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an ALP ascendency? « Previous | |Next »
June 8, 2008

A central core of the Rudd Government's reforms is to use the $500 million green car initiative to reshape the domestic car industry and make it more economically sustainable and environmentally friendly. I've puzzled about this willingness to prop up the local car industry in a global market.

Carindustry.jpg Spooner, car industry

Why even more subsidies for the car industry given the indifference to solar energy and building up a solar manufacturing base? Why this kind of industry policy when the car industry makes a bad product in a global market place that looks back to the past of cheap petrol and the solar industry is the future form of energy in a world of climate change?

Shaun Carney offers us a political reason in the Sunday Age. He says that the central tension for contemporary Labor is the need to weave together its disparate supporting tribes and Rudd's car plan, which co-opts concern about climate change to underpin the ALP's more traditional working class base, tells us how he wants to do it.

Carney says:

The challenge for a modern Labor administration is clear. Only by establishing a new settlement between the old blue-collar Labor constituency of manufacturing and the new white-collar pro-environment constituency can Rudd hope to govern effectively.

Carney adds that when Labor was last in power, under Paul Keating, it managed to hold on to most of its white-collar support base but lost office when parts of its blue-collar base, pummelled by the effects of economic deregulation, concluded it had lost touch. Since then, the white-collar left has coalesced more solidly around the Greens - an effect that has been turbo-charged by the death of the more moderate Democrats.

| Posted by Gary Sauer-Thompson at 1:24 PM | | Comments (15)


Manufacturing jobs are not good ones anymore and what cannot be outsourced is being automated by the digital revolution.

Manufacturing also becomes smaller and smaller as a sector each year as well. Car manufacturing is largely not sustainable in the Australian market, Mitsubishi has bailed and Ford is asking for handouts. Toyota, Honda, etc make a lot of money just importing cars, Ford should do the same.

A lot of that is just misguided sentimentalism for a mythical past. ie bad public policy.

If that's the political reason it's not a very good one.

Ford have been floundering since they lost the taxi fleets. Even if we did have a green car industry, the Australian version will be more expensive than the imports.

To me, the political angle is 'look at us, we're thinking long term about fuel prices and freeing ourselves up from the opposition's big corporate friends'.

I'm inclined to agree about bad public policy. Ford is not export orientated at all. So how will it survive in the small domestic market with a big car? Why prop them up?

Gary, Holden is surviving through exports and by becoming an engineering company (zeta and maybe alpha). Ford Australia has had the engineering taken away from them for the next RWD platform. That will be done in the US.

They don't have any reason to manufacture locally other than politics. They would probably make more money if they just became an import company anyway.

Holden's decision to shut down its four-cylinder engine plant at Fishermans Bend was announced last week. Spooner seems to think that tariffs will protect the car industry and that free trade (no tariffs) is the problem rather than a failure to invest in good products.

Carney is right about he politics. How does the ALP ensure its ascendency? As he points out the inner city seats in Melbourne and Sydney that were once safe for the ALP are now really Labor marginals, in serious danger of falling to the Greens. Secondly the culture of critique within that broader political left is harsher on Labor than in the past for its failure to deliver on environmental issues.

it is ironic that Rudd is quoting "Ford Australia boss, Bill Osborne, as suggested that Australia is one of only 14 countries worldwide with the know-how to design, engineer and manufacture a car from scratch.
Thus we have the Rudd argument that Australia should be using that know-how to develop new car solutions not just for Australia, but for the world.

Ford is developing new car solutions? They are still building trucks, SUV's and six cylinder cars in the US whilst consumers shift to Honda and Toyota.

There's a lot riding on their carbon pricing scheme. I notice the opposition are also opposing the means test on the solar panel rebate. If we're going to be a country that manufactures things, why not solar panels? Maybe the solar panel shop floor isn't as manly as the car one?

I'm sure masculinity has a lot to do with the blue collar side of things. Solar are girly compared to mining coal; building cars is seen as masculine compared to making pushbikes.

Australia probably makes more money selling education overseas than cars.

Gary, Ford has an interesting mix of products worldwide. For Europe produces some interesting cars and Ford North America meets the US market well, it has only been recently that their trucks have been overtaken by demand for cars.

I think car manufacturing has survived in Australia through a mix of nationalist protectionist politics and national cultural pride. The V8 supercars is very parochial and almost as protected as the industry.

Holden's Commodore is a world class car with high quality engineering and manufacturing which does well around the world so it may survive on that alone. But I would not be surprised if Holden became Chevrolet one day just so they can widen their offerings with niche cars like the Camaro and Corvette.

Auto manufacturing is a pretty marginal area these days with high capital costs, long engineering lead times and difficulty meeting a changing market. Bit of a mugs game.

Politicians should let the market decide this one.

Kevin Rudd has announced that Toyota will produce a hybrid car in Melbourne starting from 2010. A green care is not a green car industry. The latter is what Carr is trying to achieve.

Carr + Rudd want Ford to join Holden and Toyota to export more --particularly in the Asia -Pacific Rim. That would require new investment. So how do they ensure that?

I thought that Ford and General Motors in the US were grappling with the shift to smaller, more fuel efficient, cars led by Toyota.

Rudd + Carr may want increased investment from Ford Australia to export their more fuel effiicent cars but the decision to do this is made in the US. So far the green light has not been given.Carr is going to the US to make the case for more investment and exports from Ford and General Motors.

Peter, It has only been recently that the Camry sold more than the Ford F150. They have been pretty accurate in their assessment of what the US market wants. It is really only recently with US inflation that trucks have become prohibitive to run. And by recently I mean the last two months.

Toyota in the US makes large trucks too. As does Nissan and all the other up-market brands they sell. It is what the US market buys.

there are some small electric cars running around Adelaide. I understand that at least one small enterprise in central Victoria is already producing electric vehicles and making them available to local council fleets.

How come the state government is not helping this infant industry?

this Tesla Roadster electric car may interest you. And this.