Australian parts industry goes on the front foot

[Road_Warrior]

http://www.goauto.com.au/mellor/mell...257B2D00801651

FAPM launches campaign to get the facts out before the election

14 March 2013

By IAN PORTER

THE local parts industry has gone on the offensive in this election year with the aim of reversing negative perceptions and explaining to the public how important the car industry is to the Australian economy.

It appears the principal aim is to prevent politicians succumbing to the widespread view that manufacturing is finished in Australia.

The key ammunition for the campaign will come from an economic study that has been commissioned to accurately measure the value of the industry’s economic contribution, especially when set against the support the automotive sector receives under government assistance packages.

According to the Federation of Automotive Products Manufacturers president Jim Griffin, the campaign has been designed to inform the electorate about the size and value of the industry so voters can make an informed decision in September.

Speaking at a function to mark the start of Automotive Week, Mr Griffin said many commentators were talking about the demise of manufacturing.

“I call upon the federal sphere – the sitting Labor government and the Liberals and Nationals in opposition – to think very seriously about not making manufacturing and, specifically, the automotive industry, a political football,” he said.

“We are important to this nation. We do employ directly 50,000 people, indirectly another 200,000, far more than the mining industry does.

“We are responsible for all the fitters and turners and tradesmen who ultimately head to WA for a year or two to earn some money and then come back to the cooler climes in the eastern states,” he said in reference to the apprenticeships and other training programs conducted by automotive companies.

“We are the industry that underpins the aerospace, tool making, advanced manufacturing and high-tech industries,” he said.

Mr Griffin said the automotive industry did not get the recognition it deserved for the contributions it makes.

“We are the industry that is innovating, looking for new products, new technologies and new business partners and we deserve to be given far more support, far more credence and far more airplay, in a positive sense, than what we get today.”

“There is a lot of bad press out there that denigrates the industry, doesn’t appreciate what we do, says we are over-supported. The bottom line is, if you want a car industry, you want it because it does contribute to the country.”

“Every country around the world wants a car industry. It’s like bidding for the Olympics. If you want the Olympics you have to bid. If you want a car industry, you have to pay to keep it.”

Mr Griffin said he was concerned about the general level of ignorance about the car industry, especially outside the automotive states of Victoria and South Australia.

“We will be doing what we can to educate the voters of this country, to make sure they understand just how many cars are made here, which cars are made here, and why it is important that we continue to make cars here,” he said.

“When voters put that voting slip in that ballot box on September 14 this year, we are trying to ensure they vote for the party that is giving consideration to the continuance of manufacturing in this country, and on a global scale,” he said.

Mr Griffin said the FAPM wants to ensure that the automotive sector will continue to employ at least 50,000 people directly and 200,000 indirectly.

He also voiced the industry’s frustration about the lop-sided free trade agreements Australia has signed in the recent past that always favor offshore automotive sectors to the detriment of the Australian manufacturers.

“We also want to be given fair and reasonable opportunities to export our product and gain market share in nations and markets where, to date, we do not receive reciprocal arrangements as far as access goes,” he said, referring to FTAs with Thailand and Malaysia.

He also suggested the Government could have done more to counter the effects of the strong Australian dollar, like other countries have done, to protect their industrial bases against a deliberately weak US dollar.

“We look to someone in Government to do more for this industry to make sure we can override the position of our dollar and gain further share.”

Good job. A few home truths there, especially the swipe against the lop-sided Thai FTA.

[ryeman]

We surely don't want to simply be a paper shuffling 'services' country.

[Joe5619]

Anyone know when this "report" is due out (before/ after the election). It will be interesting to see what the true worth of this industry is...


Good on them I say!!

[Road_Warrior]

Originally Posted by ryeman

We surely don't want to simply be a paper shuffling 'services' country.

Or a country that just digs holes in the ground.

[jpd80]

Originally Posted by Road_Warrior

Or a country that just digs holes in the ground.

Or a country that thinks developing skills equals offers a career in driveway food dispensing....

We need a strong production industry in Austraila so we can offer youth pathways to engineering and technical skills.

