After 64 years manufacturing cars in Australia, making billions in profit, and taking billions in government subsidies, General Motors Holden has announced its Australian factories will close in 2017. At least 3,000 directly employed workers face the sack and up to 45,000 jobs in the auto component manufacturing industry are at risk.
Shamefully, no one—not the Labor opposition, not The Greens and most shamefully, not the car workers’ union leaders in the Australian Manufacturing Workers’ Union (AMWU)—is proposing a fight for the Holden workers’ jobs.
But there could be a fight for jobs, nationally and internationally. If the union leaders gave a lead, there could be a campaign of industrial action to cut off Holden’s profits and exports, and appeals for community and international solidarity. Occupations could prevent Holden removing any valuable stock and equipment. Such a campaign would put immense pressure on Prime Minister Tony Abbott.
If Holden will not guarantee jobs, the campaign must call to nationalise the company. A campaign to turn its factories over to green manufacturing could mobilise both the union and the climate movements.
Make GM pay
The media has blamed workers and the unions for pricing Holden workers out of a job. Nothing could be further from the truth. General Motors’ Australian factories are, in fact, the most productive in the world. Yet workers have made concession after concession—only for the GM bosses to pocket the money and then cut jobs anyway. The Holden workers’ current enterprise agreement, signed in April 2013, locks in a wage freeze, while forcing every worker to work 16 minutes longer each shift for free.
Tony Abbott is offering only $100 million to South Australia and Victoria to retrain sacked Holden workers. It’s a joke. When Mitsubishi closed in 2008 only a third of the very highly-skilled car workers ever found full-time work again. Holden and Toyota workers will be thrown on the scrap heap without a fight to keep the jobs.
Successive governments have handed the car industry $30 billion since 1997—that’s almost $2 billion a year of public money. In 2008, at the height of the economic crisis, Holden workers agreed to work half-shifts and take a huge pay cut to keep operations going. Labor governments could have tied the granting of subsidies to job guarantees, but never did.
Holden made a combined profit in 2010 and 2011 of almost $202 million. But in March 2012 the Gillard Labor government gave another $215 million to Holden, claiming it would keep the company producing cars in Australia “for at least the next 10 years”. Within 13 months of this Holden had announced another 680 jobs would be cut.
In 2012, GM made a profit of $7.6 billion. They can afford to keep the factories open.
No more concessions
Right wing commentators are demanding that the lesson of Holden’s closure is that Toyota workers must sacrifice wages to keep Toyota manufacturing in Australia.
So far, the unions have resisted Toyota’s demands. But the risk is the officials will give in the same way they gave in at Holden. As the Financial Review revealed, “Many of the things Toyota wants—the shorter Christmas lockdown, fewer sickies, lower rates for new temps and freedom to use them—were agreed to by [the AMWU at] Holden. But the union doesn’t like how Toyota went about it.”
Nationalise Holden
Over the last 12 years Holden’s profits averaged $50 million per year. Australian taxpayers gave the company on average $153 million per year.
This means all the investments in plant and equipment and training has been bought by taxpayers and built by workers.
Australian workers have already paid for Holden’s Australian factories; they belong to the workers. If Holden won’t guarantee the jobs, we must fight to nationalise Holden—for a take over of its factories under workers’ control.
This would ensure that jobs and skills are maintained, and apprentices trained. Holden’s manufacturing capabilities could become a base for socially useful production to reduce carbon emissions—making large-scale solar plant equipment, public transport vehicles, wind turbines and so on.
Two bad arguments
But this is far from what we’ve heard so far.
The official political response to this calamity has been split between two poles—the free marketeers who argue that nothing can be done, and the protectionists who argue that the government could and should have acted to keep Holden here by offering new levels of government support on top of the $1.8 billion that the company has already received in the last decade.
While those who argue for ongoing subsidies are at least concerned to protect jobs, in reality subsidies only boost the car bosses’ profits and don’t guarantee jobs.
Abbott’s free market “do nothing” strategy shows his contempt for workers’ jobs. Indeed the Coalition government itself is sacking up to 14,500 public servants.
The protectionist argument of the Australian Manufacturing Workers’ Union (AMWU) and the Labor Party claims to be about saving jobs. Their protectionism, however, means subordinating wages, conditions and the right to a job to Holden’s profits.
Rather than organise the fight that’s needed, AMWU officials have even painted Holden as the good guys, arguing that Holden’s bosses have been fighting to keep operations in Australia.
