It’s not a hand out, Julia Gillard said today about her, well, handout — and those of the Baillieu and Weatherill governments — to US multinational General Motors to keep making cars here until 2022.
“A strategic investment” was the Prime Minister’s phrase for the $215 million package to support 55,500 jobs in the car industry and “around 200,000 additional jobs nationally” (those magic employment multipliers again).
Among those jobs will be several new ones. There’ll be an “Automotive Envoy” “to strengthen links with the global automotive market”. Let’s call him or her the ambassador for Detroit. There’ll also be an “Automotive Supplier Advocate to help identify new products and customers in automotive and non-automotive industries.” GM will also be establishing a “Suppliers’ Working Group to connect Australian suppliers to GM’s world-wide supply chains.” The golden opportunity to appoint a US-style “car Tsar” has, sadly, been missed.
There’s only so much terms like “co-investment” and “developing new business opportunities” can hide before it becomes apparent that this is merely a $200 million plus bid by Australia in the international market established by multinational automotive manufacturers to determine where they can get the most handouts for establishing car plants.
There are few other industries like it, with the capacity to hypnotise politicians the world over, making them suspend their scepticism and start writing out cheques. The closest comparison is “major events”, in which sordid institutions like the IOC, FIFA and Formula 1 demand, and get, massive subsidies and legal protection from governments for the right to stage ludicrously costly events.
Although, seen from that point of view, the deal isn’t too bad: remember we blew $46 million just trying to bid for the soccer World Cup, and compare the $50m Victoria wastes every year on that noted supporter of gross human rights violators, Formula 1, for some momentary coverage and a minimal boost to tourism. The $200 million that might — time will tell — keep perhaps ten thousand workers in jobs for another decade suddenly doesn’t look so bad.
The only smart aspect of the package was a further $16m for training and support services for workers leaving the automotive industry. Its one flaw is that is should have been ten times that, to help exit a substantial chunk of the workforce.
That Gillard proudly stood next to the same vehicle as Ben Chifley did in 1948 speaks volumes: our industry policy hasn’t moved on in more than 60 years. At the ceremony not long before the “Holden 1” rolled off the production line, Chifley spoke about of exporting vehicles “beyond our borders to other people in the Pacific and South East Asia” and lauding it as an example of the Australian-American relationship.
Today there was no pro-American rhetoric, but the Prime Minister was still talking about accessing Asian markets.
Detroit would be only too happy to be here in 2076 with another PM talking of co-investments to enable Australian manufacturing to enjoy the benefits of “the Asian century”. And if they’re not, they’ll be in some other country lucky enough to have “won” the global auction that is car manufacturing.
Strategic it may be, but for whom and why is clear… *sigh*
Of course it’s strategic to invest $200,000,000 to cement our status on the world markets as ‘also rans’ and save jobs of card carrying members while quite happily letting other jobs go down the drain. Oops.
Especially since there are no alternative industries that we could strategically invest $200M in – areas in which we have the natural resources and competence to be amongst the world leaders.
Alas, that would require our card carrying members to do as the majority of us do – adapt and learn.
*sigh*
We are long over due to have our own fair dinkum Australian motor vehicle manufacturing industry. We have the resources and the skills. Why are we beholden to Germany Europe and USA. Platform cars have been around for decades! We are being taken for mugs and our elected reps are part of the on going problem! We are spending millions of dollars paying our politicians to act in our best interest and yet we are going broke. While inviting imports of stuff which will damage our own natural resources. Edward James
If it costs $20 mil per year to make cars in Australia – so what? It may be a rort but what’s the alternative? What will we ever be able to manufacture in this country if the market has its way without intervention? We’re already consumers of almost everything that uses fuel and lifts or carries any item. I think we need to be able to do more than service cars or fix them after prangs.
So, I assume you can write the story to go under the headline for the alternative outcome:
GILLARD GOVERNMENT REFUSES TO SUPPORT AUSSIE MOTOR INDUSTRY.
Yeah, right.
@ Damien, It seems we have been led into believing we need to import everything on offer from the rest of the world. Well no we dont Damien! We once had two east coast steel mills Wollongong and Newcastle where we made world class steel. Australia has resourses inn raw materials and energy, more than enough to serve us as a nation independantly of the rest of the world. We also have natural produce growing all over the place, most of which is not yet contaminated with oversears blights and desiese. All we need to do is learn how to defend ourselves! Our dead wood elected reps are not going to help us do that! Dont you know! Edward James