be leading in any category (apart from Toyota with reliability etc) and I think that's the real problem. We're focused on relatively cheap mass market production but don't have the low costs to make it work. So either get the costs down somehow (like Korea etc) or switch the focus to higher end vehicles (performance, quality, any common buying criteria really) that sell for higher prices.


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## Garpal Gumnut (17 August 2008)

Smurf1976 said:


> Can't really argue with any of that and point taken about Toyota.
> 
> Thinking about it some more, it's _American_ manufacturers I'm not keen on rather than Australian per se. Trouble is, 2 out of 3 "Australian" manufacturers are American companies and to be blunt I think that's the real problem. The US auto industry isn't known for build quality and it's reflected locally.
> 
> ...




agree so lets cut our losses and close the car industry down in Australia,

gg


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## Kinezakis (17 August 2008)

Garpal Gumnut said:


> agree so lets cut our losses and close the car industry down in Australia,
> 
> gg




Now that is just plain selfish. I don't think the 150,000 odd in Victoria employed both directly and indirectly by automotive manufacturers  would agree and be really be happy about that. 

How would you like it if you were one of these workers and the continuing existence of that industry depended on your and your families livelyhood?

Mining is going through a boom at present. That boom WON'T last forever so we have to make the most of it in that industry for now. The same happened in the 70's with the Japs and after their ecomomy fell in a heap in the early 90's demand tapered off. It's the same for tradies during housing booms etc...

Rather than shut an industry completely, I think this country should try and be as diversified as possible, and manufacturing needs to be part of that diversification plan as do other industries. 

The old saying is "don't put all your eggs in one basket"


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## Smurf1976 (17 August 2008)

Garpal Gumnut said:


> agree so lets cut our losses and close the car industry down in Australia,



Or change it radically and make genuine performance vehicles. Or make proper luxury cars. Or make genuinely economical cars. Just stop being the king of compromise as it doesn't seem to be working.


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## Garpal Gumnut (17 August 2008)

Kinezakis said:


> Now that is just plain selfish. I don't think the 150,000 odd in Victoria employed both directly and indirectly by automotive manufacturers  would agree and be really be happy about that.
> 
> How would you like it if you were one of these workers and the continuing existence of that industry depended on your and your families livelyhood?
> 
> ...




I can hear what you say, but the fact is that these workers in Victoria and SA are being subsidised by tax payers to keep them in a job.

Meanwhile the mining industries are short 80,000 workers.

I worked in Melbourne in the late 70's in a suburb which depended on 
an auto company and the mindset then amongst the workers was that it was a job for life and that the world owed them a living.  

Workers in central Queensland are in the top 5% of tax payers nationally. They earn their money. There are no subsidies to keep them in a job. Whether they have awas or union negotiated agreements, they  know what they are worth.

They are not in awe to Seoul, Tokyo or Detroit for their jobs.

gg


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## Macquack (18 August 2008)

Garpal Gumnut said:


> Workers in central Queensland are in the top 5% of tax payers nationally. They earn their money. There are *no subsidies *to keep them in a job. Whether they have awas or union negotiated agreements, they  know what they are worth.
> 
> They are not in awe to Seoul, Tokyo or Detroit for their jobs
> 
> gg




How about the Fuel Tax Credits Scheme for a start.

That amounts to a huge subsidy for the mining industy.


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## Buddy (18 August 2008)

Here is a pretty good summary of the OZ car industry (IMO)
http://www.theaustralian.news.com.au/story/0,25197,24187806-28737,00.html

I'm still unsure of whether we should let the "car idustry" die  but I would be horrified if we let our manufacturing base decline further. It has already declined to almost unsustainable levels, probably due to a combination of tarrif reductions and the emergence of cheap Asian imports.  Having said that, lets remember that car assembly is simply that - assemble of a whole pile of bits and pieces. Maybe out manufacturing effort should concentrate on the car (and truck, etc) component manufacturing side of the equation.  Probably we should concentrate on making components in a smarter, more efficient way, for the export market.  Plus on the emerging (dare I say it, green) technologies and engineering side. Remember, Australia engineers a lot of the bits of cars that are now "made" overseas.


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## Smurf1976 (18 August 2008)

Macquack said:


> How about the Fuel Tax Credits Scheme for a start.
> 
> That amounts to a huge subsidy for the mining industy.



How does simply handing back what you took in the first place constitute a subsidy?

I tax you $50 then give you $50 back. That's not a subsidy.


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## Macquack (18 August 2008)

Smurf1976 said:


> How does simply handing back what you took in the first place constitute a subsidy?
> 
> I tax you $50 then give you $50 back. That's not a subsidy.




Yes it is.

I have to pay excise on diesel I use in my truck (under 4.5 GVM). 

Mining companies pay zero tax on diesel used in mining operations.

I am subsidising the mining industry.


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## chops_a_must (12 November 2008)

So when general motors and ford merge, are holden and ford in Australia going to become Folden? It has a nice ring to it I reckon.


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## aleckara (12 November 2008)

Garpal Gumnut said:


> Add on to that the money paid to Bracksie and the other retired ALP hacks for running the inquiry, and all the other money spent going nowhere. Its like sit down money.
> 
> Mining is a cleaner environment than a GM or Ford sweatshop.
> 
> gg




The problem with globalisation is that there is a tradeoff if you are in a wealthier than average country. Globalisation is meant to be an equalising force and theoritically it should distribute the wealth of the world evenly.

The real problem with this is that if it does that there isn't enough resources on the planet to feed everyone at the same quality of life that Australians typically have enjoyed. China, Taiwan and a lot of harder working nations are working hard to get a bigger share of the pie. Their hard work will of course result in better inventions, better quality, etc as they try to get the money of people that have it until they don't have it anymore and the countries equalise (unless one takes on a lot of debt to keep the flow going past that equal point by the artifical high dollar - then it is a shifting of wealth from the richer country to the poorer country). 

While if you protect a country you won't get the increased competition and better products you will have a closed system where the wealth stays in the country and stability is a lot easier to achieve (and stability is the enemy of change and progress). It also keeps an economy from not focusing on debt-based industries and keeps them producing locally (i.e the financial servives industry is a debt based industry).  People need to make something, and to compete against the rest of the world when they will work for nothing means that while we get cheaper products in the short term the end result means that to compete in the long term we have to live the same lifestyle as the highest competitng force in order to compete or in other words the lowest common denominator.

Anyone want to live like a rural Chinese worker? Or a Japanese doing long hour shifts? Then us as a country can't compete in the long term - simple.

The high paid jobs in Australia do have protection not necessarily from the government but because of location. You need tradies locally to build a house, you need miners locally to mine local resources - our advantages are not because of cheap labour but because local industries enjoy a natural protection compared to industries that are more flexible (such as IT, manufacturing, etc). Without protection nothing would be done here.


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## N1Spec (12 November 2008)

roland said:


> protectionsim stiffles innovation, just wondering why the rest of the world would want the cars we make here ....
> 
> didn't Rudd just go to Japan and offer Toyota a big hand out to invest into green cars here??
> 
> I am unsure of the relationship of the Aussie car makers with the parents - isn't Ford and General Motors (Holden) American companies?




absolutely agree, our cars cannot compete with Asian manufacturers, call me unpatriotic but Aussie made cars are utter and complete rubbish.