[joolz]

I have known about this for almost 10 years as I was working in the Automotive industry as a tier 1 supplier. There is 3 tiers in supplying. Rule of thumb is that for 1 Ford employee there will be 7 in the supply chain. Without Ford, Holden and Toyota in Australia there will be thousands of jobs lost not to mention tool makers that set up all manufacturing in Australia. The Automotive industry is very important to Australia as they also help make it possible to make that fridge, stove, shed and other thinks around your home...

[Papa Smurf]

Good to see that finally people can see that not ALL Automotive workers are rip offs or dead beats. It IS a good industry and employs many.

[Brazen]

And you know what will help Australian Parts Makers? If we built more bloody cars in this country.

So my question is this? What is Ford going to do about it? They take and take and take government money but only built 35,000 cars last year. How does that help the industry?

We have Holden building Cruze locally - the only Australian built small car, we have Holden finding markets in the US even with a high dollar with the Caprice PPV and Chevy SS.

Toyota is seeking to build a new third model such as Rav4 or Kluger, we have Toyota exporting over 100,000 Camrys a year to the Middle East even though they can source cheaper LHD cars from the US or China.

So what is the plan Ford? How will you help the Automotive sector build more cars?

[mik]

lots of local industry is getting the rough end of the stick, the high dollar and allowance of cheap imports to flood the country unabated are slowly but surely sending us down the gurgler.
our leaders obviously don`t give a toss, can anyone remember any serious effort by any of our leaders to get people to buy Australian??? i`m stuffed if i can. have any of our leaders given any serious incentive to buy Australian??? i can`t recall any.
I hope the campaign works, but pollies seem reluctant to change things , it`s hard to be optimistic.

[mik]

I think Brazen some of the problem is, it is still cheaper to import global models from cheap labor countrys as far as ford is concerned, except for the falcon as it is already made and built here and most of parts are from here,
they say cruze is built here, but what is the actual content of parts made and built here?? and the same goes for toyota, they maybe slapping them together here, but where did the parts come from?? how much of the actual car is made here?

[bmorris]

I'm sorry but as much as I would love to see the car industry doing a lot better in this country at the end of the day the question remains why it isn't doing so well.

This could be a good marketing campaign for the industry however it doesn't change that car makers need to adapt to survive. If importers can still bring cars into the country cheaper then what we can build them we need to ask why?

Can we change this?

If the answer is no then we have to look at how we can do things better then the importers. There is no point complaining about the lack of tariffs, free trade agreements because they aren't going away.

Part makers and car companies alike need to learn from this. Sometimes this does mean downsizing like Ford have been doing.

[mik]

bmorris we already have good family cars that are dynamically better than most equivalent models in the price range, our local cars can be had with lpg ready from the showroom floor, our family models come with a range of performance power packages, seriously, no amount of being better will help imo,
as an analogy, if 2 guys have a foot race and one gets a 1/4 mile head start, one is always going to come out on top,
what hope do our locals have, if even the gov departments/industry buy over sea`s models because they are cheaper??? there is no getting around people will buy a 20000 dollar car when things are tight, as opposed to a 30000 dollar car even if the bigger one is more economical, that cheap initial outlay wins every time.
you would`nt say toyota is better or worse at making cars but they have a good reputation , but look how many aurions they sold.

[Joe5619]

Originally Posted by mik

I think Brazen some of the problem is, it is still cheaper to import global models from cheap labor countrys as far as ford is concerned, except for the falcon as it is already made and built here and most of parts are from here,
they say cruze is built here, but what is the actual content of parts made and built here?? and the same goes for toyota, they maybe slapping them together here, but where did the parts come from?? how much of the actual car is made here?

Why do people keep going on on on about the cruze being a "slapping them together here' job? Who really cares? Slapping them together here, with 5-10-15-20-25-30-35% (Pick a percentage) of local content is still keeping thousand’s of Australia's employed & is better than just importing them!! If we had an industry that was pumping out far far more units (I'm talking 3-4 times. Ford has the factory to pump out 200,000 cars a year), then part companies might be able to compete better & the local contact of those vehicle could increase with time. Toyota only builds ‘slapping them together here’ jobs, so you’d rather they weren’t here then??

