Rudd Responds To Bracks Review: Pledges $6.2 Billion In Assistance To Australian Automotive Industry

kevin-rudd
Nov 10, 2008
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The Federal Government today handed down its response to the Bracks Review of the Australian Automotive Industry at the Automotive Centre of Excellence in Melbourne. The Government's response, 'A New Car Plan For A Greener Future', will provide a staggering $6.2 billion in assistance to local manufacturers over thirteen years. Of these grants, $3.4 billion is targeted to the 'greener assistance program', the Automotive Transformation Scheme.

Additionally, an expanded Green Car Innovation Fund of $1.9 billion is to be brought forward to 2009 and to run over ten years. LPG is to get a boost with a $10.5 million expansion of the LPG vehicle scheme, beginning immediately, that will double payments to purchasers of new private-use vehicles that are factory-fitted with LPG.

Other significant funding initiatives include $79.6 million to the Automotive Competitiveness and Investment Scheme; $116.3 million to assist structural and labour market adjustments through mergers and consolidations; $20 million to assist suppliers integrate into national and global supply chains, and $6.3 million for an enhanced market access program.

 

"If we want the Australian car industry to prosper, we have to make it stronger - more innovative, more productive, more competitive and more export-focussed. That's what A New Car Plan For A Greener Future aims to do," Prime Minister Kevin Rudd said.

 

The new Government plan, in raising assistance to $6.2 billion, adds $3.2 billion in net new funding to the $3 billion previously pledged by the Federal Government.

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The aptly named Senator Kim Carr, Minister for Innovation, Industry, Science and Research, said that the new plan "will revitalise an industry that is critical to the Australian economy and Australian community".

Of course, while this plan will no doubt be welcomed by local car and component manufacturers, things globally may yet overtake the Australian vehicle manufacturing sector. Our national industry is tied to the fortunes of the parent companies. In the third quarter of 2008 alone, GM US lost nearly half the amount pledged by the Australian Government to the industry here over 13 years (GM posted USD$2.5 losses for the quarter). Ford US is in similar dire straits.

Reports from the US suggest that GM has only a five year commitment to the Pontiac G8. Development dollars for new models - new Commodore, Falcon and Territory - will be very thin on the ground from those two 'parents' should Holden or Ford Australia have the hand out. Furthermore, with little more than a 20 percent market share between them, funding the development of replacement models from within Holden and Ford Australia - even with the assistance of 'green funding' - would seem to be a very tall order.

Ford's global 'One Ford' strategy, would also seem to signify difficulties ahead for the Falcon and Territory, 'a greener future' notwithstanding.

The problems for the local industry will likely persist.

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Comments

  • Ran [reply]
    1 year ago 0 points
    Can anyone tell me why it has come to this? Ford and Holden have had more than 10 years to diversify their basked but instead have kept everything in the one. Why have they not created a medium or even small car (aka Laser made in Granville Sydney), now because their only drawcard has hit the skids people are saying "Poor car manufacturers they are hard hit" Duh!!!. I wish I could tell my Boss that I only focussed on one part of my job as it's what I want to do and ignore the rest till it falls in a heap and then get a bailout package. They need to start looking out the window a bit more often (overseas) and see what those who know what they are doing.... are doing.
  • Bret [reply]
    1 year ago 0 points
    Ran,
    Mate why leave Toyota out of your comment? They have to date taken the biggest chunk of an aspect of the funding.

    In fact Toyota sell less locally made cars than the other two, and arguably is in the most dubious psoition, should tarrifs be reduced.
  • Alec [reply]
    1 year ago 0 points
    If we lose the automotive sector, we lose not only that whole industry, but the research and developement skills associated.
    These skills rub off on all other industries.
    Remember, automotive is one of the most competitive sectors to be envolved in.
    Every country is providing their local manufacturers with funding.
    You would be crazy to think Australia would be better off without the big 3 locals.
  • Alec [reply]
    1 year ago 0 points
    Competition improves the breed and there is no doubt that Ford, Holden and Toyota manufacturing in australia has had an impact on the improvement of the entire manufacturing sector in Australia.
  • Ran [reply]
    1 year ago 0 points
    So are we to say now that they are right to keep making vehicles that nobody wants because that is what they do best? How about rewards for the ability to meet the demands that makes them viable for a global market? We need to make them accountable for them lack of planning and foresight. None of what you guy's have said leads me to believe that this bailout package should go ahead. Why not give it to the smaller operators out there trying to market their vehicles that do meet what the global market wants.
    • Bret [reply]
      1 year ago 0 points
      Toyota also has all it's eggs in on basket - they only build Camry's (some with a V6 and diff bumper). But then looking at sales figures, Toyota are making cars that nobody wants, but that's OK because it's not Holden/Ford?
  • Kipper [reply]
    1 year ago 0 points
    $6.2 Billion to help failing automotive industries... look at how much trouble GM are in the US and you see that they will need alot more that this from the US govt.

    GM and Ford have failed to keep up with their Japanese and European rivals- and deserve to be in this position. The govt should not keep throwing money at them to try and stave off their inevitable bankruptcy.

    $3.2 Billion for the "Greener" car fund... if these funds were provided as subsidies for renewable energy development- you would see an infinitely greater impact on our greenhouse emissions.
    • Bret [reply]
      1 year ago 0 points
      So far the only money allocated (and forcast as yet) has gone to Toyota for little more than tooling up to build a car developed elsewhere - now that is nothing more than a free handout.

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