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## Smurf1976 (12 November 2008)

Macquack said:


> Yes it is.
> 
> I have to pay excise on diesel I use in my truck (under 4.5 GVM).
> 
> ...



I would define a subsidy as one party propping another up financially.

You are paying money to the government in the form of excise. But you are NOT paying money to mining companies via this means and neither is government on your behalf.

So you are subsidising government and mining companies are not subisidising government via diesel excise. But I just don't see how you are subsidisng mining companies.

If you buy a carton of beer and I make home brew then the excise on your beer isn't subsidising my home brew. You are helping to fund government that's for sure, but you aren't subsidising my brewing.


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## numbercruncher (12 November 2008)

Everyone oh so keen to shut down our manufactoring base !!

Just as well Australia has a natural affiliation with bananas huh ?


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## Julia (12 November 2008)

numbercruncher said:


> Everyone oh so keen to shut down our manufactoring base !!
> 
> :



I don't think it's necessarily that, NC.
Perhaps more just concerned about when the bail outs will stop.
e.g. we have ABC Learning and now the car industry (again in the case of the latter.)  This is coming from a rapidly diminishing surplus.

I think a lot of people feel this is setting a precedent for other failed companies and it's pretty likely there will be more of these.


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## nick2fish (13 November 2008)

My opinion Auzzie cars are not complete rubbish, made well and perform well

We cannot compete with Asian cars ...True

Well then let Globalization begin

GM must die and so our car industry... if we can not compete

Let those who do something well produce and we will find a niche and have customers

Its not a one way street  Cheers


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## Warren Buffet II (13 November 2008)

Everyone is saying that we will continue with a property and mining boom because China will save us.

Well, let China saves us on this one as well and import cheap chinese cars and close all those useless Aussie car manufactures.

WBII


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## doctorj (13 November 2008)

On one hand I agree, let them die.  If something isn't profitable, move on and leave it to those that are.

That said, an indigenous automotive industry must have other benefits for the country than just it's impact on the bottom line.  What about the experience and expertise in manufacturing and design and access to the technology that comes along with it?  

Surely it has some worth from a strategic/defence point of view?


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## auric (13 November 2008)

numbercruncher said:


> Everyone oh so keen to shut down our manufactoring base !!
> 
> Just as well Australia has a natural affiliation with bananas huh ?




The most logical industry to promote is the refining and upgrading of our raw materials , bit of a joke when copper gold conc. is shipped to Japan and we buy it back as copper wire etc.eg.( Newcrest Mining).
further manufacturing of these refined materials would then follow on as well..

also by maintaining the refining here instead of exporting the raw materials to the likes of china we can control the carbon footprint with better and innovative refining technologies instead of exporting pollution overseas...

in modern refining labour costs are low as most of the processes are computer controlled and automated
a lot of flow on industries would follow..


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## The Once-ler (13 November 2008)

Macquack said:


> Yes it is.
> 
> I have to pay excise on diesel I use in my truck (under 4.5 GVM).
> 
> ...





You definately are not subsidising the mining industry. The deisel tax rebate is for mining, farmers and fishermen, who get the tax back as they are not using the road system. Why should they be paying the tax to build and maintain roads if they aren't using the roads for flip sake?


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## Macquack (16 November 2008)

The Once-ler said:


> You definately are not subsidising the mining industry. The deisel tax rebate is for mining, farmers and fishermen, who get the tax back as they are not using the road system. *Why should they be paying the tax to build and maintain roads if they aren't using the roads *for flip sake?




Once-ler, you are making the assumption that *ALL of the fuel excise goes towards road funding.* If it did, I would agree with you. However....

NRMA Open Road 


> *Does the Government tax motorists more than it spends on roads?*
> *True*: In the 2005/06 financial year, the Commonwealth Government collected $14.07 billion in Petroleum Excise revenue. In comparison, they spent around $2.1 billion on roads. This means *for every dollar *the Commonwealth Government collects in Petroleum Excise it spends *less than 15 cents on the nation’s roads*.




On that basis, I am happy to give the mining companies a Fuel Tax credit in the order of 15% of 38.143cents/litre (diesel rate) = say 5.721cents per litre and not the full amount.


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## TradeDaily (17 November 2008)

I recently came back from visiting a friend in the US. My friend lives in LA and recently purchased a BMW M3 2002 model for 23K. Now the same vehicle here in Aus sells for 110k+ so I wondered how there could be such a large difference in price. 

I appreciate that the US is a much larger market, more competative etc... but how can a approx 90K price difference be justifiable? 

If anyone can give a basic explanation I would love to hear it?


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## Kipp (19 November 2008)

I think a more reasonable title for this thread would be "let GM and Ford die" (yes including their Australian operations).

GM has been hemoragging money over the last three years, including an astonishing $39 Billion dollar loss in the third QTR of 2007
http://money.cnn.com/2007/11/07/news/companies/gm/index.htm

Ford and GM simply cannot compete with their Japanese and European competitors.  We are happy to let AUSTRALIAN-owned small business go belly up, but manufacturing?!  How much do you need??  $6 Billion to save 62,000 jobs... $100,000 per job saved. 
We'll see GM with their grubby little hands out again next year no doubt.  Though GM will still need a much fatter bailout from the US gov't if they are to last another 12 months.


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## Pommiegranite (19 November 2008)

TradeDaily said:


> I recently came back from visiting a friend in the US. My friend lives in LA and recently purchased a BMW M3 2002 model for 23K. Now the same vehicle here in Aus sells for 110k+ so I wondered how there could be such a large difference in price.
> 
> I appreciate that the US is a much larger market, more competative etc... but how can a approx 90K price difference be justifiable?
> 
> If anyone can give a basic explanation I would love to hear it?




TD, I used to have one in the UK 3 years ago. It made no financial sense to ship it over (with all of the taxes etc). Now I drive a 'city car' which cost what I got for the BMW.

I would love to drive a BMW again - not for status reasons, but for the fact that it was a very well built car which was a joy to drive.

Unfortunately thanks to the government protection racket on the car industry here, I may never attain my dream at a fair price. For a so called free economy, this is shocking!

Apparently even servicing and parts for 'luxury foreign vehicles' have huge markups on them.

So I say, let the Oz car industry die and let nature take its course. We need to be Darwinian on this, and only take action if a monopoly appears.


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## sam76 (21 November 2008)

I thought this was a pisser! 


Bosses go begging, but keep silver spoons


US car company chiefs went to Washington with their hands out. They got a frosty reception.

THERE are 24 daily non-stop flights from Detroit to the Washington area. Richard Wagoner, Alan Mulally and Robert Nardelli probably should have taken one of them.

Instead, the chief executives of America's Big Three car makers opted to fly their company jets to the US capital for their hearings this week before the Senate and House ”” an ill-timed display of corporate excess for a trio of executives begging for an additional $US25 billion ($A38.6 billion) from the public trough this week.

"There's a delicious irony in seeing private luxury jets flying into Washington, DC, and people coming off of them with tin cups in their hands," Democrat representative Gary Ackerman advised the pampered executives at a hearing yesterday. "It's almost like seeing a guy show up at the soup kitchen in high-hat and tuxedo … I mean, couldn't you all have downgraded to first class or jet-pooled or something to get here?"

The Big Three said nothing, prompting another Democrat, Brad Sherman, to rub it in.

