Bringing back Australian Manufacturing: Discard programmed obsolescence

[sptrawler]

As I said a few years back, there is no reason Australia can't develop a battery manufacturing base, battery manufacturing is highly automated so labour costs aren't an issue.
The raw materials are already being partially processed here, so that again helps reduce overheads and most importantly they are space efficient (you can get a lot of material onto a ship) therefore transport costs wouldn't affect their price competitiveness.
It looks as though a ground swell is taking shape and who knows it might happen.
Time will tell, whether they are real opportunities, or opportunities to milk the taxpayer. There is a lot of hyperbole and white noise around the issue at the moment, hopefully something comes of it.

https://www.minister.industry.gov.au/ministers/husic/media-releases/supporting-australias-battery-manufacturing-industry-charge-ahead

Entrepreneur declares Australia’s first battery gigafactory

Brian Craighead defied critics to build Australia’s first battery gigafactory and says this is the start of his ambition to drive the clean energy transition.

www.afr.com

An Australian entrepreneur plans to unleash Anthony Albanese’s dream of making Australia a battery manufacturing powerhouse by building multiple gigafactories nationwide as new cathedrals to the clean energy age.

Brian Craighead’s brand of environmental and industrial evangelism has already attracted former prime minister Scott Morrison and current industry and science minister Ed Husic to visit his brainchild: the nation’s first lithium-ion battery

Australia has all the important minerals for EV batteries. So why aren't we making them?

Most of the world's new electric vehicles contain minerals from Australia. So should we make EVs locally, and what would it take?

www.abc.net.au

 

[Value Collector]

In the 50's and 60's we made household appliances, whitegoods, mowers, tv sets, radios, clothes and footwear, cars, aeroplanes (Victa), computers and that was for a population of 10 million or so.

Yet the standard of living was lower, eg out door toilets were common, a lot of houses didn’t have running hot water, no air conditioning, the avergae wage didn’t allow for things like regular eating out or coffee runs etc.

Sure we manufacture a smaller range of things now, but we have some big industries high profit margin industries that pay well, and a service industry that was unimaginable back in the 50’s.

I don’t think the guys working in trendy barber shops and cafes today would want to go back to working in sweat shops.

 

[sptrawler]

The big problem with a service economy the wages are low, the higher paying skilled jobs in mining and manufacturing are decreasing, Bali has a massive service industry but they don't have a fabulous living standard.
Might be to do with the size of the population and per capita GDP, not a reflection of a grateful service sector workforce.
Thailand is a country that is industrializing and their standard of living is improving, as is the strength of the Thai baht against the Australian dollar.

 

[Smurf1976]

Yet the standard of living was lower, eg out door toilets were common, a lot of houses didn’t have running hot water, no air conditioning, the avergae wage didn’t allow for things like regular eating out or coffee runs etc.

There's plenty of people today for whom factory work would be a huge step up economically.

We've got an awful lot of people trying to make a living as a delivery driver, taxi driver (Uber), wannabe hotel owner (Airbnb) and doing everything from mowing lawns to washing dogs. The kind of work that was traditionally done as a temporary or second job, or which was done by 13 year old kids paid in cash, is now being done by adults.

Any skilled job in manufacturing or other heavy industry would massively improve their circumstances.

 

[farmerge]

There's plenty of people today for whom factory work would be a huge step up economically.

We've got an awful lot of people trying to make a living as a delivery driver, taxi driver (Uber), wannabe hotel owner (Airbnb) and doing everything from mowing lawns to washing dogs. The kind of work that was traditionally done as a temporary or second job, or which was done by 13 year old kids paid in cash, is now being done by adults.

Any skilled job in manufacturing or other heavy industry would massively improve their circumstances.

Unfortunatly the grain of rice a day wages paid overseas will be the killer for manufacturing industries here.
As much as I believe that we should have much larger manufacturing and value adding businesses I can't see it being a reality in the foreseeable future.
I wonder how many would want to compromise the standard of living we have all become accustomed to over the years.

 

[qldfrog]

Unfortunatly the grain of rice a day wages paid overseas will be the killer for manufacturing industries here.
As much as I believe that we should have much larger manufacturing and value adding businesses I can't see it being a reality in the foreseeable future.
I wonder how many would want to compromise the standard of living we have all become accustomed to over the years.

