Gary, it's not just the Australian car industry that is contracting. So is the US one.

Gary,
The car manufacturers have been extorting money out of all governments for years. When they close plants down it really drags other local companies down too that supply various parts. They use the threat of this to get what they want. Perhaps the ACCC needs to investigate this aspect because many believe that the various makers collude.

As Les more or less says, the manufacturers have had some time to come up with automobiles more attuned to reality rather than advertising-manufactured needs, with the fall back to the threat to leave with serious unemployment costs for the host community if assistance isn't forthcoming.
If the gas guzzlers succeed, they're fine, if not, they are bailed out.
Nonetheless, the suddenness of the oil shock induced by Bush's idiocies is strictly neither the fault of manufacturers or the workers.
The government 'ump', under the circumstances which include the likelihood of a recession induced by the idiot Bush regime;let alone local damage, could consider postponing a round of further tariff cuts in return from a belated assurance from and written plan by, the industry to produce more realistic cars for the times.
Time for a few federal ministers to start "leaning" on these lazy corporate bastards.

The problem is the length and cost of the design cycle, coupled with plants that have been designed to handle larger wheelbase vehicles.

To make smaller vehicles would require total retooling - and that is very unlikely to occur.

Flex fuel is relatively easy - and in my opinion, should be mandatory. Short run cost per vehicle is $1k or so, but if it was amortised over the total production run would drop to a few hundred dollars per vehicle fairly quickly.

The programmed obsolescence in the car industry is getting to a stage where it needs to be addressed too. I am totally convinced that the same sort of agenda will transfer to the clean cars.
So if everything needs to be replaced sooner and sooner is it really as big a step forward as we think?

Quite frankly I have seen enough of multi nationals wanting assistance from government.They receive cheap power,water,gas & land in our state.Do they repay any subsidies from their profits,so to keep our cost down,not a hope?Why do they have priority over communities through out the state,yes they supply jobs but we put in the hours so companies can make huge profits. Which most goes off shore,there are many people battling to pay for survival & definately not because of living beyond their means.Our state is low on water because of the drought,so why give expanding multi nations first dibs on our precious commodity?

I think Anne's post sums it up for a lot of people- the only cavil I'd have is if the "treatment" kills the auto industry "patient", skills bases are lost and taxes and welfare bills increased to pay for large numbers of people out work. Too much "reform" at once exponentially increases costs for our society. The auto industry knows that the country doesn't want to lose the skills and suffer the dole/retraining consequences for a massive one-hit blow, and is a old hand at playing lame duck.
As Big Bob says, the retooling, redesigning and innovation has been postponed for a long time now and these things are out of the hands of the local branch offices of the global operations.
I'd hate to see a repeat of the vicious unemployment of the 'seventies caused by US wars and incompetence, oil hikes and too severe tarriff cuts.

Paul,
As you know big business goes on and on about a trade/industry policy needing to ensure international competitiveness, innovation and increased exports etc etc and that it is the government who holds things back. Its the standard neo-liberal line.

As Gary pointed out the key for the car industry is increased exports, and that can only come from having a culture of innovation and productivity.

The barriers to increased trade are not just about knocking down barriers to trade (as in agricultural products); they are also internal, that is not less business regulation or business taxes as it is about bad product being produced by the car industry. How can you build an improved export performance with a bad product?

The business case for reform should be thrown back at the car industry. The cars ought to exported so they can be easily converted to run on biofuels. If the Brazilians do it with the Holdens, so can the Australians. Isn't it about time they spent some money on a Centre of Innovation and Excellence and did some R&D to overcome being a branch office of a transnational firm.

BigBob,
the car industry needs to do something to lift its game. Although more cars than ever were sold in Australia last year (a million new ones) the percentage of locally produced cars continues to fall. It was 31% in 2000 and it is now around 19%. Sure imported cars have got cheaper during that period, but what is being produced by the local manufacturers does not appeal to consumers.

The writing is on the wall. They have to export most of what they produce to stay in business. Unfortunately, they can only do this export stuff with government subsidies. When are the local manufacturers going to be able to export good, fuel efficient cars without requiring a government subsidy?

Isn't the whole trouble, that the local operations are networked into the world car concept and now run from without?
In the old days, GMH and the rest did their own local brain work, building cars from their own designs. Nowadays, they get given something from offshore, eg, Opel and assemble cars that are foreign designed,whilst limited themselves increasingly to merely producing specific components to be incorporated in manufacture or assembly elsewhere.
However, the writer still says that it is legitimate to employ tarriff cuts etc, selectively when consequences from the alternatives are too extreme for a locale.
For God's sake, I for one couldn't begrudge a few bob extra in tax- in the short term, any way- if I knew it would prevent thousands of families robbed of a livelihood in a time when recession is threatening.
This whingeing about tax because "someone else might get to use a bit of it ( on necessities ) before I do ( on a conspicuous four wheel drive? )" is just American thinking, antithetical to the old Aussie concept of community and the "fair go" and is at the root of that selfishness- based stench of an ideology; neoliberalism.
"Live and Let Live, this writer reckons, not "Bugger You Jack"!

We have individuals and orgs. building and racing cars, though experimental, meet standards required by our fear of GHG. Any assistance to car companies must be directed at sustainability to be justified.
That or we could be importing from India their new Tata.
Reading of cars being made in Aussie at present that are ignoring the requirement of little air pollution is disappointing to say the least. No car leaving a plant that at least does not run on gas is disgusting.
fluff4