"I'm going to ask the three executives here to raise their hand if they flew here commercial," he said. All still at the witness table.

"I'm going ask you to raise your hand if you're planning to sell your jet … and fly back commercial," Mr Sherman said. More stillness.

"Let the record show no hands went up," he said.

By now, the men were probably wishing they had driven ”” and other members of the House Financial Services Committee were not yet done ribbing the chief executives over their jets.

Republican Patrick McHenry, said: "I'm not an opponent of private flights by any means, but the fact that you flew in on your own private jet at tens of thousands of dollars in cost just for you to make your way to Washington is a bit arrogant before you ask the taxpayers for money."

It was a display of stone-cold tone-deafness by the car company chiefs. In their telling, they have no responsibility for the industry's mess.

Threatening the US with economic Armageddon if they are not given government aid, they spent much of the session declaring what a fine job they have been doing in Detroit.

"Chrysler really is the quintessential American car company," Chrysler's Mr Nardelli said.

"We have products that are winning car and truck of the year regularly," General Motors' Mr Wagoner said.

"We are equal to or better than Honda and Toyota," Ford's Mr Mulally said. "Every new vehicle that we make, whether it's small, medium or large, is best in fuel efficiency. The given is safety. And we have more, at Ford, more five-star quality and safety ratings than any other automobile."

Committee chairman Barney Frank, cut him off. "Thank you, Mr ”” "

"And the best value!" Mr Mulally said.

"Commercials can go later," Mr Frank said.

It was hard to feel sorry for the executives when Republican Peter Roskam, late in the hearing, reminded them again that "the symbolism of the private jet is difficult", and mischievously asked the witnesses whether, in another symbolic gesture, they would be willing to work for $1 a year. "I don't have a position on

that today," said Mr Wagoner (2007 total compensation: $US15.7 million).

"I understand the intent, but I think where we are is OK," said Mr Mulally ($US21.7 million).

"I'm asking about you," Mr Roskam said.

"I think I'm OK where I am," Mr Mulally said. Don't even think about asking him to fly commercial.


----------



## Kipp (21 November 2008)

That is gold sam!
Original article http://business.theage.com.au/busin...lver-spoons-20081120-6cst.html?skin=text-only


----------



## chops_a_must (21 November 2008)

I'm painting my Wagoner red.


----------



## gfresh (21 November 2008)

Are we dead yet? 

Although reading the announcement about Ford's inline six being resurrected I think is almost a positive thing. It's not a bad engine - strap on a turbo and a few mods and it makes 300kw+. Almost seems to me they're writing off the chance of having a parent company to buy an engine off in a few years 

With the lower $AUD to pass on prices for any imported car next year (possibly large amounts ~10%, not just $1-2k), is it possible to have a viable local industry?  Especially if the rest of the world is turning to ****... it's not like many of the Jap manufacturers are going to that much better off than our local manufacturers.


----------



## Kipp (24 November 2008)

ON the hypothetical scenario that the Geelong car market goes belly up- surely it is not possible that Japanese or European car manufacturers might potentially set up here in Aus- especially if they could acquire Ford's assets at 20% of their value?  Companies that are actaully *profitable* well run, and capable of producing cars at a fuel efficiency greater than 12miles to the gallon? 

I don't really know.... just an idea...


----------



## jono334 (9 December 2008)

doubt that could work... maybe


----------



## Sean K (12 January 2012)

Situation seems to have gotten worse over the past 3 years.

Is this a case of nationalising private debt, or the tax payer bailing out inappropriate local industry, or short term stop gap to maintain long term viable private industry?



> Car industry would die without grants, Opposition's Ian Macfarlane says
> 
> OPPOSITION frontbencher Ian Macfarlane has warned Australia's car industry could "collapse entirely" without renewed investment and says a fresh strategic approach is required to put the sector on a firmer footing.
> 
> ...




My vote is on LOCID and build up our Defence industry to resist the NZ advance.


----------



## Boggo (12 January 2012)

In Adelaide we are now seeing exactly the same process with Holden that we saw years ago with Mitsubishi, ie, pour in more taxpayers funds to subsidise a multi national who has every intention of bailing out if the subsidies don't keep getting larger every year.

Its a merry go round and eventually we all have to get off, we simply cannot compete with imports.


----------



## Smurf1976 (12 January 2012)

The whole notion of a "level playing field" is nonsense that just doesn't exist in reality.

Impose tariffs on imports or otherwise subsidise local industry (not just car manufacturing) like practically every other country does. Otherwise we're truly stuffed when the mining boom inevitably ends.

Politically, note also that any money the SA government gives to Holden is effectively just a contribution to the company's carbon tax liability. In other words, the SA government effectively paying an Australian Government tax in order to delay the loss of a locally important industry. Time for an election me thinks...


----------



## Tyler Durden (12 January 2012)

Let's stop funding inefficient companies.


----------



## Starcraftmazter (13 January 2012)

I really hate the massive licencing fees, tarrifs and taxes for foreign car manufacturers. And more taxes for us.

Why should a car here cost multiples of what it does in any other country? Bloody thieves. Between this and the housing bubble, it all makes me want to move to Switzerland 

If only I knew German.


----------



## Julia (13 January 2012)

Starcraftmazter said:


> Bloody thieves. Between this and the housing bubble, it all makes me want to move to Switzerland
> 
> If only I knew German.



Goodness, Star....., if knowing German is all that's stopping you, just learn German.
Should be a breeze for someone of your level of all knowing genius.


----------



## sinner (13 January 2012)

Boggo said:


> In Adelaide we are now seeing exactly the same process with Holden that we saw years ago with Mitsubishi, ie, pour in more taxpayers funds to subsidise a multi national who has every intention of bailing out if the subsidies don't keep getting larger every year.
> 
> Its a merry go round and eventually we all have to get off, we simply cannot compete with imports.




I hear the SA Govt has paid almost 40mil to Holden over the last 7 years.


----------



## Sean K (13 January 2012)

The only real viable argument I can see is that we need to maintain some sort of manufacturing capability and capacity for the long term national interest. If the strategic analysts have recommended we keep this particular skill set for the long term then I'm OK with it. Has that analysis actually been done or is the government just taking a pluck? Don't we have a bunch of spec manufacturing industries that cover the gap? I'm not sure but have to assume this is an industry we need to keep. 

So, therefore, some investment from the nation makes sense. 

Or, not...


----------



## Knobby22 (13 January 2012)

kennas said:


> So, therefore, some investment from the nation makes sense.
> 
> :




Good comments Kennas.
I would add also some protection. Look at other countries and they have protection of 30% or more plus certain other schemes such as limits to imports. This is especially true of Brazil and Europe but also the USA, Malaysia to name a few.

If we provided some protection we wouldn't need to provide as much support.


----------



## Garpal Gumnut (13 January 2012)

kennas said:


> The only real viable argument I can see is that we need to maintain some sort of manufacturing capability and capacity for the long term national interest. If the strategic analysts have recommended we keep this particular skill set for the long term then I'm OK with it. Has that analysis actually been done or is the government just taking a pluck? Don't we have a bunch of spec manufacturing industries that cover the gap? I'm not sure but have to assume this is an industry we need to keep.
> 
> So, therefore, some investment from the nation makes sense.
> 
> Or, not...