I once had an exchange here about service job not bringing real wealth to the economy, and as such not being much for a country.
Service is recirculation.it is needed healthy but not enough.
Of course, my job in IT O/S was bringing wealth in, same as Philippine nurses sending money back home but few of the service industry are similar and even foreign students are now seen as it is: a paid entry fee to a permanent residency.
We do not export education, we import more citizens
I remember seeing all these posts during Covid on the need to bring production back in Australia, indeed a fair wish and lately how we will become an H2 giant or a battery major hub or whatever a CO2 capture field or even a fusion major..not to think of an exporter of solar energy....
Seriously... yes we could ;of course we could but we won't.
For any added value business, you need land...very expensive here, infrastructure..quite missing, rights to build , operate, and keep ownership.
Here come green and red tapes, councils leeching fees and even corruption, Voice and aboriginal sacred sites questioning the longevity of any deal,then once the whatever is built, you need to run it with one of the most expensive on earth energy, expensive manpower,and ongoing fees extra taxes and levies added by the day
So it is clear that the only successful business in Oz is one which:
Can not be based elsewhere (due to regulation or physical presence)
So your cornershop, hairdresser,bank,Woolies, mines and in a limited way raw agriculture.
Even cattle or sheep farming which is the farming of grass plus added value is not exactly a resounding success overall.
I am doom and gloom I know but prove me wrong..please...Every day we ship more of our ground as coal,iron ore, and less is left behind.
Worse, we are often left with liabilities.
Ultimately, you realise we have only one advantage and this is a very small population on a massive rich land so the breadcrumbs are enough to provide a good way of live to our citizens but sadly our population is growing and so the cake of real wealth is getting smaller.
I think this summarises Australia as it is and will be..
The Argentina or Brasil of the past century

 

[Value Collector]

There's plenty of people today for whom factory work would be a huge step up economically.

We've got an awful lot of people trying to make a living as a delivery driver, taxi driver (Uber), wannabe hotel owner (Airbnb) and doing everything from mowing lawns to washing dogs. The kind of work that was traditionally done as a temporary or second job, or which was done by 13 year old kids paid in cash, is now being done by adults.

Any skilled job in manufacturing or other heavy industry would massively improve their circumstances.

The key word you used there was “skilled”, there is already shortages of skilled labour, and anyone wanting a job can pretty much get one.

Not only that, we currently have shortages of industrial property, we can’t build them fast enough, which again is due to skill shortages and low unemployment rates.

So I think we are doing ok in the industrial space, if we try to force extra investment in the areas we are not good at we will surely be detracting from areas we are good at.

 

[Value Collector]

I once had an exchange here about service job not bringing real wealth to the economy, and as such not being much for a country.
Service is recirculation.it is needed healthy but not enough.
Of course, my job in IT O/S was bringing wealth in, same as Philippine nurses sending money back home but few of the service industry are similar and even foreign students are now seen as it is: a paid entry fee to a permanent residency.
We do not export education, we import more citizens
I remember seeing all these posts during Covid on the need to bring production back in Australia, indeed a fair wish and lately how we will become an H2 giant or a battery major hub or whatever a CO2 capture field or even a fusion major..not to think of an exporter of solar energy....
Seriously... yes we could ;of course we could but we won't.
For any added value business, you need land...very expensive here, infrastructure..quite missing, rights to build , operate, and keep ownership.
Here come green and red tapes, councils leeching fees and even corruption, Voice and aboriginal sacred sites questioning the longevity of any deal,then once the whatever is built, you need to run it with one of the most expensive on earth energy, expensive manpower,and ongoing fees extra taxes and levies added by the day
So it is clear that the only successful business in Oz is one which:
Can not be based elsewhere (due to regulation or physical presence)
So your cornershop, hairdresser,bank,Woolies, mines and in a limited way raw agriculture.
Even cattle or sheep farming which is the farming of grass plus added value is not exactly a resounding success overall.
I am doom and gloom I know but prove me wrong..please...Every day we ship more of our ground as coal,iron ore, and less is left behind.
Worse, we are often left with liabilities.
Ultimately, you realise we have only one advantage and this is a very small population on a massive rich land so the breadcrumbs are enough to provide a good way of live to our citizens but sadly our population is growing and so the cake of real wealth is getting smaller.
I think this summarises Australia as it is and will be..
The Argentina or Brasil of the past century

The service industry does bring wealth, by adding value. It’s no different to any other value adding industry.

The whole purpose of the economy is to gather resources and transform them into goods and services that we consume to improve the quality of our lives.

Some of those products have long lived, some short lives. But the service economy is definitely part of that process of taking resources and transforming them into goods and service that improve our lives.

———————

Also, you could say without the service industry in Australia we would have a lot less tourism, both less international visitors and less Australians spending their tourist dollars here.

How much wealth does Las Vegas and Disneyland bring into the USA from over seas??? Lots

 

[sptrawler]

The service industry does bring wealth, by adding value. It’s no different to any other value adding industry.

