by Alan Thornhill
Major public works may be advanced to help offset job losses arising from Holden’s decision to cease manufacturing in Australia from 2017.
This was discussed at a meeting between the Prime Minister, Tony Abbott, and State Premiers in Canberra today.
The discussions were not finalised.
However Mr Abbott expects to have more to say on this subject next week.
“… we will make an announcement early next week that, I think, will help to restore confidence in the areas most impacted by the impending departure of Ford and Holden,” the Prime Minister told reporters after the meeting.
“………I don’t believe for a second, that these are areas without fundamental economic strengths and I don’t believe that the staff at Ford and Holden are in any way incapable of being redeployed to really sustainable, satisfying employment in the future.
“Our objective is to transition people from one good job to another good job, not simply to help them out of a job and into retirement; that’s not our objective,” Mr Abbott said.
The South Australian Premier, Jay Weatherill, said structural adjustment measures, to help displaced auto workers, had also been discussed.
“ …..at a broader level we have joined with Victoria in the series of propositions we put to the Commonwealth about what that structural adjustment package should look like.”
Mr Weatherill said there had also been “a broader conversation about what sort of country we want to be.
“Do we want to be a country that manufactures things, and what our industry base should look like?
“So, there’s a lot of work to be done,” the South Australian Premier said.
“ We don’t have a minute to lose.”
by Alan Thornhill
The Reserve Bank Governor, Glenn Stevens, has told the Financial Review that he believes there is a future for manufacturing in Australia.
He said Australian workers are already making high tech aircraft parts for Boeing.
However Mr Stevens also said he wants to see the $A closer to 85US cents.
Holden chief, Mike Devereux, cited the high $A as one of several factors that forced his company to announce that it would cease production in 2017, throwing thousands of car workers into unemployment.
The Prime Minister, Tony Abbott, is discussing the future of manufacturing in Australia, in view of Holden’s decision, when he meets State and Federal leaders in Canberra today.
He urged them to take a co-operative approach at the meeting.
“I think pragmatic federalism is what we need in modern Australia and that is what we will do our best to implement in the hours ahead today,” M Abbott said as he opened the meeting.
Mr Stevens has been “jawboning” the $A for some time.
It is now at a four month low, having dropped below 90 US cents overnight.
In his interview with the Fin Review, Mr Stevens also said that a lower $A would probably be “preferable” to another interest rate cut.
by Alan Thornhill
Business expectations for the coming six months have strengthened.
However a new survey, which confirmed this, also showed that the uplift is now slower than it was.
The ACCI-Westpac Survey puts general business expectations, for this period, at its strongest point in almost three years.
However the chamber’s Chief Executive, Peter Anderson, said: “. Profit margins are still being squeezed with input costs continuing to increase, while manufacturers’ ability to pass on rising costs through price rises remains very constrained.”
by Alan Thornhill
Australians now have the “highest median wealth” in the world, according to the former Prime Minister, Paul Keating.
He said that figure, for mid level wealth, in Australia is $US400,000 ($A442,000).
The comparable figure for Americans is $US67,000 ($A74,000), he added.
Mr Keating made these remarks, while addressing the Labor Caucus in Canberra, on the 30th Anniversary of Australia’s decision to float the $A.
Mr Keating, himself, was the prime mover behind that decision.
He said the income growth in Australia, that followed had “turned out to be unprecedented.”
Mr Keating also said the float of the $A had also been followed by low inflation, and a long period of unemployment under 6 per cent.
He said these developments would not have been possible without the dismantling of Australia’s “old protectionist” model.
“And, of course, it was done by the Labor party,” Mr Keating said.
“This is the point.
“The Liberals always say they believe in business.
“But they don’t believe in markets,” Mr Keating said.
“And there is a lot of difference between markets and business.”
Mr Keating said the Liberals don’t believe competitive markets are the things governments should provide.
“Governments should be steering the boat.
“But not rowing the boat,” Mr Keating said.
by Alan Thornhill
The Prime Minister, Tony Abbott, says he has talked to Toyota, in the wake of Holden’s decision to quit manufacturing in Australia by 2017.
Mr Abbott says Toyota’s position is different from Holden’s, because more of its production in Australia is exported.
by Alan Thornhill
More than 90,000 jobs could, ultimately, be affected as a result of Holden’s decision to cease manufacturing in Australia within three years.
Perhaps, the most passionate response to the decision, which the iconic car maker announced today, came from the South Australian Labor Premier, Jay Weatherill.
He said: “Holden’s decision to close its Elizabeth plant is devastating news for the workers and families who rely on the automotive industry.”
Mr Weatherill left no room for doubt about who he blames.
“Tony Abbott and his Coalition Government have turned their backs on this industry and the people in it,” he said.
“Holden had made it abundantly clear that if the support committed by the previous federal Labor Government remained on the table it would stay in Australia.
“By cutting funding and, in the past week, by attacking Holden, Tony Abbott and the Coalition have forced Holden out of Australia,” the South Australian Premier added.
The Federal Industry Minister, Ian Macfarlane, said he is “deeply disappointed “ by Holden’s decision.
He said the government had been following “a clear and methodical process” involving the Productivity Commission, to assess what support the car industry needed.