Yes kennas,

That is the only argument for keeping it.

gg


----------



## Sean K (13 January 2012)

Garpal Gumnut said:


> Yes kennas,
> 
> That is the only argument for keeping it.
> 
> gg



Yeah GG, I suppose my question then is can we keep these skills somewhere else that is relevant and not a drain on the average tax payer? 

Clearly we can't compete on building cars but is there something else that we are already doing that is niche, like mining, that we should be fostering, or what? Perpahs instead of cars the subsidies should be in mining engineering equipment, that includes the trucks and diggers etc? It's the same skill set surely. Ditch the Camry and build a Caterpillar.


----------



## Garpal Gumnut (13 January 2012)

kennas said:


> Yeah GG, I suppose my question then is can we keep these skills somewhere else that is relevant and not a drain on the average tax payer?
> 
> Clearly we can't compete on building cars but is there something else that we are already doing that is niche, like mining, that we should be fostering, or what? Perpahs instead of cars the subsidies should be in mining engineering equipment, that includes the trucks and diggers etc? It's the same skill set surely. Ditch the Camry and build a Caterpillar.




Yes k, I'd agree. Since first starting this thread I have had a change of opinion and feel we should keep it, one never knows when one is going to need defence equipment and materiel or as you point out a vigorous equipment manufacturing base for mining.

gg


----------



## Tyler Durden (13 January 2012)

Now tourism wants some money, just as I thought, when one puts out their hands, others will follow. But I doubt tourism will get anything; Holden can give a brand new car to politicians, but tourism has nothing of much value to offer.

On another note, I was talking to my friend today about starting a business. He said there was no way I'd succeed because the cost of hiring someone is too high in Australia. Perhaps that's the main cause of the problem?


----------



## Smurf1976 (13 January 2012)

Knobby22 said:


> Good comments Kennas.
> I would add also some protection. Look at other countries and they have protection of 30% or more plus certain other schemes such as limits to imports. This is especially true of Brazil and Europe but also the USA, Malaysia to name a few.
> 
> If we provided some protection we wouldn't need to provide as much support.



As someone who would like to see manufacturing in general continue in this country, all I ask is that we introduce tariffs or other protection which matches that of other countries.

The only place where "free trade" exists is in an economist's head. In the real world. just about all our competitors have both protection and fewer taxes on production (payroll tax and carbon tax being the most notable ones). Even if Australian manufacturers are well above average efficiency, they would still fail financially given the assistance provided to rivals.


----------



## Smurf1976 (13 January 2012)

kennas said:


> Perpahs instead of cars the subsidies should be in mining engineering equipment, that includes the trucks and diggers etc? It's the same skill set surely. Ditch the Camry and build a Caterpillar.



The actual production at Caterpillar for their underground mining equipment is quite differently arranged from my understanding of how a mass production car factory works. 

The main difference is that a car factory basically "stamps them out" in thousands whereas you have a much smaller volume of higher value vehicles produced at the Cat underground mining equipment factory and is less automated.

But at least we do have an apparently viable industry making mining equipment in Australia which is a good thing in my opinion.


----------



## prawn_86 (13 January 2012)

Tyler Durden said:


> On another note, I was talking to my friend today about starting a business. He said there was no way I'd succeed because the cost of hiring someone is too high in Australia. Perhaps that's the main cause of the problem?




I dont runa business personally, but if yo are make sure it is small enough that you can get it all done without employing many people. Red tape & Payroll tax etc is a killer from what i hear


----------



## Tyler Durden (13 January 2012)

prawn_86 said:


> I dont runa business personally, but if yo are make sure it is small enough that you can get it all done without employing many people. Red tape & Payroll tax etc is a killer from what i hear




Yes that is along the lines of what he said, that the only way I'd make it work was if I did the work myself. Kinda crappy because I was looking to start a business where I could employ others and just receive passive income on top of my 9-5 job.


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## Julia (13 January 2012)

Tyler Durden said:


> Yes that is along the lines of what he said, that the only way I'd make it work was if I did the work myself. Kinda crappy because I was looking to start a business where I could employ others and just receive passive income on top of my 9-5 job.



What line of business do you have in mind, Tyler?


----------



## Tyler Durden (13 January 2012)

Julia said:


> What line of business do you have in mind, Tyler?




A mobile service driven to people's homes.


----------



## Julia (13 January 2012)

Tyler Durden said:


> A mobile service driven to people's homes.



 You're not going to tell us in what field?

I'm reminded of a ute I saw a while ago.  Emblazoned across the side was:

"Mobile Gardener"

The  "Mobile" seemed somewhat redundant.  One can hardly expect that you'd take the garden to the gardener.


----------



## McLovin (13 January 2012)

Tyler Durden said:


> Yes that is along the lines of what he said, that the only way I'd make it work was if I did the work myself. Kinda crappy because I was looking to start a business where I could employ others and just receive passive income on top of my 9-5 job.




Anyone who thinks running a small business will be "passive" in any way, shape or form hasn't run a small business.


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## Tyler Durden (14 January 2012)

Julia said:


> You're not going to tell us in what field?
> 
> I'm reminded of a ute I saw a while ago.  Emblazoned across the side was:
> 
> ...




That'd give away my idea 



McLovin said:


> Anyone who thinks running a small business will be "passive" in any way, shape or form hasn't run a small business.




I really haven't


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## Smurf1976 (14 January 2012)

Tyler Durden said:


> A mobile service driven to people's homes.



Not having a go at you personally, but isn't this a classic example of the problem?

Car manufacturing, as an alternative to imports, benefits Australia as a nation by retaining wealth in this country which would otherwise be sent overseas. And if we export the cars or other goods then it brings money into Australia from overseas.

In contrast, no amount of dog washing, lawn mowing or other household services can be exported or replace imports. It simply creates a market where none existed previously, and results in some money being sent out of the country in the process (since the petrol to run the vehicle is partly imported, there will almost certainly be some imported equipment used etc).

There's nothing wrong with household or other service industries as such, but no amount of dog washing, lawn mowing, ironing, taking holidays and nights out can replace the economic role of manufacturing, agriculture, fishing, mining etc.


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## Glen48 (14 January 2012)

Go see the bank's and find out who looks after their repo houses  doing board up ,clean up, trash out as the yanks say, maintenance etc that's were the money will be for as good few years check out that educational skool You tube and have a look around the web at trash outs. 
Banks like green lawns not green swimming pools.


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## young-gun (14 January 2012)

Glen48 said:


> Go see the bank's and find out who looks after their repo houses  doing board up ,clean up, trash out as the yanks say, maintenance etc that's were the money will be for as good few years check out that educational skool You tube and have a look around the web at trash outs.
> Banks like green lawns not green swimming pools.




so i should throw on my budgie smugglers and start cleaning pools is what your saying? sign me up. good luck with starting up the bus. tyler. just about to start myself. both exciting and scary.


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## Julia (14 January 2012)

Glen48 said:


> Go see the bank's and find out who looks after their repo houses  doing board up ,clean up, trash out as the yanks say, maintenance etc that's were the money will be for as good few years check out that educational skool You tube and have a look around the web at trash outs.
> Banks like green lawns not green swimming pools.



I can only speak for my own area, but all these services exist in ridiculously large numbers.  Every week there are more leaflets in the letterbox from people offering to do everything from housework/window cleaning/ car cleaning/pool cleaning, etc.

There are a few who are kept in work via real estate agents.