The whole purpose of the economy is to gather resources and transform them into goods and services that we consume to improve the quality of our lives.

Some of those products have long lived, some short lives. But the service economy is definitely part of that process of taking resources and transforming them into goods and service that improve our lives.

———————

Also, you could say without the service industry in Australia we would have a lot less tourism, both less international visitors and less Australians spending their tourist dollars here.

How much wealth does Las Vegas and Disneyland bring into the USA from over seas??? Lots

You pretty well nailed it there VC do you actually know how many tourists visit Australia a year?
About 10million on a good year, do you know how many visit Disney World? Approx 58million.
Tourism is never going to be Australia strong point, in our or our kids lifetime.
So all these service sector jobs are doing is feeding our circular economy, give ourselves more money, so that we can afford to keep our coffee shop going, which in turn employs all our out of work kids with degrees, who haven't got a job because there aren't any "real" jobs only service sector jobs.

 

[sptrawler]

There's plenty of people today for whom factory work would be a huge step up economically.

We've got an awful lot of people trying to make a living as a delivery driver, taxi driver (Uber), wannabe hotel owner (Airbnb) and doing everything from mowing lawns to washing dogs. The kind of work that was traditionally done as a temporary or second job, or which was done by 13 year old kids paid in cash, is now being done by adults.

Any skilled job in manufacturing or other heavy industry would massively improve their circumstances.

Absolutely spot on @Smurf1976 , the only thing holding up Australia's standard of living is our strong welfare system, which in turn drives a high basic wage, to pay for what were in the past part time or after school jobs.
This in turn puts that welfare cost on to middle class Australia and small to medium size business, which in turn pushes the middle class further down the scale as it is paying to support a non productive industry.
What the answer is I certainly don't don't know, but not demanding value adding where it is feasible here is a tragedy, driven by a self serving attitude of those in Government.
Allowing gas to be processed on a floating facility, rather than building it on land, which in turn builds more offshoot industries is an example.
Building a rare earth processing facility in Malaysia rather than here is another, funny now that a dirty pre processing facility is required, all of a sudden that can be built here, sounds like taking the pizz to me.
All of a sudden when we have a pandemic and can't get vaccine, a manufacturing facility can be built a Tullamarine, well ffck me why all of a sudden is it feasible, rather than impossible.
FW's led by FW's, no wonder the media has no trouble leading the mob around by the nose, they can't think for themselves.
My rant for the week.

 

[farmerge]

I once had an exchange here about service job not bringing real wealth to the economy, and as such not being much for a country.
Service is recirculation.it is needed healthy but not enough.
Of course, my job in IT O/S was bringing wealth in, same as Philippine nurses sending money back home but few of the service industry are similar and even foreign students are now seen as it is: a paid entry fee to a permanent residency.
We do not export education, we import more citizens
I remember seeing all these posts during Covid on the need to bring production back in Australia, indeed a fair wish and lately how we will become an H2 giant or a battery major hub or whatever a CO2 capture field or even a fusion major..not to think of an exporter of solar energy....
Seriously... yes we could ;of course we could but we won't.
For any added value business, you need land...very expensive here, infrastructure..quite missing, rights to build , operate, and keep ownership.
Here come green and red tapes, councils leeching fees and even corruption, Voice and aboriginal sacred sites questioning the longevity of any deal,then once the whatever is built, you need to run it with one of the most expensive on earth energy, expensive manpower,and ongoing fees extra taxes and levies added by the day
So it is clear that the only successful business in Oz is one which:
Can not be based elsewhere (due to regulation or physical presence)
So your cornershop, hairdresser,bank,Woolies, mines and in a limited way raw agriculture.
Even cattle or sheep farming which is the farming of grass plus added value is not exactly a resounding success overall.
I am doom and gloom I know but prove me wrong..please...Every day we ship more of our ground as coal,iron ore, and less is left behind.
Worse, we are often left with liabilities.
Ultimately, you realise we have only one advantage and this is a very small population on a massive rich land so the breadcrumbs are enough to provide a good way of live to our citizens but sadly our population is growing and so the cake of real wealth is getting smaller.
I think this summarises Australia as it is and will be..
The Argentina or Brasil of the past century

Mr sp Sadly you are so right.
I was reading the local farming rag I subscribe to last night, about the live export trade being brought to an end.
With the demise of live shippers will also come the end of the live cattle trade too. Hence then rhe red meat industry will not be generating a healthy income for the producers.
Overseas markets want fresh meat not chilled or boxed.
The abs here aren't set up for the volume of stock that is exported now also. Plus not enough knife hands to do the work anyway.

