Ford plant announcement won’t save local industry

Ford’s announcement that it will keep its Victorian engine plant open until 2010 will do little to save the Australian car assembly industry, says a leading car industry expert.

Clive Matthew-Wilson, editor of the car buyers’ Dog & Lemon Guide, says the fate of the Australian assembly industry rests with US president Barack Obama, not Ford Australia.

“Ford & General Motors are essentially bankrupt. The U.S. government will eventually rescue them because it has no choice.”

“However, Obama gets no votes for rescuing Australian car workers. He gets votes for rescuing American car workers. There’s no way that a bailout by the American government is going to include Australia’s unprofitable car assembly industry. Ford & GM’s Australian assembly operations will simply be phased out or closed down entirely.”

“The Australian government can throw $6 billion or $600 billion at these car plants, but they still won’t be economically feasible. The sad fact is, Australia’s car manufacturing plants are losing money faster than a drunk at a casino and there’s no feasible way of turning this around. The Australian car industry can re-focus on small cars, green cars, blue cars or red cars. None of this will make the slightest difference in the longer term.”

“Australia makes a few hundred thousand cars a year, and loses money on virtually every one, due to high costs and low volumes. By comparison, China is on track to sell 10 million vehicles this year, and pays its workers something like $1 per hour.”

“There’s simply no way Australia’s car plants can survive against this sort of competition. Australia’s car assembly industry is doomed to go the way of Australia’s television assembly industry.”

A closure by Ford and Holden would see Toyota as the sole volume manufacturer in Australia.

However, Matthew-Wilson added:

“Recent events have seen Toyota’s profits slashed. Toyota’s accountants will be looking hard to save money on unprofitable ventures. If Toyota can save money by assembling cars in Thailand or China instead of Australia, then that’s what they’ll do. Toyota’s only loyalty is to its profits.”

Matthew-Wilson added:

“Please don’t shoot the messenger. I’m well aware of how many Australians rely on the car assembly industry for their jobs and I would love to be wrong, but I don’t think I am.”

“If the Australian government simply shared its recently announced $6billion car industry bailout among the affected car workers, these workers could pay off their mortgages or perhaps start small businesses. At least that way the money wouldn’t be wasted. As things stand, the government’s $6billion is simply paying the bills for a few multinational corporations, while doing nothing to solve the underlying problems.”