It should be obvious that cosying up to the bosses hasn’t worked. It will take an industrial fight against both Holden and Abbott to save the car workers’ jobs.
Alternate plans?
The day before Holden announced its closure, Holden boss Mike Devereaux gave evidence to the Productivity Commission. He argued that for Holden to have to have a long term future in Australia, it needed a “Public Private Partnership” with government. Essentially, he wanted a government bailout, more stable and larger government subsidies to underwrite Holden’s “viability”, that is, profits.
This is the kind of bail out that GM got from Obama when the company filed for bankruptcy in the midst of the economic crisis in 2009. The US government forked out over $50 billion to save the company. But the Obama administration attached no strings to its effective takeover.
GM did make some repayments to the US government, but drove through savage cuts on a reduced workforce. Despite making a record profit over $7.6 billion in 2012, US taxpayers are still owed $10 billion that will never be repaid.
The South Australian Labor Premier, Jay Weatherill, has proposed other versions of government support for Holden. One suggestion is to
turn Holden’s Adelaide plant into a government armaments factory as part of the $10 billion “Land 400” Defence project.
The other proposal is to make the Holden factory part of the Port Adelaide defence shipbuilding Techport facility. In other words the Labor government can envisage the government taking over the plant (no doubt compensating Holden) if it is to be part of increasing Australia’s military capability.
The relationship between car production and the military has a long history. One of the key reasons governments subsidise car production is that there is a large overlap with the capacity to build military equipment, as was seen in the Second World War when governments demanded that car factories be immediately retooled to build jeeps, tanks and bombers. So far the government has made no guarantee that all the jobs would be guaranteed.
But rather than turning potentially useful manufacturing capacity over to the destructive aim of Australia’s military, the nationalisation of Holden needs to be the beginning of a green manufacturing sector—building green jobs for public transport, renewable energy infrastructure and community needs.
Jean Parker
I absolutely agree. If GM doesn’t want Holden anymore, it could and should be owned by the Australian people. We have already paid for it. Nationalize Holden now.
I have been thinking the same thing. We own the Holden Brand. By nationalising the company we are no longer restricted in our export markets. Holden, and Ford have always been restricted in there markets because of there US parent. Let me know how I can support this.
Just mentioning facts:
Australia is a country that has lost out in many areas and will continue to do so due to 3 main reasons-innovation, technical skills and education (all way behind). Manufacturing isn’t the only industry that has faced challenges due to these 3 reasons; retail and other sectors too. Add the niche strategy that Australia has used for decades via agriculture, mining, etc and that would be the 4th failure-putting all its eggs into 1 basket for decades instead of using the diversification strategy.
Let’s start with the tertiary education sector which few years back was Australia’s 3rd largest export sector (now 4th). How does it survive? Foreign students especially from China and India though lately South Americans, North Americans and Europeans too. How many Australians have a university qualification? Australia population represents 0.3% of the world population and just 25% of that have a university qualification. How many have a Masters qualification? Not many. Some to most firms in Australia consider Masters overqualified. Well, sad news for 90 to 99% of the businesses in Australia that represent small to medium sized ones – rest of the world have people who have either 2 Master qualifications or PhDs and professional certifications. Unless, good at entrepreneurship, not needed to study. Sadly, for Australia, that has gone behind especially when it’s niche strategy also got busted because Australia has been behind with innovations and technologies since World War 2. Also, how many foreign exchange students from Australia land in Asia? Not many compared to ones from US, Canada, UK, etc. So, those countries are learning about Asian cultures where as most Australian foreign students land in US, UK, etc (psychically close countries instead of the psychically distant countries as well). US, UK universities are still the best in the world and most are cheaper than the Australian ones nowadays as Australia’s become expensive for that so the universities that are on the same level as Australia are now the challengers. Which are those countries? Canada, Germany, Japan, Singapore, China (mainland and HK), etc. Addition to those, there are the blended learning (online) and MOOCs that are challenging the educational landscape, starting from primary education right unto tertiary one.
Where is Australia for innovations and technologies? The country doesn’t encourage much of both including funding which is the reason why Australian startups end up in USA. Australia gets 75% of its GDP through services as it’s a developed nation though it has come out with some innovations but not that many compared to the rest of the world even with the basic innovations. Others have gone for coopetition like Apple,Samsung,Google,etc;Netflix and Amazon;Tesla and various automobile firms and so many others where rivals don’t just work together but innovate as well. Australia has zilch there. Then there is the blue ocean strategy as well where not only low cost innovations occur but a whole new market segment comes up. Rest of the world so many while Australia hardly any. . Even New Zealand is above Australia when it comes to innovation.