 

[Value Collector]

So all these service sector jobs are doing is feeding our circular economy, give ourselves more money, so that we can afford to keep our coffee shop going, which in turn employs all our out of work kids with degrees, who haven't got a job because there aren't any "real" jobs only service sector jobs.

Feeding “our circular economy” is the whole point of having an economy, the Australian and the global economy exist just to produce goods and services for consumption, whether that’s a car or a coffee doesn’t matter, as long as there is a trade balance who cares.

Imagine for a moment that we delete the service industry, and redistribute all that labour into manufacturing jobs. Would our lives be better? I don’t think so, we would all be staying at home eating Vegemite sandwiches, even TV is a service industry.

The more wealth a country has the larger its service industry will grow, and as I said it’s part of the value adding, and creates better lives for the people in the economy.

————————
I believe that looking at australia as an isolated economy and wanting it to produce everything here is old fashioned mercantilistic thinking. It’s better to think of the economy as a global economy, what is important is long term trade balance, not making everything ourselves.

 

[farmerge]

Feeding “our circular economy” is the whole point of having an economy, the Australian and the global economy exist just to produce goods and services for consumption, whether that’s a car or a coffee doesn’t matter, as long as there is a trade balance who cares.

Imagine for a moment that we delete the service industry, and redistribute all that labour into manufacturing jobs. Would our lives be better? I don’t think so, we would all be staying at home eating Vegemite sandwiches, even TV is a service industry.

The more wealth a country has the larger its service industry will grow, and as I said it’s part of the value adding, and creates better lives for the people in the economy.

————————
I believe that looking at australia as an isolated economy and wanting it to produce everything here is old fashioned mercantilistic thinking. It’s better to think of the economy as a global economy, what is important is long term trade balance, not making everything ourselves.

I understand your point of view but when one country, mostly China is the mainstay of almost everything, and they decide to slow down the export of the wanted/needed goods HELP comes to mind very quickly.

 

[Value Collector]

I understand your point of view but when one country, mostly China is the mainstay of almost everything, and they decide to slow down the export of the wanted/needed goods HELP comes to mind very quickly.

In the same way that nuclear weapons and guaranteed mutual destruction kept the peace between Russia and the USA for the last 60 years.

I feel that the more interconnected the global economy becomes, the less likely countries will be to want to cause trouble.

The more independent countries are of one enough, the easier it is to say FU to each other.

 

[sptrawler]

Feeding “our circular economy” is the whole point of having an economy, the Australian and the global economy exist just to produce goods and services for consumption, whether that’s a car or a coffee doesn’t matter, as long as there is a trade balance who cares.

Imagine for a moment that we delete the service industry, and redistribute all that labour into manufacturing jobs. Would our lives be better? I don’t think so, we would all be staying at home eating Vegemite sandwiches, even TV is a service industry.

The more wealth a country has the larger its service industry will grow, and as I said it’s part of the value adding, and creates better lives for the people in the economy.

Except the only money coming in, to underpin the circular economy, is from finite resources.

————————
I believe that looking at australia as an isolated economy and wanting it to produce everything here is old fashioned mercantilistic thinking. It’s better to think of the economy as a global economy, what is important is long term trade balance, not making everything ourselv

I don't believe we should make everything ourselves that is just stupid, I believe we should make what we have an advantage with and I believe the companies should be made to value add wherever possible. That in itself will produce secondary and tertiary industries and skilled jobs.

 

[Value Collector]

Except the only money coming in, to underpin the circular economy, is from finite resources.




I don't believe we should make everything ourselves that is just stupid, I believe we should make what we have an advantage with and I believe the companies should be made to value add wherever possible. That in itself will produce secondary and tertiary industries and skilled jobs.

Mining isn’t the only income, it’s certainly a big one, but we have many others to, and if one day the mines slowly begin to dry up, the capital and the labour will be redeployed into other things. Twiggy is already doing his best to diversify into the renewable energy business, and we won’t run out of wind and sunshine for a couple of billion years.

Also, the “service industry” is a term that is a bit cloudy, I don’t even think it’s a good word.

I mean is a baker in the service industry? Surely baking bread is a valuable activity inside our economy. I think people are too quick to judge the production of consumable short life items as not valuable.

Whether you grow the wheat, Mill the wheat, Bake the bread, make the sandwich or deliver the sandwich, you are part of the system/economy, and are improving our lives.

 

[sptrawler]

Mining isn’t the only income, it’s certainly a big one, but we have many others to, and if one day the mines slowly begin to dry up, the capital and the labour will be redeployed into other things. Twiggy is already doing his best to diversify into the renewable energy business, and we won’t run out of wind and sunshine for a couple of billion years.

