In the end, there was no sentiment. Only someone who hadn't been paying attention could possibly have been surprised by General Motors' decision. It was strictly business; simple calculus. Holden was losing money, and without huge ongoing subsidies was completely unsustainable. This tends to happen when you're making a product not enough people want to buy. Our local subsidiary of the huge conglomerate couldn't defy gravity any longer. The brand was scrapped.
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The real problem, though, is simple: GM was in the wrong business. Instead of building cars, it should have switched to building submarines (or frigates, or armoured vehicles) instead. Then the subsidies, courtesy of the taxpayer, would have continued on and on for years, a gravy-train without end.
Make no mistake: the only reason we continue building major weapons systems in this country is because politicians are busy shovelling money at a couple of select multinationals. Despite all the flowery verbiage, companies like BAE, Naval Group and Rheinmetall aren't actually building our frigates, submarines and armoured vehicles because they're "excited" to be working in Australia - they're in it for the money. And it's good, because there's lots of it.
Governments of both political persuasions know that building complete items of military equipment in Australia costs (at least) 30 percent more than it would to purchase the finished product on the open market, and yet we do. At one time this made sense, because it kept skills in the country and boosted our broader manufacturing capacity. Now there are other ways of doing this, by supporting component makers and design skills within bigger companies. There are two very clear models showing the path forward. What a pity our politicians are still living in the land of pretend, too cowardly to risk telling the truth to voters.
Our aircraft components industry shows what we should be doing.
We gave up building planes in 1985 when the Government Aircraft Factories' Nomad developed an alarming habit of dropping out of the sky. More than 10 of these aircraft have crashed and there have been numerous fatalities: from a two-star Philippine General to a six-month-old baby. The point is what came next.
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Governments of both political persuasions accepted reality. Instead of propping up an industry and justifying it with rhetoric like "niche capability", Boeing was encouraged to take over GAF. Instead of worrying about the brand sticker on the front of the plane, a genuine components industry was fostered. Today every one of Lockheed Martin's sophisticated Joint Strike Fighters - the most advanced aircraft anywhere in the world - comprises some parts that are manufactured in Australia. Yes, that was part of the deal when Australia signed on to the project early and it was part of a quid pro quo, resulting in a portion of the work being contracted here, just as Turkey also received its share.
The difference is that this country is now producing world-leading components that require no subsidy apart from a level playing-field to compete in.
And this is the critical lesson. Prime Minister Scott Morrison's complaint, that billions in subsidies were handed over to GM, is nothing more than petulant special pleading, completely irrelevant to both the company and the taxpayer. What was needed was exactly what was given: a clear picture of the future business environment. This began 30 years ago with the release of the Button car plan. This balanced an understandable desire to keep manufacturing in this country against the need to keep car prices as cheap as possible. In the end it wasn't just low prices that won out: Aussie industry wasn't producing the sort of vehicles people wanted to drive.
The other lesson from the demise of Holden is that attempting to "Australianise" military equipment originally made for another market doesn't offer a way forward either. GM decided it wasn't worth the money to convert its US-designed, left-hand-drive vehicles for this market. Similarly, we've spent billions trying to make perfectly good military helicopters better and give them an "edge" that would make them either more appropriate for our conditions or more effective as weapons. The result has been successive disasters.
There is a future for Australian industry - it just won't be enhanced by pandering to public opinion and the idea that there's "something in the water" here that fosters a unique brilliance (fluoride, perhaps?). Yes, Aussies are clever, and yet, perhaps surprisingly, there's never been any suggestion that as a nation we somehow produce more raw intelligence than the people of any other comparable country. Our way forward won't be enhanced by the complacency and special pleading that we've seen associated with Holden. Of course consumers will buy the sort of cars they want, and if GM doesn't make these vehicles people will buy them from a company that does. And of course the huge multinationals will simply take the money and run when the going gets too hard - and that's because they don't owe us anything.
If our aim is to actually nurture vibrant and innovative business, we've got to understand exactly what our real strengths are and play to them, instead of focusing, like simpletons, on the bright decals at the front of the bonnet.
Unfortunately this week's events show no indication we are anywhere near coming to terms with what this country can achieve, and what it can't. The problem is ego.
Australian (or "Australianised") businesses like CAE and SAAB show this country still retains great manufacturing and design skills that don't require any subsidy. Some of these better military businesses will be presenting today at the Australian Defence Magazine Congress here in Canberra. What the country needs, however, is a minister capable of laying out a coherent plan to rationalise and foster the sector. Unfortunately there's been no indication so far that Melissa Price might be that person.
- Nicholas Stuart is a Canberra writer and a regular columnist.