Let Oz Car Industry Die

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?

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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.

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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.

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?

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.

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?

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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.

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.

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

I'm painting my Wagoner red.

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.

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...

doubt that could work... maybe

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.

As the Coalition struggles to reach a consensus on whether to continue its support for car industry subsidies, Mr Macfarlane said the sector was at a vital crossroads and needed to be refocused.

“There is a realistic chance that it (the car industry) will collapse entirely,” he told ABC radio.

“If we look across the world most governments support their car industry and in the case of the Australian industry it does need a significant redirection.

“We need a local car industry in Australia that not only competes against imports but also allows us to export into that global market.

“If the government is to be involved then it needs to be involved in a very strategic approach where taxpayer dollars are reaping a return for the country.”

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

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.

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...

Let's stop funding inefficient companies.

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.

Starcraftmazter said:

Bloody thieves. Between this and the housing bubble, it all makes me want to move to Switzerland

If only I knew German.

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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.

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.

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

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...

kennas said:

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

:

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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.

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...

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Yes kennas,

That is the only argument for keeping it.

gg