Friday, August 16, 2013

Ford Motor Company Will Stop Manufacturing Vehicles In Australia

Most of what follows was not written by me. Although I have lived mostly in Australia for more than 40-years, I was only generally aware of the insidious, but gradual, winding down of local manufacturing. Unlike the UK, which has had to depend heavily on its service industries, Australia has been cushioned by its status as one of the world's leading primary producers. As someone observed during the 1970s, our value to our friends and allies is as a mine, a farm and an 'aircraft carrier' (strategic outpost).

 More than 20-years ago I was teaching Commerce, aka practical business methods, to a class of poorly motivated Year 10 boys. I challenged them to look through their possessions and find something not made in China. I then suggested that the future belonged to those with the education, skills and motivation to join the "knowledge" economy. There was no WWW, Windows had yet to overtake MS-DOS and my pep talk to my pupils received the predictable response. Among them were found some who referred to the SBS as "wog vision". Enough said!

What has kept the United States afloat since 2008 is, in no small measure, its domestic market, its abundance of natural resources and the willingness of its people to accept lower wages as part of the sacrifice necessary to keep costs and prices down. No matter where you go in the US, or how you choose to spend your time and your money, you receive better service and value than you do in Australia, the UK or many parts of the EU.

I am not arguing in favour of the way ordinary wage and salary earners are treated in the United States as compared with similar occupations in Australia. I am arguing for a change of attitude on the part of Australians, especially towards education towards which we pay only lip service.

Much is said of the need for improvement but nothing is done about the social and community issues impacting on our public schools. Far too many children in junior high school lack motivation, self-discipline, parental supervision and basic skills that might reasonably be expected of a 12-year old child who has completed seven or eight years of schooling.

It was hard not to preface this with my tuppence worth after a career spent mostly in secondary school classrooms of one sort or another. This summary came to me courtesy of an old school friend who went to become a senior banking official. It speaks for itself.

Whoever takes office on September 8th will need to address the issue of the decline of Australian manufacturing, notwithstanding the fact that - whatever the rhetoric - governments exercise very little power over the economy in a democratic society.