Taking marketing technology/digital marketing as the industry, here are some weaknesses including reasons why Australia has failed (they’re all genuine articles that have come up in the last few weeks to couple of months):
In Australia, what would be the reality for Marketing Technology or Digital Marketing? The answer to that question could be seen from a number of genuine sources including articles ranging from the last few weeks to about a year, some of which are (same for other sectors too and not just marketers as shown under 7th and other points):
1) Marketer study warns of skills shortages in digital marketing in Australia
2) Two-thirds of Aus marketers ‘aren’t effective at digital’
3) Aussie brands failing to embrace digital real-time customer service
4) Lack of skills a threat to projects
5) Is Australia That Far Behind in the Digital Market?
6) Big data policies lacking in Australian and New Zealand organisations: survey
7) Australian firms lagging behind
8 ) Australian retailers are digital-relationship laggards: Capgemini & Sydney University study reveals
9) Australian SMEs not meeting consumers on social media: statistics from Yellow Pages report
10) PayPal: Only 14 Percent of Australian SMEs Are Taking Advantage of Online
11) Latest ABS statistics: many Australian businesses still not engaging online
12) Australian businesses struggling with cross-channel marketing
13) Australian manufacturers are failing to invest in productivity raising IT: study
14) Average of 44 small businesses closing their doors each day, according to Australian Bureau of Statistics data
15) Experts say Australian business being left behind
16) Small Business Left Behind As Australian Business Confidence Lifts: NAB
17) Australian small businesses are late to the online marketing party
18) Too little, too late: Is Australia losing the online retail game?
Some of the reasons for the above could be seen from the following:
1) Can Australia’s education system meet demand for digital marketers? (Even top universities of Australia are way behind compared to counterparts from US, UK, Canada, etc where students can take subjects from different schools like Arts, Engineering, Business, etc. Additionally, some Australian universities still teach traditional subjects at universities [The two university comparison examples can be University of Sydney via Commerce degree and WUSTL of US both via Marketing major]).
2) Aussie women lag behind men in numeracy skills
3) Aussies spend big on technology, but don’t know how to use it
4) Small Business Nation 2013 – Around 90 to 99% of the businesses in Australia are small to medium sized ones though most are neither innovative nor have much of technology (not tech savvy)
5) Australia is Well Behind Other OECD Countries in Pre-School Education
6) University rankings show Asian rise and Australian slip
7) Australian students slipping behind in maths, reading: OECD report
8 ) If Australia Could Get Over Its ‘Fear of Failure’ Tech Startup Firms Could Contribute $109B to Economy by 2033, Create 540,000 New Jobs – Google Study
9) Australia is no innovation leader: GE (connected to Australia lifts ranking in Global Innovation Index, but still lags behind New Zealand).
10) Australia at risk of squandering expat expertise as brain drain hits reverse
11) Is Australia Less Tech-Savvy than We Thought?
(More of the marketing weaknesses in last 1 year and a bit on the logistics and supply chain in relation to Australia can be found under http://loveroftechnologyandbusiness.blogspot.com.au/2013/12/reality-of-australian-marketers-and.html . It also has the components or landscapes of Marketing Technology and Digital Marketing). As mentioned under that, Brand valuation could be seen via BrandZ of WPP as well as Interbrand of Omnicom and brandirectory.com that is part of Brand Finance. The top brand from Australia would be Woolworths ranked in the 100s way behind the ones from US, UK, Canada, India, China, etc. Woolworths and Coles duopoly in the supermarket sector though IGA, Aldi and Costco are 3 other players there ( https://theconversation.com/factcheck-is-our-grocery-market-one-of-the-most-concentrated-in-the-world-16520). Zara as well as others are knocking DJ and Myer ( http://www.fool.com.au/2013/08/14/clothing-retailers-be-afraid-very-afraid/ ). All of them have failed with innovation and technology (just like most Australian industrial sector) which can be seen under http://www.afr.com/p/australian_retailers_stumped_by_meuCL7di6LxiZG4VotdITL .
