I used to work at Toyota in Australia, which also shut down recently. A lot of people here are saying this is about quality, but it's really about profitability.<p>Australia's economy is heavily dependent on mining, and China's economic growth created a local mining boom. This resulted in heavy demand for Australian dollars, and at its peak in 2013 1 AUD was worth about 1.05 USD.<p>It was at this time that Ford (the weakest of the three Australian manufacturers) made the decision to close its Australian manufacturing operations. The high value of the local currency meant the factory was unprofitable and uncompetitive with other factories around the world.<p>The conservative government at the time, led by Tony Abbott, refused to provide subsidies to help close the gap (even temporarily).<p>Toyota and GM Holden had similar problems, and all knew that the local automotive parts suppliers needed at least three companies to sell to. So once Ford was out, the supply chain for parts became unsustainable, and the others quickly announced that they would pull out too. It takes time to close an entire industry, which is why all three companies closed their factories in 2017.<p>Around 2015 the slowdown in China's growth led to a slowdown in Australia's mining industry, and a drop in the AUD. It dropped to around 0.80 USD, and interestingly, Australia's car manufacturers became quite profitable again. But the wheels were already in motion and the decisions couldn't be reversed.<p>Australia's mining industry has bought in a lot of money, but its impact on the dollar has done a lot of damage to the country's export economy. There's a term that economists use to describe this: Dutch disease. Australia has a bad case of it.<p>Edit: s/80 USD/0.80 USD/
This is hardly surprising when you know a little local history.<p>For reference: I grew up in Adelaide, about 15-20 minutes drive (15 km.. erm 9.3 miles for <i>you lot</i>) from the suburb where the Holden factory is located.<p>I remember as a student/early graduate (so, 2000 - 2003ish) having.. acquaintances who were in their early 20's, bringing home close to $AUD100K/year, for assembling commodores. People who would laugh about how funny it is to let a car leave the production line, with the wrong colour door handle fitted.<p>Another "acquaintance" took forever to get a resolution because his 2-door ute was delivered to him with a 20cm gap in the carpet on the passenger side. It went through the factory, through QA, through a DEALER and nobody fucking noticed a 20cm gap on the passenger side of the floor.<p>These were not high quality cars being built by well trained craftsmen. They weren't even average quality cars built by moderately trained craftsmen. They were pieces of shit slapped together by over paid idiots.
I studied abroad in Melbourne in 2008 and it's crazy to see this happen. I guess I left a few months before the GM bailouts got started in the United States and the whole recession kicked off after that.<p>It was really neat to see a uniquely Aussie car culture that felt really vibrant. I loved that El Caminos and Rancheros, long gone in the US, were alive and well as Holden and Ford Falcon Utes. It was neat that Toyota had its own Camry-ish car, called the Aurion, made in Australia. It was neat that Pontiac in the US was getting the Commodore, which was a great-looking car. Even though it was still Ford, GM, and Toyota on some corporate level, they had their own unique thing that I was able to discover while I was there.
Aussie here: Good riddance. This country is at the end of Earth in terms of supply chains and export markets, has a small local market and has extremely high labor costs -- all in all, a terrible place to build the kind of megafactory you need to stay competitive these days. The only reason they managed to survive even this long is massive government subsidies, and I applaud the fact that the government had the guts to finally pull the plug.<p>All that said, the transition away is going to have a high human cost, particularly in Adelaide which just doesn't have a whole lot else going economically. But my wife used to work for a Ford supplier in Melbourne, and that city has managed to absorb Ford's shutdown a few years ago without too much pain. (Nearby Geelong, though, had both the main factory and a steel mill, and is having a harder time.)
Interesting detail is that the, for American market created, Chevrolet SS was basically a rebadged Holden Commodore built in Australia. Together with the Dodge Charger, it was the "cheapest bang per buck" performance sedan with a V8. Although the Charger still for sale, the Chevy SS died with the closure of that plant making the 17' model year it's last.
