Holden closure signals the slow death of manufacturing

The new Holden Cruze hatch back on the production line at the Holden Elizabeth plant in SA in 2011. Picture: David Mariuz
The new Holden Cruze hatch back on the production line at the Holden Elizabeth plant in SA in 2011. Picture: David Mariuz

WITH Holden announcing the end of Australian production, Australia will say goodbye to another iconic locally made brand. Politicians were quick to begin the blame game but many experts have taken a different view.

Paul Gollan, Associate Dean, Research and Professor of Management, Faculty of Business and Economics at Macquarie University

Toyota must be looking at their own operations very closely to see if they are viable.

Unless they export a lot more, and given the high cost base in Australia that will be hard, they will continue to struggle. They could focus on more prestige areas like Lexus or sports cars low volume, high value which rely on the level of skills we have in this country. But I'm still not sure that would work, given global markets. The reality is that large scale manufacturing of this type has very limited opportunities to grow and if we look at consumables, much of our manufacturing will continue to go offshore.

We need to look at alternatives if we are going to continue manufacturing. High-value products that quite obviously require a great deal of skill and high levels of qualification when it comes to labour, then certainly we have proven that we can achieve those sorts of outcomes.

Phillip Toner, Honorary Senior Research Fellow, Department of Political Economy at University of Sydney

Nothing was inevitable about it, however it comes down to (whether it was) possible to reach a renegotiated arrangement to retain the production facility, reflecting the incredibly adverse affect of the high exchange rate. What's pretty clear is the hostility of the current government and parts of the former government to the industry you can only describe it as indifference or hostility and that's probably a decisive factor.

This will make it so much more difficult for Toyota, given the part makers will lose so much scale that their unit cost will become prohibitive. There will come a point where there's really not much in it for Toyota. It'll simply be assembling 80 to 90 per cent of a vehicle from imported parts.

The other thing to note is there is no economic logic behind failing to deliver a reasonable level of assistance. The net returns to taxpayers are many, many times the level of assistance .

The demise of the motor industry will see a rapid contraction in the remaining manufacturing industry and it will lock us into resource development as the key economic driver.

Henry Ergas, Professor of Infrastructure Economics at University of Wollongong

The announcement that Holden will cease its manufacturing operations in Australia will obviously have significant consequences for Holden's employees and for Holden's suppliers, as well as for the communities in which they are located.

Governments should do what they can to assist in smoothing the transition that lies ahead.

Unfortunately, the fact that previous governments lacked the courage to face up to the inevitable means those adjustment costs will now be higher than they need to be, as the car industry attracted resources away from viable and competitive activities.

The reality is that our labour costs are extremely high by international standards and have risen further in recent years. With a further tightening in domestic environmental standards for cars looming, there is no realistic prospect of the Australian industry achieving the levels of competitiveness that could allow it to survive.

Hamza Bendemra, doctoral candidate in engineering at ANU

Any news that involves losses of Australian jobs is of course unfortunate. Job losses associated with this news go beyond the reported figure of 3000 Holden workers, as there is an entire ecosystem of suppliers and contractors, typically SMEs, that deals with car manufacturers. The car industry is also a contributor to R&D research in Australia .

Several billion dollars of taxpayer money has already been spent supporting the industry but I believe more may be needed with this new influx of highly-trained technicians and engineers that will enter the job market when Holden finally closes shop . Making sure that those skills are appropriately transferred to other industries will be key.