It would be intersting to know what was the local content % on day 1 for Cruze & what is it now!!

[302 XC]

Its not just the parts industry that have suffered the hardship
What about all the little aussie manufacturers who supply retailers, these guys have been squeezed out more and more each year
Sure the parts/automotive industry is big,but while theres people who parade how wonderfull it is to save a buck here and a buck there by buying for O/S the aussie industries are doomed, the writing has been on the wall for years,yet its only now that most of the larger industries are closing or out sourcing we made a deal of it .....
Not even 10 years ago,when i worked in the metal industry, we could buy aussie made BHP steel cheaper off shore than from the darn country it was made in
Yep, gets exported, sits on a ship, then gets unloaded , then reloaded, then imported , cheaper than one side of the country to the other
Theres no government incentives to train workers to help with ailing industries,gee a 1st year apprentice gets near nothin an hour,yet flippin burgers , a no future near brain dead job pays more
The general public dont see the forest for the tress
Big aussie farmers nearly all gone,most aussie industries gone,then to throw a spanner in the works the government are selling of all our assests that actually make us as a country money

[Agile]

Great initiative by the industry group. A very under rated industry by the pollies,IMHO.
Now my question to YOU !!!, yes YOU !!! Are YOU !!! going to assist them ? How I hear you ask. Well it's pretty obvious that everyone on this forum has a pretty good idea on how to use a keyboard and perform a email procedure. How about you sending an email [ or 10] to you local Federal Member and tell them that you want them to support local industries. Tell them that you want them to stop supporting FTA's that are free trade in one direction only. Make damn sure J Hockey and T Abbot now exactly how you feel, because you can be pretty sure those two are going to be the ones calling the shots for the next 6 years at least.
Go on give it a go. The least you are going to get out of it is a slight feeling of empowerment.

[mik]

Originally Posted by Joe5619

Why do people keep going on on on about the cruze being a "slapping them together here' job? Who really cares? Slapping them together here, with 5-10-15-20-25-30-35% (Pick a percentage) of local content is still keeping thousand’s of Australia's employed & is better than just importing them!! If we had an industry that was pumping out far far more units (I'm talking 3-4 times. Ford has the factory to pump out 200,000 cars a year), then part companies might be able to compete better & the local contact of those vehicle could increase with time. Toyota only builds ‘slapping them together here’ jobs, so you’d rather they weren’t here then??

It would be intersting to know what was the local content % on day 1 for Cruze & what is it now!!

obviously it`s good to have any work we can get here, but the more content made here the better, if car x has most of it`s components made in country x with country x steel, with with country x labor and a lot of it is sent here in crates, as opposed to car z actually built here with our steel(would`nt that be nice), using our machinists, our labor to assemble it has to be better .
no doubt they will always have to source some parts over sea`s, but much more value for OZ in a falcon that makes every almost everything here than a car sent here with 80 % parts made elsewhere.

[Joe5619]

Originally Posted by mik

obviously it`s good to have any work we can get here, but the more content made here the better, if car x has most of it`s components made in country x with country x steel, with with country x labor and a lot of it is sent here in crates, as opposed to car z actually built here with our steel(would`nt that be nice), using our machinists, our labor to assemble it has to be better .
no doubt they will always have to source some parts over sea`s, but much more value for OZ in a falcon that makes every almost everything here than a car sent here with 80 % parts made elsewhere.

Here's some food for thought.

Ford currently builds 35,000 cars a year. Lets assume these cars are 100% built here. Which they clearly aren’t but follow me. Now lets say Ford swap that with 200,000 (This was once the factory max out put) with 'slap together here jobs' with only 20% local content. If we times 200,000 x 20% that would equal to 40,000 whole cars built (per say). Compare this with the first sentence & the local parts industry would be out in front of now & Ford itself would be killing it!!

Or even better still, keep the current 35,000 & add 150,000 'slap together here jobs'!! Win for all.