 Ford Shutdown of Manufacturing in Australia
I've got an old mate who spent his working life with the Ford Motor Company, mainly as a computer programmer, and after the recent announcement of Ford closure in Australia, I asked what his feelings were.
Sorry? Yes - I feel I have been let down, but I am more sorry for Australia. The problem is not just Ford, it is the whole of Australian primary and secondary industry.
When I joined the industry in 1960 Australia had the following Automotive Manufacturers:- Ford Australia - (Plants in Geelong, Ballarat, Broadmeadows, Sydney, and Brisbane). Australian Motor Industries. - (Standard Motor Company and Mercedes Benz, Rambler, and Fiat tractors, - plants in Melbourne and Sydney) British Motor Corporation - (Austin, Morris - Plants in Melbourne and Sydney) Chrysler Australia- (Plants in Keswick, Mile End and Finsbury, Continental and General Distributors -(Peugeot - plant in Heidelberg Melbourne) - bought out by Mitsubishi Fiat - (tractor assembly at the Pressed Metal Corporation plant in Sydney) General Motors Holden - ( Plants in Port Melbourne, Dandenong, Adelaide, and Sydney) International Harvester- ( Plant in Geelong) Leyland Motors - (Albion and Scammel , Plants in Melbourne and Sydney) Renault (Australia) - (assembled by Clyde Industries, Victoria) Rootes ( Australia) - (Plants at Port Melbourne and Dandenong) Rover ( Australia) - ( Pressed Metal Corporation Sydney - most of the land rover was made and assembled in Oz) Volkswagen (Australia) - (Plant in Clayton Victoria) Willys Motors (Australia) - (Plant in Rocklea, Brisbane) White Trucks (Brisbane)
There was also another company assembling one of the early Japanese imports at Kangaroo Point. Then of course there was our own Repco, a major automotive parts manufacturer and engine re-builder at that stage, and a company which was then more than capable of building the first all Australian car.
These were not fly-by-nighters, some of them were in existence as early as 1914 - one hundred years ago !! From that foundation the only one left is GMH, whose very existence as a manufacturing facility is hanging by a thread.
I have no idea what has happened to all the major parts and machine suppliers, Duly and Hansford, Bendix, Borg Warner, Pilkingtons Glass, Zenford, Small, A.C.I, McPhersons, and countless others, all appear to be dead. Do you believe that all fourteen of those fifteen major companies were incapable? Shortly to be fifteen out of fifteen???????
We now have a relative newcomer, Toyota, with a plant in Altona, which will, in all possibility, be last man standing.
You think the Automotive industry is the only casualty? In the last few months Australia has also shut down the Shell refineries in Sydney and Geelong. Don't even worry about the long-dead fasteners, carpet, textile, shoe, clothing etc. industries - they are as numerous as prayer notes in the Wailing Wall.
It's time to ask the hard question, - is something wrong with Australia?
When I left Ford, in round figures it employed 5,000 at the Geelong site, 6,000 at the Broadmeadows site, 700 in the Sydney plant, and 300 in the Brisbane plant - 12,000 people. That is only the start. Then there are all the outside contractors directly dependent on the Company, we used to estimate this conservatively as about another 33% - 4,000. A straight 16,000 total. Then there is on top of that all the people who serviced those 16,000 - I have no idea how you calculate that, and it is a bit nebulous anyway as the 16,000 are still there, just at a lower level of economic importance.
It is blatantly obvious that our political system just does not work - I have been voicing this for the last thirty odd years. I have no idea what it should be changed to, the basis is sound, but the implementation leaves a lot to be desired. The political intelligence of the bulk of the Australian voting public is heading to absolute zero, and our politicians depend directly on that.
We continue to elect governments time after time on the basis of platforms of promises to be broken. Promises bordering on lies and deceit. We elect governments that have financial abilities that would make Bart Simpson appear genius material.
Just take a quick look at Singapore - about 10% of our population, no natural resources, just about no industry, and yet they have a large network of underground trains running every three minutes everywhere - just on a scale basis alone we should have about ten such systems here in Oz - well at least one in all the capital cities - that leaves the cost of four of them to throw in a decent road system between the capitals.
As soon as someone hears that they pop up with "yes ! but look at their social welfare system !" my answer - exactly - look at it, almost non-existent from the government, the family is the social security system.
I have seen our system, which is great in principle, abused right left and centre by those it is meant to protect, what should be a safety net is fast becoming an albatross around our necks. Come hell or high water that system has to be returned to the safety net it was intended to be. I don't know about now, but in Germany it was exactly a safety net and nothing else - if you were out of work you received a percentage of your wage for a period of time ( three months? I forget exactly), and then it took a dive to an "emergency payment" which bought food and not much else.
All the government sponsored gifts for new houses, births, carbon tax offsets, GFC handouts etc. are not gifts - they are the currency with which our politicians appear best familiar, in plain English, bribes - bribes for the next election. Time to cut that nonsense - it should never have started.
What is happening in Australia is the failure to recognise the concept of adding value. Build something - make something - repair something - create something - move something - sell something useful - all add value and this is the only thing that creates a healthy economic structure. Add to that the essential services and you are still in business. Replace that lot with fancy accountants, counsellors, psychologists, dole bludgers, excessive bureaucrats, excessive government, teachers who only put in a fraction of the hours of real workers, and a myriad other similar other sinecure type jobs and you land right in the proverbial can, just like Oz.
Have you ever thought what happens in the next war? You think there won't be one? There have been humans fighting humans ever since one stuck his stone axe in somebody else's skull. You think that is going to miraculously stop? Go talk to the fairies.
What do you think wins wars? Certainly not bureaucrats, counsellors and psychologists - not even servicemen alone. It is pure manufacturing muscle - whoever can build the most missiles, aircraft, bombs, guns etc. and have servicemen to deliver the intended result to the enemy. That is what wins wars. What are we going to build them with now? Do we now let our servicemen down as well?
Have a look back at what Ford Oz built for the last major war. Ford turned out thousands of those huge army transporters, hundreds of those huge landing barges, tracked Bren-gun carriers, Ford blitzes, Bofors guns, and no doubt other things that I have either forgotten or never heard of. The Chrysler plant in Adelaide contributed a similar effort, largely in the aircraft sector. Who is going to repeat those efforts?
Our recent engineering workforce had the ability to tool up a plant like Fords and make virtually anything at the drop of a hat. We made all sorts of odd things that nobody knows about - bits for the aircraft industry, tooling for carbon fibre parts for the French Airbus, tooling for those huge Boeing tail spars, blocks for Scalzo engines, right down to microscopic gears for eye surgery instruments. We completed huge tooling contracts for our 'opposition' in the automotive industry. How wrong we were - the real opposition were those WE put in charge of our own country.
Then there are the unseen things - such as the flow of information and skills from the private sector to the Australian Government excuse for an armaments factory. Probably all but dead by now, but when I was active I attended many meetings at the armaments factory, Monash University, and other venues where engineers from private industry passed on manufacturing engineering related information. Much of it gleaned from first hand international experience, and much of it our own experience.
So that is just a small shot at how our politicians have betrayed us and set Oz up for a right royal shafting. A real enemy could not have done the job better. You bet your sweet ass I'm sorry.
P. S. I don't care who you pass this on to - I will probably get an earful from someone who hasn't had his/her feet on the ground for 99% of his/her next to useless existence, but I can handle that.
My own view is that we do have a problem although I do not believe that it is related to our ability to defend ourselves. I am more concerned that, for our own sakes, and for the sake of the environment, we should strive towards self-sufficiency in all things. Globalisation contributes to resource depletion, pollution, environmental degradation, Third World poverty and climate change. It is not for me to spell out how and why this happens; it is well documented.