----------



## joea (15 January 2012)

kennas said:


> Clearly we can't compete on building cars but is there something else that we are already doing that is niche, like mining, that we should be fostering, or what? Perhaps instead of cars the subsidies should be in mining engineering equipment, that includes the trucks and diggers etc? It's the same skill set surely. Ditch the Camry and build a Caterpillar.




To re-tool an existing manufacturing line is an enormous job and extremely expensive.
To then produce a vehicle that is already in production by someone else, the retooled plant could never compete.
In the Weekend Australian an article(by Kim Carr) explains that we subsidies the Australian auto industry $US18 per person(not per taxpayer).
In USA its  $US96/head and Germany $US90/head.
Kim Carr is saying that there are 46,000 direct jobs and 200,000 in related industries.
So one would think that the industry is worth saving.

Another point is the Australian public is not going to go to the race tracks to watch a couple of Japanese cars race.
At Bathurst I mean, or the V8 series.
Or Japan versus South Korea.
Obviously. Bob Brown would be delighted to shut racing down.
Actually does anybody know what Bob watches on telly, you cannot see anything if its not turned on can you?(saving power).

Anyway Carr says there will be no surrender under Labor. 
Perhaps he should explain to Gillard and Swan, if they did not stuff up the economy, people would have money to buy Australian cars.
Kim Carr is certainly supporting something that is worthwhile and Abbott's crew should be helping him out. But it is the "hidden happenings" that the public  are not aware of,
that are more effective than a news paper article.
joea


----------



## Eager (15 January 2012)

joea said:


> Anyway Carr says there will be no surrender under Labor.
> Perhaps he should explain to Gillard and Swan, if they did not stuff up the economy, people would have money to buy Australian cars.
> Kim Carr is certainly supporting something that is worthwhile and Abbott's crew should be helping him out. But it is the "hidden happenings" that the public  are not aware of,
> that are more effective than a news paper article.
> joea



I rarely watch morning TV but I caught a story the day after last weeks announcement was made and I felt like kicking the telly in. The so-called expert that the host was interviewing launched straight into an attack on the industry by saying "Australians just don't want these gas-guzzling dinosaurs anymore" or similar. 

People DO have the money to buy Australian cars; they just choose not to. It is comical to see a woman trying to put the weekly shopping in the back of a new Hilux, a car more expensive to buy, more expensive to maintain and service, and which uses a more expensive fuel than a bread-and-butter Falcodore that would be eminently more suitable and provide far greater value for money. The local car industry has been talked down too much; the products made here are actually quite good but suffer from the perception that they do not provide value for money. In fact they are very economical to run and maintain for what they are - and for what they are capable of.

I have read reports that suggest that if you whacked a BMW badge on the back of an Aussie built family car, you could easily sell it for double the price.


----------



## Glen48 (15 January 2012)

Julia
That is true but the money is going to be in trash out were the bank is foreclosing on the  the FHOB or house prices double every 7 yrs victim hey are forced to move out so they load the car with the bare essentials,the can opener is more important than the 2k plasma , box of matches better than the 2k fridge, granddads urn  etc are all left behind because the rules of life have change from buying things they can't afford to impress people they don't know to looking after themselves and finding food, water, shelter.

The bank's then need some one with a dumpster to dump every thing and make the house presentable to sell on a flooded market.
 look up _trash outs_ on the web.


----------



## Macquack (15 January 2012)

Glen48 said:


> Julia
> That is true but the money is going to be in trash out were the bank is foreclosing on the  the FHOB or house prices double every 7 yrs victim hey are forced to move out so they load the car with the bare essentials,*the can opener is more important than the 2k plasma* , *box of matches better than the 2k fridge*, granddads urn  etc are all left behind because the rules of life have change from *buying things they can't afford to impress people they don't know *to looking after themselves and finding food, water, shelter.
> 
> The bank's then need some one with a dumpster to dump every thing and make the house presentable to sell on a flooded market.
> look up _trash outs_ on the web.




Glen48, you style is quirky, your comments often cryptic but you have to be the most entertaining poster on ASF.

BTW, the $2k plasma they could not afford to buy to impress the people they don't know is now worth $2.


----------



## Smurf1976 (15 January 2012)

Eager said:


> People DO have the money to buy Australian cars; they just choose not to. It is comical to see a woman trying to put the weekly shopping in the back of a new Hilux, a car more expensive to buy, more expensive to maintain and service, and which uses a more expensive fuel than a bread-and-butter Falcodore that would be eminently more suitable and provide far greater value for money. The local car industry has been talked down too much; the products made here are actually quite good but suffer from the perception that they do not provide value for money. In fact they are very economical to run and maintain for what they are - and for what they are capable of.



1. Offer a more suitable engine, preferably a diesel. The whole concept of the 4.0 litre engine that Ford use is simply too far behind the times to be credible in 2012. Holden does have a new engine and that's good, but Ford need to get their act together. 

2. 5 year / 100,000 km warranty as standard. No excuse for anything less than that.

3. Fix the dud brakes on the Fords. Not sure if it's still an issue now but a few years ago we had a Falcon at work (I drove it 95% of the time and I'm no rev head) which needed the brakes attending to after less than 50,000 km which is truly ridiculous. Never had trouble like that with Japanese cars. 

4. Door locks also need fixing. There have been models where if you operate both the interior and exterior door opener at the same time (easily possible if you have children) then it actually breaks the lock mechanism and the door can't be kept closed (car needs towing). That should have been a recall.

5. It took several months to replace the diff in a car that was still under warranty. I'm in Hobart, the factory is in Victoria and this was a warranty job being looked after by the Ford dealer. I'd have thought it would be next day replacement or at most a week.

I'm in favour of retaining the Australian car industry but I won't deny that Ford and Holden both have some issues to sort out with their product and after sales service. Toyota are very much ahead of them.


----------



## Eager (15 January 2012)

^ 1. Diesels are not always cost effective, for the reasons that i listed in my previous post. But they are available on the Territory and are selling well. Ford will soon release a 4 cyl engine for its Falcon, but again, due to negative press, it is being mentioned in the same vein as Holden's ill-fated 4 c yl Commodore from 30 years ago. In fact the new engine in the Falcon is almost comparable in power to the 6, but admittedly it will lack torque, just like Holden's 3 litre base engine does, so unfortunately it will bring the Falcon back to the pack.  Happily the 6 will still be available. 

2. Agree.

3. As in warped rotors? That was a minor inconvenience on previous models, but covered under warranty. They used soft parts to increase brake effectiveness. Trust me, it is not an issue on the current model.

4. No experience with that problem, but I challenge you to try it on other makes as well...

5. Never had an issue with either of my BA, BF or FG.

Toyotas have had several well documented wordwide recalls in the past few years; more than the local manufacturers. They are behind in design aspects too. I remember when the Aurion first came out, it still had inward facing bootlid hinges that crush your luggage instead of struts! No split-fold rear seat either. Plus, you look out of place driving one unless you are wearing a cardigan and fluffy slippers.


----------



## Macquack (15 January 2012)

Eager said:


> 5. Never had an issue with either of my BA, BF or FG.




The BA Falcon is notorious for their noisey diff. I have a BA XR6 Turbo utility and except for the diff noise which can only be drowned out by the radio being played very loud, is a great vehicle.