Whilst high units in it self will not guarantee profit as the recent past here & overseas has shown, but if managed properly it would definitely help

[EVLKNEVL]

Originally Posted by Joe5619

Here's some food for thought.

Ford currently builds 35,000 cars a year. Lets assume these cars are 100% built here. Which they clearly aren’t but follow me. Now lets say Ford swap that with 200,000 (This was once the factory max out put) with 'slap together here jobs' with only 20% local content. If we times 200,000 x 20% that would equal to 40,000 whole cars built (per say). Compare this with the first sentence & the local parts industry would be out in front of now & Ford itself would be killing it!!

Or even better still, keep the current 35,000 & add 150,000 'slap together here jobs'!! Win for all.

Whilst high units in it self will not guarantee profit as the recent past here & overseas has shown, but if managed properly it would definitely help

Do you think Ford Australia can sell 200,000 cars a year?

[Joe5619]

Originally Posted by EVLKNEVL

Do you think Ford Australia can sell 200,000 cars a year?

My plan would require exports.. Toyota build around that number, dont they??

[Brazen]

What I would do if I was the Government is stop this stupid "picking winners" crap they do with subsidies.

Instead I would do a flat $1000 rebate given to each manufacturer for every vehicle they produce in the financial year (for both domestic and export). With vehicle profit margins so slim, an extra $1000 per vehicle pure profit straight to the manufacturer makes a massive difference to the bottom line.

This would then mean that the manufacturers would need to build cars the market wants, as the more they sell the more they get from the government. This increase in volume would be a massive positive to the parts and component makers. The volume would also mean that the auto industry begin to develop better economies of scale making vehicle production cheaper. As there would be an emphasis on selling cars, the car makers are forced to ensure the vehicles are competitive and are value for money - which benefits consumers.

Last year Ford got given 100 million for fuel economy improvements to Falcon (a car that only sells 10,000 units a year) weeks later they sacked 440 workers. The current incentives do nothing to increase production all they do is improve the margins which benefit shareholders in the US. Under my scheme Ford could get 100 million each year if they built 100,000 cars a year.

Also the current incentives do not foster sustainability, a change in government could make those 10,000 Falcons very vulnerable. Whereas rebates based on production increases the competitiveness due to economy of scales, encouraging exports and looking for market wants and trends.

The scheme should cost around the same as the current incentives - but with the benefit of a massive production increase which benefits taxpayers, the industry, the consumers and ultimately the car makers. It would also be cheap to administer as there would no longer be all the beaurocracy including lengthy investment proposal and departmental reviews - instead simply open the production books each quarter and get a cheque.

[burnz]

what we need is the local banks to give lower interest rates on local purchases,
keep the regular rate's for imports.
also insurance companies should help as well a falcon would be cheaper than a mondeo to repair.

this gets around tariffs, and promotes buy Australian..

[Road_Warrior]

Originally Posted by Joe5619

Now lets say Ford swap that with 200,000 (This was once the factory max out put)

Are you talking Broadmeadows Assembly or what Ford Australia used to make 30-odd years ago from a collective of plants around the place? The current plant capacity is 120,000 units/pa and even then that is theoretical based on some process and supply bottlenecks.

[Papa Smurf]

Not only does the manufacturer have to step up their game but so do the BUYERS. Choosing to spend their money on a product that provides jobs for Aussies and not just sending 99% of the profits overseas.

[302 XC]

Originally Posted by burnz

what we need is the local banks to give lower interest rates on local purchases,
keep the regular rate's for imports.
also insurance companies should help as well a falcon would be cheaper than a mondeo to repair.

this gets around tariffs, and promotes buy Australian..

Even IF this would work it would take a bit for aussie manufacturers to beat the O/S brands on selling
Toyota is what the biggest selling brand world wide,they sell alot here in aussie land
Nissan topped holden for the biggest seller just recently, then to add insult to injury nissan have just offered a 1 % interest on most in the fleet
Quality for quality, the same for same the 1 % deals will steal sales from others no doubt
Why do the aussie makers wait so long to counter fight these cheap interest deals other O/S brands offer first and have months head start on the aussie brands
Ford were so worried they were nearly the last to offer 2.9 %

[BroadyFord]

The high dollar is the NUMBER ONE misfortune for the car industry (and manufacturing in general). End of story. Something needs to be done about it.