The Aussie economic model - export bulk raw materials to China, buy manufactured products back - is a curious inversion of the old British Empire economy. And it's one that is not even remotely viable over the long term. Countries whose only source of wealth is raw materials get eaten alive by manufacturing economies, then left to rot when the mines are exhausted. There is a ton of historical precedent.
Holden - better known as GMH or GM Holden - where the GM stands for General Motors, a famous US-based company that bought Holden in the 1930's.<p>The other 'famously Australian' car manufacturer is Ford. Indeed.<p>The kinds of (Australian) people that find cars interesting tend to polarise between these two manufacturers, adopting the beliefs that it's patriotic, and that it can be economic to produce (in most cases components were <i>built</i> overseas but <i>assembled</i> within AU) cars in Australia. A country with breathtakingly high labour costs, small population, and low population density. Specifically a relatively small market, container shipping costs flatten out across the country.<p>That the designs of allegedly Australian cars, even recently, have focused on ICE sedans hasn't helped, though that presumably ties in with the nostalgia aspect for potential consumers of those types of vehicles.<p>The Monthly published[1] an exquisitely written article middle of last year, describing the history of the Australian car industry, and the self-sabotage exhibited. It's a depressingly sober read.<p>[1] <a href="https://www.themonthly.com.au/issue/2016/may/1462024800/richard-denniss/crunch-time" rel="nofollow">https://www.themonthly.com.au/issue/2016/may/1462024800/rich...</a>
I was reading a piece lamenting that Australia was leaving a club of only "8 other nations" where a car could go all the way from conception to mass manufacture. I will track the source down precisely if anyone expresses interest. So I started mentally listing the 8 countries: US, Japan, Germany, South Korea, China, UK, France, Italy. But surely also Sweden? India? Brazil? Spain? Eight seems low to me.
We asssule that protectionism is bad because the consumer has to pay a higher price when those goods are not optimally produced. The irony is that less local consumption = less local labor, reducing competition for labor and pushing down pricing power. But the second aspect of this that doesn’t often get talked about is quality. If making a 65” TV in the US is going to cost twice as much as when it’s made in China then I as the consumer will just by a cheaper TV — probably spending the same amount of money I would have. We can often buy cheaper substitutes with the same functional properties.
Another great story from NYT in a similar vein that does a great job (I think) of humanizing all of the people involved: <a href="https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexnord.html" rel="nofollow">https://www.nytimes.com/2017/10/14/us/union-jobs-mexico-rexn...</a><p>This is a tough issue for me because I consider myself a liberal, and in <i>theory</i> I am OK with globalization but it obviously has negatively impacted many economies in similar ways.<p>I want to be pro-globalization but to me you really only have two (vastly simplified) options:<p>1. Be more isolationist or micromanage global trade to maintain your own industries even though they can't compete globally.
2. Find a way to make globalization benefit everyone, not just the owners of companies who can cut costs and increase profits. This most likely means some kind of universal income and large education investment and vocational training built on top of the profits of globalization.<p>We appear to be moving towards #1 and I'm afraid we'll all suffer as a result.<p>My biggest issue with globalization is that, while it makes sense in theory, in practice most of the "efficiencies" come from dirt cheap labor due to exchange rates, poor workers rights and working conditions, and lack of environmental regulations (among others). Not because other countries have developed <i>better</i> ways to make things better or faster, they can just abuse their workers in a way they can't here. You would think we would all benefit in some ways even if we're just consumers by cheaper goods, but are they really cheaper or cheap enough to offset the reduction in good jobs? Does anyone know of some good data-sources for the prices of consumer goods vs household income over time? My guess is our purchasing power has gone down in general for the middle-class.<p>I can see honestly how this issue has given rise to nationalism in America, I somehow hoped that people would see that isolationism is not the answer and we instead need to rethink our economic model. Somehow Americans have been sold (among many other things) that something like universal income is a handout. I'm afraid we'll take the route that the UK is moving towards of being poorer overall and reducing globalization out of spite without it actually benefiting us.<p>I feel like as a liberal in America I live in a game of political jenga. Want to stop abortions? We can only do it in a way that doesn't involve decent sex ed or contraceptives (which leads to <i>personal responsibility</i>). Want to prevent gun massacres? We can only do it in a way that doesn't restrict access to guns at all and doesn't cost any money (which leads to more <i>personal responsibility</i>). Want to help out those impacted by globalization or those who have never been on sound economic footing? We can only do that in ways that don't involve <i>wealth redistribution</i> (which pretty much means <i>personal responsibility</i> of people to despite the fact that that already happens in many ways (so we're left with more <i>personal responsibility</i> and people like Shannon are responsible for a late-in-life pivot to a new job with anemic vocational assistance).<p>A lot of the people that have been hurt by globalization are the same people that support the party in our system that has taken most of the solutions to our problems totally of the table. We're in a straightjacket and could get out any of 10 ways but those would involve tools, all of which are (claimed to be) morally/philosophically unacceptable.<p>I know this was a rant but its been stewing since I read the first NYT article and this one just compounds it.