US at least did something with 3D and 4D printing-part of disruptive innovation that could challenge emerging and developing nations;what has Australia come out with.US manufacturing also fell into recession 30 years back but came out 10 years later with innovation-Intel is 1 proof of that and that video is ‘Made in USA’ under America Revealed under PBS.org. Innovation took over 30 years back from customer centric approach started by P&G,IBM,etc that went on to Google,FB,etc and that’s world’s top firms and ones that survive depend on innovation and technologies. Also, if going to say robotics, well most jobs that exist today won’t exist in 10 years time thanks to technologies-need to adapt and change. China, Japan, etc have robot chefs. Self service revolution has existed for more than a century-ATMs, kiosks at airports, etc as well as retail sector are proof of that+3D and 4D printing +blended learning that has gone online as well as MOOCs which includes Coursera and Udacity are changing educational landscape from primary to tertiary education [US,UK and Australian top unis have their courses there and it can be done for free without certificates but if want certificates, they are cheaper than traditional education though not all courses are under the MOOCs] and so on including hybrid trade shows. DVD rentals are backward technologies that rest of the world came up with a decade or 2 ago as there are Netflix, Hulu,etc.Australia’s way behind in technology and innovations-both marketing and supply chain + also transportation as it’s got on to mobile payments which rest of the developed world have been on for about a decade-some of the emerging nations have been on it for 5 to 10 years also.
Create a “Nationalize Holden” facebook page to help generate public support for this proposal.
I just saw an ad for Holden as a youtube mandatory thing that pointed out Holden are here to stay, continuing to make cars and selling them into Australia – it’s just the manufacturing that’s going offshore!! A bloke looked up from his CAD/CAM screen to say Holden are ‘here to stay’. Hurrah!!
For as long as it’s cheaper to ship cars to Australia from China or a low wage south east Asian country that’s reasonably politically stable and willing to set up a factory, that’s going to happen I guess – it’s the flight of capital and manufacturing from high labour cost countries to low labour cost countries. You can’t stop multinationals exploiting labour arbitrage. Of course as this happens repeatedly various wage adjustments are going to have to be made, there is a net loss of GDP in the country, and so on – these are ‘externalities’ to the multinationals. Could be some hollowing out of the middle class involved, or else perhaps all prices will adjust down as the trend continues and wages disappear to be replaced by nothing.
You can’t really ‘nationalise’ Holden as it’s a wholly owned subsidiary of the US company GM, including all plant and IP. I suppose the govt could create its own car company if it wanted to in competition, unless GM are prepared to sell all their plant to the govt rather than put it in crates and ship it to the new location offshore. Of course you can’t just seize a legally operating company’s assets in a country such as this one.
It seems like the local design guys might keep their jobs, the cars may well still be designed in Oz, but will be manufactured elsewhere — the main reason for this being that they can produce a better car tailored to local conditions that way rather than any loyalty to the workforce. Holden may well take a reputational hit with buyers for a while, unless the price consequently also comes down to a Hyundai price or similar, in which case people will swallow their pride and part with their money. When Blundstone went offshore in a similar move (and started charging even more for their boots at the same time) I stopped buying them. Other bootmakers remained manufacturing in Australia.
Not sure how I got to this page, but its a good effort. Im in no way left leaning but on this issue you have my support. I cannot understand why successive governments did not make Holden and Ford sign over the deeds to plant and equipment in exchange for ongoing support/bailouts. Basically here is you $250M but we take a $250M stake in your factory if you do a runner or cease a certain level of production in the next 10 years. I always thought this. Banks do this if you go for a loan as a small business, why are these lots any different?
Sean above said we cant just walk in and sieze the plant. I say, in this case there is a strong case we actually could given the amount of money we have forked over. Sure the US well go spare and some fourex markets may have temporary coniptions, but I think if we put our case it would pass. And noone will ever ask for government support again without knowing what they are getting themselves in for.
Two possible uses for the plant that nobody seems to cotton on to are busses or rolling stock. We have 6+ state governments who all need (a) Busses and (b) railway rolling stock (passenger electric and freight) replaced and regular intervals. Rediculously for a country of our size all of this now seems to happen overseas or balkanised between states. As these fleet updates always happen and can be schedule, centralise the plants for each in two states and ensure Aussies do the work. I dont care if the factory is overseas owned, as long as it employee aussies. Beats importing fall apart trains and rubbish buses from China or whereever because some idiot state government enters into some PPP which inevatibly fails.