----------



## Glen48 (15 January 2012)

Hyundai offer 3 yrs warranty on their cars Benz 12 mths I would argue a Gezt is just as well build as a Benz if not better, which show if the right people are in power we can do it.
 a CNC machine / robot Benz use is no better or worse than  Hyundai except Hyundai most likely built it.


----------



## Smurf1976 (15 January 2012)

Eager said:


> ^ 1. Diesels are not always cost effective, for the reasons that i listed in my previous post. But they are available on the Territory and are selling well.



Indeed. Whether or not they are cost effective, it seems that customers do want them so the manufacturers are silly not to offer this option with other body types. Give the customers a choice of engine and let them decide.

I do want to see the industry survive, but there's no point denying problems where they exist. Fuel efficiency has thus far been one such area.


----------



## Trembling Hand (23 May 2013)

Good bye Ford,

http://theage.drive.com.au/motor-news/ford-confirms-plant-closures-20130523-2k22c.html


----------



## McLovin (23 May 2013)

Good riddance to crap cars.

What will they do at Boganpalooza, I mean Bathurst, with Fords made by foreigners!


----------



## CanOz (23 May 2013)

Trembling Hand said:


> Good bye Ford,
> 
> http://theage.drive.com.au/motor-news/ford-confirms-plant-closures-20130523-2k22c.html




I saw something from TTN that Gillard was going to throw some more money at it again....can't log on at the moment....

Holden will be next. 

Manufacturing in Australia is dying a slow death...The Unions better milk whats left of it before it kicks the bucket all together...:horse:

CanOz


----------



## Trembling Hand (23 May 2013)

CanOz said:


> Manufacturing in Australia is dying a slow death..




I was very surprised when I had a look at how small it is. Is this right? less than 10 %. And we give these multi nationals millions to make uncompetitive rubbish. Madness.






McLovin said:


> Good riddance to crap cars.
> 
> What will they do at Boganpalooza, I mean Bathurst, with Fords made by foreigners!




What about poor old Adelaide. The clipsal 500 is their biggest social weekend. LOL!


----------



## McLovin (23 May 2013)

Trembling Hand said:


> I was very surprised when I had a look at how small it is. Is this right? less than 10 %. And we give these multi nationals millions to make uncompetitive rubbish. Madness.




Yeah it's right. I think if we're going to be viable in manufacturing then we need to be doing something other than putting leather seats in a taxi cab and trying to flog it as a luxury vehicle. They can do that in Korea for half the price.

We need to move up the value chain. The problem is the guy who has stood on the production line fitting wiper blades to shiny new Fairmonts is going to struggle to do anything else.

CanOz would know better but food production seems to be a logical one, IMO.


----------



## CanOz (23 May 2013)

McLovin said:


> Yeah it's right. I think if we're going to be viable in manufacturing then we need to be doing something other than putting leather seats in a taxi cab and trying to flog it as a luxury vehicle. They can do that in Korea for half the price.
> 
> We need to move up the value chain. The problem is the guy who has stood on the production line fitting wiper blades to shiny new Fairmonts is going to struggle to do anything else.
> 
> CanOz would know better but food production seems to be a logical one, IMO.




Yeah i think there is a huge opportunity for Australian business's to be flogging high quality whole foods to Chinese. They can't get enough of things like milk powder, and fruit. Its been a big turn around. They're sick of eating their own poisoned food and looking for imports...too bad you couldn't ship over some air!

That's one Australian manufacturing has going for it, QUALITY....

The dollar is obviously not helping much though...for exports.

CanOz


----------



## prawn_86 (23 May 2013)

CanOz said:


> The dollar is obviously not helping much though...for exports.




To be honest it just depends on the business and how savvy/flexible/dynamic the management are.

I work with exporters who haven't sold anything since we went above parity, and others who have had record months above parity. I also work with importers who are having record months now, and others who will not buy below parity because they think it is too low and cant make their margin (despite longer term anything above parity being very very rare).

It just depends how each company and their management adapts. The proactive ones do well, the reactive ones are the ones who continually moan and whose stories we see


----------



## Julia (23 May 2013)

From AAP


> For those working people as they absorb this news I want to say to them we will make sure you are not left behind."
> 
> Ford Australia currently employs more than 3500 people at its manufacturing plants at Broadmeadows and Geelong.
> 
> ...




What is it about the car industry that sees Ford employees receive the above special assistance?
People are losing their jobs in smaller concerns every day, but are not, as far as I'm aware, able to access any similar level of assistance.

What am I missing here?


----------



## Gringotts Bank (23 May 2013)

Julia said:


> From AAP
> 
> 
> What is it about the car industry that sees Ford employees receive the above special assistance?
> ...




A big employer supposedly has greater benefit to the economy as a whole.  The same reason some US banks were saved.


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## Julia (23 May 2013)

Gringotts Bank said:


> A big employer supposedly has greater benefit to the economy as a whole.  The same reason some US banks were saved.



Might have been cheaper to just hand out all the industry assistance funds on a per capita basis to each worker who is now eventually and inevitably losing their jobs.

I can't see the point in using taxpayer funds to prop up the manufacturing of something for which there is next to no market.


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## Zedd (23 May 2013)

Julia said:


> I can't see the point in using taxpayer funds to prop up the manufacturing of something for which there is next to no market.




Another argument in support of assistance besides the large employer is maintaining the skills in Aus. I'm working in the UK atm and they're seeing the effects now of what happens if you outsource/export skilled labour roles/manufacturing and get rid of apprenticeships. They're currently facing highish unemployment and yet I guarantee any Australian with a trade who grabs a visa would have a job within a week of landing on British soil. In conjunction with construction and mining, manufacturing is where these skills are learnt and practiced. 

Once those skills are gone it's very hard to rebuild them within a community, especially if there's nowhere to train on the job.


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## Tyler Durden (25 May 2013)

> Earlier, Holden boss Mike Devereux says his company would seek more government help to keep the Australian auto industry viable - and that the handouts were a great deal for the nation.




http://www.adelaidenow.com.au/busin...hop-in-australia/story-fndbbp4c-1226649540331

Holden has obviously decided in their boardrooms to take advantage of this, now telling the government "look what happened to Ford, if you don't give us more money, the same will happen to us!"

So the obvious moral to the story is, start up a huge failure of a business, hire as many people as you can, and you can then ask for government handouts on the basis that if they let your business die, then many people will lose their jobs.


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## aarbee (25 May 2013)

It is sad to see the manufacturing base in Australia shrinking so rapidly.  One thing that surprises me about the talk from commentators and politicians is that in explaining away the reasons for events like Ford's closure, one thing that is virtually never mentioned is that our labour costs have just become prohibitively high in relation to our competitors in the world is the biggest reason that we are in this situation.  

Our PM et al will talk about the high rate of AUD etc but never mention that with Labour policies and the free rein it affords to unions, it is inevitable that Holden and Toyota will also go, ringing the death knell for big manufacture in Oz. A high Aussie Dollar is the commonest factor mentioned to explain away all problems. Auto manufacturing like other businesses, has been dying a slow death for many years before the rise of our Dollar. The Ford CEO mentioned that the cost of manufacturing in Australia is twice that of Europe (yes twice!!) and four times that of Asia.  If this is the case, where is the hope for us. No amount of subsidy is going to help the moribund manufacturing industry. Think of oil refineries, steel industry, Aluminium refineries, textiles and garments manufacturing etc, etc.

