Angry PM Scott Morrison accuses General Motors of letting Holden 'wither away' after taking $2bn in subsidies
Angry Scott Morrison accuses GM of letting Holden 'wither away' after taking $2bn in subsidies
For context: Holden is an Australian home-grown brand. It became a subsidiary of General Motors in 1931, but it started manufacturing cars in Australia from 1948. The 1950s FJ Holden is an Australian icon. The Holden Commodore was the family sedan for Aussies all through the 1980s & 1990s. Aussie car lovers fell into two tribes: Holden or Ford. If you ask any Aussie to name a few famous Australian brands, Holden will get a mention.
General Motors stopped manufacturing Holdens in Australia a few years ago, but they assured us that Holdens would continue to be made (albeit overseas) and sold here.
Now the brand itself is being axed, at the end of next year.
There may have been a time or reason when government incentives to industry made sense, but the time has long since passed. The good news is a few municipalities at least are starting to wise up, primarily around sports arenas.
It’s a shame it is taking so long, there’s real economic harm in those subsidies.
I’m of the opinion that we should let these big companies fail, and just build a robist safety net to catch the lower tiers of employees and comfortably ease their transitions.
The real problem is how to ensure those who most benefit from the unstable boom and bust growth cycle share their fair burden of paying for that net. I don’t have a good answer, as any technical solution (i.e. change in tax regulations) is susceptible to technical workarounds.
So it's no longer relevant to keep a manufacturing sector operating in a country? Australia used to make cars. Now it doesn't. We've lost a whole industry over the past decade, and thousands of workers were put out of their jobs.
A study was done on the former employees of one car manufacturer a few years after they were fired. It found that only a minority of them had found permanent full-time work at a similar pay. The situation of the remaining ex-employees ranged from lower-paid work, through casual work, to still unemployed. The manufacturing sector in Australia is dwindling. There's nothing for them to transition to.
The company in this case isn't failing. It's simply ceasing operations in one country - and taking a long-lived iconic local brand with it.
All good points, but i’m not sure how they cut against my general conclusion. If i were god-emporer, i’d banish personal cars altogether, driving a personal car is the single most environmentally damaging action an individual can take. Airline travel is a close second, but at least long distance travel has offsetting social benefits.
I’m a big proponent of government playing a pivotal role in ensuring every citizen has access to healthcare, food, housing, and dignity. I challenge that propping up large companies is an effective way to accomplish that goal.
I’m not smart or well informed enough to say for sure, but i feel pretty strongly gm would fail were it not for excessive government support, including subsidies and tax breaks and loans and military contracts, etc.
Edit: i also fail to see the value of including corporate brands in national identity. I know it happens with great frequency and ease, but that doesn’t mean it’s a good idea.
There's political reasons to keep manufacturing sectors within a country's borders, mostly strategic ones. Though that is pretty divorced from socio-economic reasons.
There are arguably socio-economic reasons as well, but the overriding rule is that of the free, global market. Keeping manufacturing in Australia under the old configuration makes it less competitive, that's just the naked truth, and in the free market such companies "lose". GM doesn't want that so they're reconfiguring their process and moving overseas to lower their costs and keep prices competitive, collateral damage be damned.
I'm not elaborating much because I figured this was generally understood, though.
That's fascinating, I had no idea Holdens was a thing. Looks like I have something to read up on tonight. And fuck GM for taking the money and running, I'd be pissed too. They do that here too unfortunately, closing up factories after receiving massive subsidies from the state or federal government to keep them open. GM's an asshole company.
Coincidentally enough, Feature History recently released a short video on the history of Holden that you might find valuable as a jumping off point: What Happened to Australia's Car?
The Australian car industry, in particular ford Australia, was an interesting microcosm.
They developed the same platform and engine for almost 56 years, since the original ford falcon was imported from America. The last inline six falcon engine (2016) even has the same bore spacing as the original.
Why in the hell would anyone give credence to an assurance made by a corporation?
Because they were taking government subsidies to continue operating in Australia.
Well, I'm not a lawyer, but maybe there should be some kind of legal binding there? I'm not saying that's okay, but expecting large corporations to do things out of moral obligation seems unrealistic.
Even if there was a legal requirement tied to those subsidies, how would that be enforced? We can't force GM to keep its Holden outlets open. So all we can do is punish them after they close down those outlets. The only realistic punishment available is a fine (we can't really put the CEO of General Motors in jail!). GM has already budgeted $1 billion for the cost of this closure across Australia, New Zealand, and Thailand. I'm pretty sure they can afford whatever fine the Australian government might impose.
It would not be fool proof, sure. But a contract certainly beats nothing.
Well, it's moot now. The government didn't make General Motors sign a contract for their subsidy. And now General Motors is ending an iconic Australian brand.
As someone who grew up in the Flint area, fuck GM. This is par for the course for them.