Also, the “service industry” is a term that is a bit cloudy, I don’t even think it’s a good word.

I mean is a baker in the service industry? Surely baking bread is a valuable activity inside our economy. I think people are too quick to judge the production of consumable short life items as not valuable.

Whether you grow the wheat, Mill the wheat, Bake the bread, make the sandwich or deliver the sandwich, you are part of the system/economy, and are improving our lives.

Yes whatever, I think we have done it to death.

 

[qldfrog]

Mining isn’t the only income, it’s certainly a big one, but we have many others to, and if one day the mines slowly begin to dry up, the capital and the labour will be redeployed into other things. Twiggy is already doing his best to diversify into the renewable energy business, and we won’t run out of wind and sunshine for a couple of billion years.

Also, the “service industry” is a term that is a bit cloudy, I don’t even think it’s a good word.

I mean is a baker in the service industry? Surely baking bread is a valuable activity inside our economy. I think people are too quick to judge the production of consumable short life items as not valuable.

Whether you grow the wheat, Mill the wheat, Bake the bread, make the sandwich or deliver the sandwich, you are part of the system/economy, and are improving our lives.

Baking bread is useful, add value to the local economy but does not add any wealth to the country.
Some bread is even imported frozen in Oz...
And so far the only added substantial value to the country is mining export.
But as per a few year ago, you do not want to see or acknowledge it, nor do many Australian either...fair..keep all your coins in Oz...anyway, I think we all got our soap box, let's wait to the next closing business

 

[Value Collector]

Baking bread is useful, add value to the local economy but does not add any wealth to the country.

See that’s where I disagree with you, all the value adds including baking bread are adding wealth to the country, it’s just that it is consumed quickly.

Wealth is constantly being produced and consumed. Some things we produce like a hydro dam have very long lives, some things like a loaf of bread have a short life, but they are all contributing to increasing our standard of living.

Google “mercantilism” I think you are falling into that old fashioned idea that, that only trade that increases an arbitrary thing like the amount of gold in the coffers is valuable.

The only true measure of wealth of a nation is how many goods and services it produces, weather it trades that goods and services internationally or consumes them it’s self is irrelevant.

 

[Smurf1976]

The key word you used there was “skilled”, there is already shortages of skilled labour, and anyone wanting a job can pretty much get one.

Thing is, unskilled people can be trained.

Someone who's trying to make ends meet in whatever low end service industry job could indeed be trained to become an operator, tradie or even a white collar professional if given sufficient opportunity both for the training and ongoing employment thereafter.

If we look at how we used to train tradies (always known as tradesmen back then but that term's deemed sexist today ) then there were basically 4 groups. From largest to smallest:

1. Big companies that manufactured, refined or processed something.

2. Utilities especially the state owned electricity authorities.

3. Various other things run by government - the Transport Department, the Housing Commission, public transport fleets, etc.

4. A relatively smaller number trained by private contractors, builders, self-employed tradies with an apprentice, etc.

I'm less familiar with the companies in other states but if you find any group of older tradies in Tasmania and ask them where they did their apprenticeship then the answers will mostly be a list of big business acronyms and things run by government. APPM, Tioxide, ANM, EZ, TEMCO, Comalco, Sheridan, ACI, Incat, Cadbury and so on for the big companies, the Hydro in the next category as an entity unto itself albeit ultimately government owned, and in third category the various state government departments. The remaining 20% would be from the assorted builders, contractors, self-employed tradies and so on.

A key point being they all saw training as something that they needed to be doing and trained far more people than they needed to retain. That's what kept society supplied with tradies who then went to work for themselves or small business.

Part of that was multiple parties working cooperatively to make it work. Apprentices with anything run by government were commonly placed with privately run businesses, typically construction related, for a period to broaden their experience both at their trade and with how private business goes about things. Apprentices from the private sector were likewise commonly sent off to a utility or maintenance workshop run by government to do things that contractors don't do. Etc. Then of course there was a well resourced TAFE for that side of the training as well.

All up it wasn't flawless but it worked pretty well. As a system it took a huge number of high school leavers who weren't going to uni, gave them a job followed by a qualification and, in practice, often ended up unofficially but in practice also taking on the task of correcting flaws in their upbringing and setting them on a sensible path in life.

There's even as societal understanding and political aspect to all that which I see as positive. No apprentice got through in that era without the point being reinforced that business needs to be profitable and government needs things done. Business can't survive if it doesn't make money, government can't survive if the lights go out. There was far less of an ideological divide given everyone understood that it wasn't a case of one being right and the other wrong, just a different reason for being and a different way of doing things as a result.