Unions and Labour pollies talk as if the sole reason for businesses is to provide employment. God forbid if they have the idea of turning a profit as a motive. The real tragedy is that they actually appear to believe in this. They would tax businesses and squeeze them out in every way to increase labour remuneration even if it kills the industry. Talk about killing your golden goose!!!

What we need is a Maggie Thatcher to beat some sense into the unions. Unfortunately, even the Libs don't seem to have any one in the leadership with the gumption to do what is necessary. Perhaps, the rot is too deeply set in our system. The slightest hint of anything that Labour can relate to Work Choices prompts them to shout their throats hoarse about how the sky is going to fall. Tragically, it does seem to have a traction in public opinion and leads to the Coalition politicians scampering to distance themselves from it. 

R&D, innovation, services  etc is what our country is good at and have advantage over our competitors in the world.  Reducing funding from Universities is a great way of killing that Golden Goose too. Looks like Labour, in order to please their Union Masters will do everything to stifle businesses and dumb down the nation. 

End of Rant!!!


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## Smurf1976 (25 May 2013)

aarbee said:


> Think of oil refineries, steel industry, Aluminium refineries, textiles and garments manufacturing etc, etc.



Oil refineries. We used to have 10 of them at one point. 3 in Victoria, 3 in NSW, 2 in Qld, 1 in SA and 1 in WA.

Thus far all refining capacity in SA has been closed, and only 1 refinery is still operating in NSW but that is to be closed in 2014. There are 2 refineries still operating in Vic, but one of them has been downsized and the other is for either sale or closure by its' owner. So in the not too distant future it seems that we'll have 4 operating refineries at most and the rest of our liquid fuel will be imported.

Steel. There used to be 3 major steel works in Australia. 2 in NSW and 1 in SA. One of the plants in NSW has been flattened some years ago and the other now only still operates 1 furnace. So the only one that could be considered "fully operational" is in SA - but it would be a brave person who bet on the long term future of that. BHP itself got out of the steel business years ago - they saw it coming.

Aluminium - A smelter in NSW closed recently and Rio Tinto is getting out of the industry. It's no secret that Bell Bay Aluminium (Tas) is struggling financially and is basically being run into the ground - it's just not worthwhile investing anything so they're just running until it literally falls apart and then it's over. It's much the same with the other Australian smelters too.

Ferro Alloys - There's only one producer in Australia, that being the Tasmanian Electro-Metallurgical Company (TEMCO). The plant shut down for 3 months a year or so ago, and was only restarted on the basis that the Hydro is supplying them with off-peak electricity to run it (whereas previously it was a 24/7/365 operation). 

And on I could go. Manufacturing is pretty much stuffed in Australia these days. Practically every factory that was around in the past is either gone already or seriously struggling these days.

Talk to any of them and it's the same story:

1. Australian wages are too high.
2. The AUD is too high.
3. Electricity has become too expensive in recent times.
4. Gas is becoming expensive.
5. Transport costs are too high and services aren't up to scratch. 
6. Modernisation or expansion (to gain economies of scale) faces too much red and green tape. 
7. Overseas competitors have advantages in terms of lower rates of taxation and/or indirect government assistance and guaranteed home markets.

That list covers the majority of the problems to my understanding. Unless it falls far lower than anyone is expecting, literally to somewhere around 25 US cents, simply reducing the value of the AUD will not in itself fix the problems.

Australia is no longer competitive at manufacturing of practically anything. The trouble is, we're rapidly going the same way with administration and services as the white collar workers in the cities will soon find out. 

Can anyone name a single industry other than iron ore where Australia is truly competitive? We're being priced out of gas and a lot of the smaller mines are struggling so even mining isn't as strong as many think once you take a few big pits in WA out of the picture.


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## Tyler Durden (25 May 2013)

aarbee said:


> It is sad to see the manufacturing base in Australia shrinking so rapidly.  One thing that surprises me about the talk from commentators and politicians is that in explaining away the reasons for events like Ford's closure, *one thing that is virtually never mentioned is that our labour costs have just become prohibitively high in relation to our competitors in the world is the biggest reason that we are in this situation.*




Strongly agree.


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## MrBurns (25 May 2013)

Tyler Durden said:


> Strongly agree.




Agree also ---
Geelong is stuffed I really dont know how they'll survive after this, just look at Detroit


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## Smurf1976 (25 May 2013)

MrBurns said:


> Agree also ---
> Geelong is stuffed I really dont know how they'll survive after this, just look at Detroit



Worth noting that the oil refinery in Geelong is being sold by Shell.

Generally speaking, when big companies sell assets like that it's only a matter of time until they are closed completely. A smaller company buys it up and runs it until things wear out and then it's game over. Seen that one before.....


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## MrBurns (25 May 2013)

Smurf1976 said:


> Worth noting that the oil refinery in Geelong is being sold by Shell.
> 
> Generally speaking, when big companies sell assets like that it's only a matter of time until they are closed completely. A smaller company buys it up and runs it until things wear out and then it's game over. Seen that one before.....




Yes a tragedy in the making , Geelong should be developed into the Silicon Valley of Australia...


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## Dowdy (25 May 2013)

aarbee said:


> Unions and Labour pollies talk as if the sole reason for businesses is to provide employment. God forbid if they have the idea of turning a profit as a motive. The real tragedy is that they actually appear to believe in this. They would tax businesses and squeeze them out in every way to increase labour remuneration even if it kills the industry. Talk about killing your golden goose!!!
> 
> What we need is a Maggie Thatcher to beat some sense into the unions. Unfortunately, even the Libs don't seem to have any one in the leadership with the gumption to do what is necessary. Perhaps, the rot is too deeply set in our system. The slightest hint of anything that Labour can relate to Work Choices prompts them to shout their throats hoarse about how the sky is going to fall. Tragically, it does seem to have a traction in public opinion and leads to the Coalition politicians scampering to distance themselves from it.
> 
> ...




How right you are.

Maybe when unemployment reaches double digits then they'll put work choices back in. Problem is the union thugs and gangsters believe they have the right to high wages while working less hours and then when the industry collapses they blame everyone except themselves.

Or we can just all vote for Clive Palmer for PM! I'm sure he'll show unions who's boss


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## sptrawler (25 May 2013)

I think the loss of the 'Falcon six' is a disaster, it is probably the most robust, cheapest to maintain and in the long term cheapest to run car in Australia.
How many Ford Falcon taxis do you see, like all of them, 95% of taxis are 6 cyl falcons. Why? because they run forever and are cheap to fix. 
How many Toyota Camry or Nissan Maxima taxis, none.

Wait untill the owners of the Mazda2 want a new radiator.lol Wait untill the owner of the VW Golf requires a timing belt, new clutch or heaven forbid a DSG gearbox rebuild.

The best outcome, would be for the Holden and Ford workers to band together and take over the ford plant. Then at least you have an Australian product made by Australians for Australians.


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## Smurf1976 (25 May 2013)

sptrawler said:


> Wait untill the owners of the Mazda2 want a new radiator.lol Wait untill the owner of the VW Golf requires a timing belt, new clutch or heaven forbid a DSG gearbox rebuild.



I get your point and you are probably correct.