Some facts not mentioned by the news article:<p>1. Australian federal and state government spent billions to save the car industry. AUD$2.7 billion tax payer's hard earned $ was spent between 2001-2013.<p>2. Unions asked for huge pay rises every single year. For example, in 2011, they forced car manufacturers to provide 18.3% pay rise in 3 years, that is 6% a year non-stop for 3 years.<p>3. Car makers were forced to continue to provide pay rises when they were weighting the decision whether to shut down their production in Australia.<p>Take a look at the following The Australian article, you'd probably feel happy that you don't have such unions screwing local economy in your country.<p><a href="http://www.theaustralian.com.au/national-affairs/pay-rises-at-stressed-holden/news-story/d3cb0cba03b227ef28ce35ac0bbcfae0" rel="nofollow">http://www.theaustralian.com.au/national-affairs/pay-rises-a...</a><p>Australian is an unique country, a ticket inspector makes $100k AUD a year ($80K USD) from his/her unskilled job. With such background in mind, it is not hard to imagine how much you need to pay those workers to build cars.
Holden (GM) killed themself by building cars no one wanted anymore as the Australian iconic car has 6-cylinder engines and some maybe 8 cylinder.<p>Australian government couldn't subsidise cars that where losing sales year on year to smaller cheaper to run cars.<p>GM just wanted the handouts to keep it running when that dry up they pull the pin<p>John Cadogan is a bloke that called the end of the Australian Car Manufacturing many years ago and has a great video on why it died here.
<a href="https://www.youtube.com/watch?v=_uFYW5tMoeg" rel="nofollow">https://www.youtube.com/watch?v=_uFYW5tMoeg</a>
Just remember that at its height, Australia had at least 5 car manufacturer. We had Nissan, Chrysler, Mitsubishi, Ford, Toyota and Ford. Now we have nothing.<p>I was with a Tier 1 supplier in Australia before transferring to Germany, the market place is so different. Looking back, it's a wonder that it actually lasted this long.
What is fun is how if there is an oversupply of say lithium, the demand for electric cars can restore demand. If the dollar collapses though for example, it will take until car loans are restored before there are any demand.
The Chevy SS is a great car for the price, but most people in the US would mistake it for an Impala. In California I think the reputation of a car is more important than the actual performance.
Interesting to see how much was expensive energy costs.<p>Australia has tonnes of gas but unlike USA has not transformed that to cheap energy and the industries that come with it.
They were just seriously bad cars with a poor reputation and worse resale value.<p>It got to the stage where when buying cars, people I knew would check the VINs to ensure that they were not made in Australia.<p>Fords made in Australia were particularly bad. Toyotas made in Australia were not up to the standards of the Japanese built Toyotas, but were far better than the pieces of rubbish turned out by the Australian subsidaries of American firms.<p>Driving one of the US branded cars, was like having a big sign saying " I am a bogan<i>"<p></i> Australian slang for chav / redneck
> said it was the workers over 50 that were particularly struggling to find new employment<p>I always think it should say - there are some workers who've been cruising for 30 or so years and picking up a pay packet without reskilling. They probably won't be able to get a job without spending a bit of time learning some marketable skills