There was an article in today's Herald Sun saying that the dollar is likely to rise to US$1.13 by the end of the year!

At that level, there is no way Ford would even consider keeping manufacturing in Australia (if they haven't decided FoA's fate already) past 2016.

[Bossxr8]

Originally Posted by burnz

what we need is the local banks to give lower interest rates on local purchases,
keep the regular rate's for imports.
also insurance companies should help as well a falcon would be cheaper than a mondeo to repair.

this gets around tariffs, and promotes buy Australian..

Do you seriously think our greedy banks would do that. They won't even follow the reserve banks interest cuts.

[mik]

Originally Posted by BroadyFord

The high dollar is the NUMBER ONE misfortune for the car industry (and manufacturing in general). End of story. Something needs to be done about it.

There was an article in today's Herald Sun saying that the dollar is likely to rise to US$1.13 by the end of the year!

At that level, there is no way Ford would even consider keeping manufacturing in Australia (if they haven't decided FoA's fate already) past 2016.

The funny thing about the high dollar and massive import dumping into Australia is, Govco seem to be as happy as a pig in excrement,
i`m sure they could do something about either one or the other, but they seem content to let manufacturing and industry in Australia go te way of the Dodo.

[BHDOGS]

i hardly think the governments sitting back with glee that the auto industry is going broke and really its there own dam fault for serving us up second rate cars all the time compared to world standards before other people get upset and yes i know its a market specific car but the worlds caught up with Australia now, where no longer the far flung outpost. but i dont wanna see them leave so id happily pay more tax to have them stay.

[M&Ms]

Cue all the journalists and euro / japanese fanboys saying "let the dinosaurs die".

The mentality of the car-buying public in Australia is disgusting (to say the least). There isn't any pride in what Ford / Holden (the locals) can do. I think the FG Falccon is a world class product! Sure, it might have some niggly issues, but nothing catastrophic. Ever driven an Alfa Romeo or BMW? Golf GTi's are shocking car's with all their woes; yet no one bags them out (whole crowd out there that love their Golf's more than their own families ffs!!!).

The Australian Government needs to step in and support the local car industry - it need private AND corporate buyers to buy local products. What can they do? How about removing the LCT on locally produced cars, make purchasing a local car tax deductable (or GST exempt) including all running costs, remove FBT payments on anyone who leases a local car, force governments and government owned companies in all states to buy local, and do something about petrol price gouging! This government needs to really look at where it spends its (or the tax-payers) money (how much are asylum seekers, dole bludger, etc costing this country????) and stop dragging Australia down until we are poorer than Vietnam!

/End Rant

[DanielXR8]

Originally Posted by Brazen

What I would do if I was the Government is stop this stupid "picking winners" crap they do with subsidies.

Instead I would do a flat $1000 rebate given to each manufacturer for every vehicle they produce in the financial year (for both domestic and export). With vehicle profit margins so slim, an extra $1000 per vehicle pure profit straight to the manufacturer makes a massive difference to the bottom line.

I like your idea, but I think the funding for each car should also be factored on results of faults per car and independent inspections of the cars by government funded engineers. Obviously things like styling and how it drives are subjective, so they would not be included.

Where a vehicle has a repeatable fault that is identified by government engineers and not fixed in a timely manner (set to a maximum time regardless of fault), the subsidy would be suspended. For example if Territory was exported and the known fault with rust in the tailgate, from inadequate paint and rust protection was ignored like it was, Ford could expect all subsidies to be halted for that vehicle.

The goal being to encourage quality exports and world class standards for our auto manufacturing sector, that produces cars and components that won't backfire on the industry longer term due to quality issues. In other words start building a reputation as buying Australian made cars and components is a good thing for our export markets.

Vehicles would also have to have a minimum Australian content to be eligible for the subsidy too.