But most car buyers these days don't actually keep the car that long. If you're buying new then, for most people, major repairs will be fully covered by warranty (or insurance if an accident) and the car will be sold by the time it's necessary to actually pay for parts. And if you're a second hand car buyer then your choices are pretty much set by what new car buyers are doing.

The big problem with Ford however, from my own experience at least, relates to customer service. I've dealt with them on plenty of occasions regarding fleet vehicles and it's always the same cheap service. I don't expect a red carpet to be rolled out, but I do expect them to answer the phone during business hours and I do expect them to have parts in stock for current model vehicles rather than doing "patch up" jobs and making excuses. Suffice to say that Toyota, Mitsubishi, Nissan and VW dealers don't seem to have these problems.


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## sptrawler (25 May 2013)

Smurf1976 said:


> I get your point and you are probably correct.
> 
> But most car buyers these days don't actually keep the car that long. If you're buying new then, for most people, major repairs will be fully covered by warranty (or insurance if an accident) and the car will be sold by the time it's necessary to actually pay for parts. And if you're a second hand car buyer then your choices are pretty much set by what new car buyers are doing.
> 
> The big problem with Ford however, from my own experience at least, relates to customer service. I've dealt with them on plenty of occasions regarding fleet vehicles and it's always the same cheap service. I don't expect a red carpet to be rolled out, but I do expect them to answer the phone during business hours and I do expect them to have parts in stock for current model vehicles rather than doing "patch up" jobs and making excuses. Suffice to say that Toyota, Mitsubishi, Nissan and VW dealers don't seem to have these problems.




Trust me smurph, they are all the same. I just sold a 2005 VW Golf 2.0l tdi, it needed a timing belt, quote $1600 also on a couple of occassions I smelt clutch. So I enquired how much for a replacement, was quoted $3000.
Time to move it on.
A friend of mine who runs a radiator business, was telling me a certain Japanese small car company, allows 17hrs labour to replace a radiator.lol
As for the Ford, like I said 99.9% of taxi drivers can't be wrong.
They run the car that gives them the best $/km return.
But it's all over, just another brick in the wall, in two generations people will be wondering what happened to the "lucky country".IMO


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## Dowdy (26 May 2013)

sptrawler said:


> As for the Ford, like I said 99.9% of taxi drivers can't be wrong.





That's just because the taxi companies negotiated a contract with ford to supply them cars. Nothing to do with reliability. Ford just probably gave them the best deal or they're on a 20yr contract to supply cars

I went to Cairns last year and all the taxis are Prius there. I'm guessing Toyota got the contract up north


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## FlyingFox (26 May 2013)

Dowdy said:


> That's just because the taxi companies negotiated a contract with ford to supply them cars. Nothing to do with reliability. Ford just probably gave them the best deal or they're on a 20yr contract to supply cars
> 
> I went to Cairns last year and all the taxis are Prius there. I'm guessing Toyota got the contract up north




+1. I see enough prius taxi's and even a few VW with diesel engines. Also I think it might have been something to do with the fact that you could either get these (fords and holdens) from the factory with LPG or without the petrol fuel assembly which would make it much cheaper to retrofit to LPG.


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## sptrawler (26 May 2013)

Dowdy said:


> That's just because the taxi companies negotiated a contract with ford to supply them cars. Nothing to do with reliability. Ford just probably gave them the best deal or they're on a 20yr contract to supply cars
> 
> I went to Cairns last year and all the taxis are Prius there. I'm guessing Toyota got the contract up north




That is the biggest load of crap I've heard, ask any taxi driver, why they run a falcon. By the way I don't have a falcon or a ford. 
Just stating a fact, as it has always interested me why most taxis are falcons, I just ask all the taxi drivers.

What they say is a commodore is only good for 300 - 400,00k's whereas a falcon is good for 750-1mk's.
Apparently the suspension, and drive train is more robust.

Then again, probably best not to ask them, then you wouldn't be able to make off the cuff remarks, with no basis.


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## FxTrader (27 May 2013)

The problem for Ford is not just the cost of building cars here.  They don't build the cars enough people want to buy in the domestic market to make manufacturing here financially viable.  No export business meant they were the most vulnerable to any downturn in market share and Falcon sales have simply crashed.  Paying a company $100M/yr in subsidies to build cars in Aus with no plan to expand production for export is just silly for a small, highly competitive market like ours.  Ford's business plan here was a failure and deserved no more support.

I accept that there are compelling arguments for subsidizing local car manufacturing but Ford's approach to local manufacturing was doomed.  Holden is on the brink as well, with local Commodore and Cruze sales critical to any decision to keep manufacturing here beyond 2012 (seems unlikely).


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## Tyler Durden (27 May 2013)

Does anyone remember VW's back in the 90's? I always thought that was a pretty crap car brand, but look around now, and they seem to have re-invented themselves.


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## waza1960 (27 May 2013)

> That is the biggest load of crap I've heard, ask any taxi driver, why they run a falcon. By the way I don't have a falcon or a ford.
> Just stating a fact, as it has always interested me why most taxis are falcons, I just ask all the taxi drivers.
> 
> What they say is a commodore is only good for 300 - 400,00k's whereas a falcon is good for 750-1mk's.
> Apparently the suspension, and drive train is more robust.




 Why not ask a mechanic. I was one a few careers ago and my brother still owns a workshop.

  Falcons are a little cheaper to maintain but I see twice as many Falcons in his workshop than Commodores.
 Falcons probably are a little more robust in the drivetrain but the Holden V6 engines are much better.


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## Dowdy (27 May 2013)

Tyler Durden said:


> Does anyone remember VW's back in the 90's? I always thought that was a pretty crap car brand, but look around now, and they seem to have re-invented themselves.





same with Hyundai, Kia, Mazda, Honda and pretty much every brand except Holden and Ford. 

And it's not just the quality, they improved what matters the most these days - size and fuel efficiency. Here you have Holden making their 6L 300kw HSV saloon to get on every front cover car magazine and the quiet Japanese and Koreans tiptoe through the back door and took over the market.


Maybe in 20 years time, the chinese will take over the market but you can't really reverse engineer quality, can you...


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## waza1960 (27 May 2013)

> Maybe in 20 years time, the chinese will take over the market but you can't really reverse engineer quality, can you...




 They said the same thing about the Japanese then the Koreans. Chinese will definitely make quality cars in the future it's inevitable .India though not so sure LOL


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## Smurf1976 (27 May 2013)

FxTrader said:


> Holden is on the brink as well, with local Commodore and Cruze sales critical to any decision to keep manufacturing here beyond 2012 (seems unlikely).



I'm willing to make a pretty serious bet that Holden will continue manufacturing in Australia beyond *2012*. 

Seriously, I agree with your point. Ford (and Holden) need to build the cars people actually want to buy. Regardless of what is wrong or right, they need to supply what the market wants.


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## waza1960 (27 May 2013)

The thing about this situation that gets me is the lack of Import duties. 
 Both sides of politics had a role in reducing import duties to zero decimating every manufacturing industry in Australia. Why for what reason when most other countries have trade protection?
  IMO its similar to the Carbon tax the pollies big noting themselves by frontrunning most other countries so they can say look at me.


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## waza1960 (27 May 2013)

The thing is Holden is holding up fairly well considering they have just realised the new Commodore.
 Plus they have being exporting for many years as well.
 Here's the total top ten vehicle sales for 2012


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