The communities best equipped to survive future challenges will be those which grow, produce, manufacture, buy and sell locally. There is a movement devoted to the study, theory and practice of sustainability. Its called Deep Ecology. I'd be inclined to vote for someone in September who at least knows what this means. It does not mean that I endorse all the policies of The Australian Greens.

As a rider to the above, my friend in banking also mentioned the point at which, to him, it seems the wheels came off Australian government financial regulation with far reaching consequences for all Australians to this very day.

Thank you for your recent e-mail.  I do not know if you teach Australian 20th century history, but you have probably heard of Stanley Melbourne Bruce, who I came across while researching the Commonwealth Bank of Australia.  It turns out that he was a bit of a spiv, not only because he was always dressed in top of the range suits and wore spats, but because he changed the CBA’s operating procedures from state banking to private (fractional reserve) banking and in the process condemned all Australians to permanent debt slavery.  As a result of his stupidity (he may also have been bribed) the Australian government since that time has had to pay market rates on its loans, instead of the 2/3rds of one percent it had paid up to 1924.  Market rates were also applicable to home loans, where formerly only a handling charge was levied.  Within five years his govt. had borrowed £230 million from the international bankers in London and state and federal debt had reached £1 billion.  By 1927 there was a large budget deficit.  I wonder if the “history” books ever bother to mention these facts.
Interest is the price we pay to use money we would not otherwise have the use of.  Raised by parents and grandparents who had lived through the 1930s, I was taught that saving is good, borrowing is evil and debt something to be avoided at all costs.

In this day and age the cost of avoiding debt is a simpler, less extravagant and wasteful lifestyle, just as it always has been.  Many, however, would point to the impossibility of home ownership and major community projects like the Sydney Harbour Bridge, and the Snowy Mountain Scheme, without first borrowing.  These are questions to be decided by those skilled in such matters. 

What is clear is that we need to learn the lessons of 1929 and 2008 and keep repeating them like a catechism.  An over reliance on credit is a house, or a nation, built on sand.