Holden Quits On Australia

Hits To The Id

I don't know how the average Aussie rev head deals with this. Not only has Ford pulled up stumps on manufacturing in Australia, but today we find that General Motors is going to stop manufacturing automobiles in Australia. The first thing that popped into my mind was how will the standard white Aussie bloke deal with this blow to his masculinity? Personally, I don't really care if cars are made here or not. If not, then there's a personal argument in favour of cutting all the damn tariffs and having cheaper cars in Australia - much as they do in New Zealand. Yet, I think o all that testosterone and petrol-fumed love of things like V8 Supercar and utes and Mount Panorama and Peter Brock and Dick Johnson and Mark Skaife and Craig Lowndes and all that macho posturing, and all of that stuff (frankly, stuff that I find a bit parochial and tinged with Xenophobia) and how the Aussie male self-image is going to handle Holden and Ford selling what are essentially 'Yank Tanks".

Jut how will they cope? For once I feel sorry for them. This can't be fun. It's a betrayal of the cultural psyche. I'm sort of interested in where they will turn to bolster their cultural faith. Or will they continue to cheer the badges? How will this affect the self-image of the standard rev head? Of course this is all minor in comparison to what it means to the economy.

Scanning the headlines, Peter Hartcher as usual has some sanguine truth up and running.

One of the few things that Julia Gillard and Tony Abbott used to agree on was that, if you wanted a prosperous modern economy, you had to have a car industry.

This was news to Switzerland. And Singapore. And Norway. And Denmark. None of these has any car manufacturing, yet all are among the top 10 richest countries in income per person.

Today, the political parties are consumed by furious recriminations over who killed Holden. This is entertaining but irrelevant.

A car industry is neither necessary nor sufficient for national prosperity. So what is necessary? The task of leading debate and setting policy falls to the treasurer and the prime minister.

Rather than relying on Holden, Australia's economic future depends on Hockey. Is he up to it? We are about to find out.

If you thought that was brutal, try this one from Elizabeth Knight:

GM is teaching Australia a very clear lesson: they are closing up shop because it is in their commercial interests. Our future lies in innovation – not propping up an industry that serves no purpose other than an antiquated sovereign status symbol.

The future of Australian manufacturing has been written off too quickly. Productivity in many areas has been progressing at an improving clip. And while recent studies from the Grattan Institute show that manufacturing’s share of the economy has been shrinking it has also been moving up the technology scale.

But more importantly, if the tax and regulatory frameworks that foster innovation were developed, the natural commercial advantages that we possess as a highly educated society could be capitalised.

Maybe if the focus was shifted to the opportunities squandered by ignoring innovation, rather than the sometimes dubious calculations of the multiplier effect on the economy of building assembly line cars, Australia could get an edge on all those other OECD countries that also prop up ailing car manufacturers.

It wont be popular, but it hits the nail on the head. The future form of the NBN is a much bigger issue than whether we keep this dinosaur industry which isn't even selling to Australians. Need we say more?

Car Bail-out Collapses

Rigor Mortis Sets In

The US car manfacturers hit a hurdle in their bid to get bailed out.

A $US14 billion ($20.8 billion) emergency bail-out for US car makers collapsed in the Senate Thursday night after the United Auto Workers refused to accede to Republican demands for swift wage cuts.

Senate Majority Leader Harry Reid said he was "terribly disappointed'' about the demise of an emerging bipartisan deal to rescue Detroit's Big Three automakers.

He spoke shortly after Republicans left a closed-door meeting where they balked at giving the automakers federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George Voinovich of Ohio, a strong bail-out supporter, said the union was willing to make the cuts - but not until 2011.

Reid was working to set a swift test vote on the measure Thursday night, but it was just a formality.

The bill was virtually certain to fail to reach the 60-vote threshold it would need to clear to advance.

Reid called the bill's collapse "a loss for the country,'' adding "I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight.''

The implosion followed an unprecedented marathon set of talks in Washington among labor, the auto industry and lawmakers who bargained into the night in efforts to salvage the auto bailout at a time of soaring job losses and widespread economic turmoil.

"In the midst of already deep and troubling economic times, we are about to add to that by walking away,'' said Democratic Sen. Chris Dodd, the Banking Committee chairman who led negotiations on the package.

Sen. Bob Corker of Tennessee, the Republican point man in the talks, said the two sides had been tantalisingly close to a deal, but the union's refusal to agree wage concessions by a specific date in 2009 kept them apart.

The autoworkers' contract doesn't expire until 2011.

"We were about three words away from a deal,'' said Corker. "We solved everything substantively and about three words keep us from reaching a conclusion.''

There you go. It doesn't seem right any which way does it?

It's one thing to be bailing out banks in order to shore up the financial sector; it's another thing entirely to be spending public money on bailing out large, failed corporations.

Then, there's the issue of the sort of corporations that are getting bailed out: These are manufacturers of cars that mostly did not heed the signs that petroleum prices might go up; they're also the corporations that obstinately refused to countenance Global Warming and Climate Change in the face of mounting evidence. Instead, they ideologically produced a certain kind of large, gas-guzzling car that flew in the face of such concerns.

Naturally the market turned its back - much like how the Australian market has turned its back on Australia films, I might add - and now they've hit a rough patch and so they want government money to help them along.

These corporations also have a layered management system, with an astounding number of executives and managers and whatnot pulling down enormous salaries. In a time when companies have been getting leaner, these top execs for these companies have been pulling down huge salaries that are disproportionate to their own productivity.

And now, these companies want the Unions to give up the agreement they made that covers them until 2011, just so that the House Republicans can feel good about themselves. It's a right schmozzle.

Then, the Union won't negotiate; they'd rather see the company go down. There's something incredibly bloody-minded about that too.

Add onto the list the Republicans who are insisting on the Unions taking a pay cut, or else they'll just let the suckers all go down. I know that the Big 3 US Car  manufacturers are asking for an obscene bail out, but it's sure as hell not the fault of the unions they are where they are.

Colour me unimpressed with all of it.