Wednesday, 24 April 2013

Aussie car manufacturers: an endangered species?

The chiefs of Australia's big three car manufacturers are warning that around 50,000 jobs will be lost if the government withdraws its assistance to the industry.

That assistance is expected to be a major federal election issue this year, with Tony Abbott promising to strip $500 million out of a green-car fund if the Coalition is elected.

Ford chief Bob Graziano, Holden chief Mike Devereux and Toyota chief David Buttner have all indicated that the sector will not survive if government support is abolished.

Bailouts have been controversial in recent years, with the three companies shedding 1350 jobs between them despite receiving billions in handouts.

Holden has received $2.2 billion in government subsidies in the past 12 years, while Ford has picked up about $1.1 billion - but neither can guarantee local production beyond 2016.

According to industry estimates, the three companies employ 17,000 people directly, while the industry (including suppliers) employs 55,000 and supports 200,000 jobs indirectly.

And if one of the manufacturers left Australia, the whole industry could collapse because the supplier network would not have enough volume to be profitable.

Toyota is the only Aussie car manufacturer with a significant export program. Its CEO David Buttner said government policy needed to continue supporting the car industry or Toyota would look at spending its money elsewhere.

"There's a whole host of countries around the world vying for Toyota's investment," he said.

Holden's Mike Devereux responded to critics of the Australian car industry, saying that assistance to the manufacturing was worth every cent. Ford Australia's Mr Graziano agrees, noting said that Australians spent less on car industry assistance than other countries.

"If you look at Australia the support here is a little bit less than $18 per person compared to significantly higher amounts in other countries around the world, but without that assistance, it would be difficult to see the industry surviving."

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