When immigrants from postwar Europe came to this country in the 1960s they were delighted to drive cars like a Holden or Falcon. These vehicles had a certain aroma - a concoction of leather, vinyl, plastic and petrol. Another tell-tale sign that you were in a warm sunny land was that you were expected to own a locally made refrigerator.
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For most migrants, to experience both was relative luxury compared with back in their homeland. For Australians it was all part of everyday life. Migrants readily identified, though in a wrong sense, with what the Australian essayist Donald Horne called ''the lucky country''. The phrase still sticks 50 years on.
It might not seem that way, though, to the 550 Electrolux workers in Orange who were recently told their jobs would be no more. Electrolux defended its case, saying that production in Thailand was much cheaper. How many times have we heard this?
Holden car workers, too, must be fretting about their future. There may even be an announcement before Christmas about whether Holden will stay in this country after 2016. If Holden were to go, it would be a crisis to the Abbott government; something that could be easily shooed away. It would also be a historic moment for this county in terms of its remaining manufacturing industry. General Motors has been producing cars in Australia for nearly 70 years. Ford has already signalled its intention to go.
The Coalition had adopted a fairly hard line before the election of cutting car subsidies as part of its campaign against the entitlement culture. Now it is in power the dogma is not so easy to swallow. It has asked the Productivity Commission to report on the viability of the car industry. The report is due in April but Holden might not want to wait that long. In any case it is hard to visualise the hard heads at the Productivity Commission actually recommending extra assistance to the industry.
The commission has spent its institutional life relentlessly detailing the cost of assistance to the motor industry. There is still a 5 per cent tariff upon imported cars though this is waived if Australia has a free trade agreement with a trade partner like Thailand.
The Federal Chamber of Automotive Industries recently commissioned research by the Allen Consulting Group about what the Australian economy would be like if there were no car industry in this country. It was an alarming projection in any language: some 40, 000 jobs lost in Melbourne and Adelaide, a commensurate loss in gross domestic product and capital investment and a sustained loss in the economy's ability to produce value-added manufactures.
The car industry has been described in crisis, similar to the times of the Whitlam government 40 years ago. Following the 25 per cent tariff cut in July 1973, Leyland, one of five domestic car manufacturers, was shedding jobs at its plant in Sydney because its share of the domestic market had shrunk to 6 per cent. Compounding Leyland's difficulties was that it had brought out a large sedan, the six-cylinder P76, when petrol prices were skyrocketing following the oil shock. Not long after Leyland closed down.
Now the P76 is a much sought-after collector's piece.
If Holden did vacate Australia, it would put pressure on the remaining manufacturer, Toyota, as component suppliers would find it uneconomic to continue to operate.
All this dislocation and upheaval is ultimately attributable to Australia's embrace with free trade. On the production side it is not too good; the three domestic suppliers have only 10 per cent of the domestic market.
No one is suggesting more protection is the answer, and the sizeable subsidies handed to the three car manufacturers since 2000 do not shed them in great light. It is apparent that Australians would rather have an imported vehicle than a locally made one. Can we blame them?
Today in Australia we have an array of choice in buying a car unmatched anywhere else in the world. Facilitating that choice is that the dollar is considerably overvalued. There seems to be no sympathy, certainly, any more to buy locally made.
Globalisation has drained any sense of economic nationalism out of us. We are accustomed to having the best and, if it's imported, so be it. Still, there is a pang of regret at the passing up of the old Australia that used to produce sophisticated goods.
Alex Millmow is a senior lecturer in economics at the University of Ballarat.