“I am disappointed that Holden hasn’t given the Australian Government the time to complete that process,” Mr Macfarlane added.
Insiders are not blaming him for what happened.
Mr Macfarlane has been a conspicuous supporter of the industry.
However, the Prime Minister, Tony Abbott and his Treasurer, Joe Hockey are being blamed.
The Acting Opposition Leader, Tanya Plibersek, is adamant about that.
“…yesterday, the Treasurer dared Holden to leave Australia,” she said.
“He got his way.
This devastating news was preventable.
“Under Labor this would not have happened.
“Having succeeded in forcing GM Holden out of Australia, the Abbott Government must now deal with the consequences of its reckless policies,” Ms Plibersek said.
Industry associations were also disappointed.
The Australian Industry Group described Holden’s decision as “a severe setback for Australian manufacturing.”
It said up to 95,000 jobs would be affected, directly and indirectly.
Factories making car parts will be hit very hard.
And Australia’s only other car maker, has admitted that it, too, will now find it difficult to continue manufacturing in this country.
The Australian Industry Group said the auto industry had “long played a pivotal role” in the development of Australia’s manufacturing capabilities.”
“Given the importance of this industry, it is vital that the Government now acts decisively to ensure a strong and dynamic industrial sector in Australia,” the group’s Chief Executive, Innes Willox said.
Unions were “devastated” by the decision.
The National Secretary of the Australian Metal Workers Union, Paul Bastian, said: “This is a black day for manufacturing in Australia.
“We are absolutely devastated by the announcement today – this is a catastrophe for tens of thousands of families,” Mr Bastian said.
by Alan Thornhill
It’s not Friday the 13th yet, but Tony Abbott’s political luck is definitely out.
On the day Holden confirmed that it will cease manufacturing in Australia, just three years from now, a Murdoch newspaper, the Sydney Daily Telegraph, carried an ominous headline.
That was “PM’s panzer division.”
It told of a big Australian government contract that the German car maker, BMW, is expected to win, to replace ageing armour plated Holden Caprices, in the Commonwealth’s VIP car fleet.
A government spokesman explained that Holden had not even made a bid for the contract.
Politically, though, this is not a good look for an Australian Prime Minister, of any political stripe, at this sensitive time.
Especially as Holden’s exit will, almost certainly, force component makers and, eventually,Australia’s only other volume car maker, Toyota, to cease local operations, also.
The job losses will be counted in tens of thousands.
And Mr Abbott’s political rivals will, very generously, attribute much of the blame to him.
They will point out, repeatedly, that this all started with the Prime Minister’s declaration, that there would be no extra money for the, already heavily subsidised, car industry.
The Prime Ministerial limo, C1, will be part of that “panzer division.”
As will other armoured cars in the VIP fleet.
So Mr Abbott will be wearing that look, for years yet.
by Alan Thornhill
Holden has announced that it will cease production by the end of 2017 and Australia’s only other volume car maker, Toyota, is likely to follow suit.
Holden’s chief, Mike Devereux, made the announcement in a statement he issued, just before he spoke to Holden workers, at the company’s factory at Elizabeth in South Australia.
The decision means that 3,500 of the company’s employees in South Australia and Victoria will lose their jobs.
Thousands more, employed by companies making components, will also be thrown out of work.
It is an open secret in the industry that Toyota is unlikely to survive in this country, if those component makers collapse.
So it, too, is likely to be forced to close.
Mr Devereux said:-
• Holden would end its manufacturing in Australia by end of 2017.
• 2,900 jobs would be lost over the next four years.
• The high Australian dollar, high cost of production, and small fragmented market, had all contributed to the decision.
• But Holden would retain a sales division, parts distribution, and a global design studio.
• 33,000 people employed in the automotive components sector are likely to also be affected.
“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” Mr Devereux.
“We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people,” he added.
Politically, the Prime Minister, Tony Abbott, is likely to carry much of the blame.
He had declared that his government would not increase the amount of money it contributes to the motor industry, beyond what is already available.
Labor is already attempting to lay the blame at Mr Abbott’s feet.
At question time in Federal parliament, Labor MP, Nick Champion, whose electorate contains the Elizabeth plant, accused the Government of being “complacent about Australian jobs”.
The jibe prompted an angry response from Industry Minister Ian Macfarlane.
“How quickly do they degenerate to raw politics,” he said.
“They are hypocrites – they did nothing for six years and they now want to politicise the pain of the workers who are suffering today.”
In the Senate, former Industry Minister Kim Carr attacked the Government for its handling of the issue.
“Minister, are you aware that the decision was made yesterday afternoon after the Acting Prime Minister’s letter and after seven days of senior ministers abusing General Motors in the background briefings?” he asked Employment Minister Eric Abetz.
“Can’t you now confirm that this Government’s reckless behaviour demonstrates that the Prime Minister’s commitment to Australian jobs is an empty promise?”
Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.
Saturday December 14
An announcement on relief measures for car industry workers expected next week
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|Qbe Insur. Fpo||10.600||+0.200||+1.92%|
|Origin Ene Fpo||13.130||+0.140||+1.08%|
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