Steve Irons (Swan, Liberal Party) Share this | Hansard source

I thank the member for Calwell for her contribution in this debate on the Automotive Transformation Scheme Bill 2009 and the ACIS Administration Amendment Bill 2009. I might disappoint her by not attacking the unions, but if she wants me to and invites me to then I might have a shot at them. It is great that the member for Calwell has the Ford factory in her electorate. I hope that the member for Calwell actually drives a Ford and supports the industry that employs people in her electorate.

When the car industry is spoken about in this place there is usually an eastern-centric focus, so today I hope to give a Western Australian perspective. Eastern state towns like Geelong are often referred to as the manufacturing heartland of Australia. This is true: large-scale manufacturing in the east currently employs some 56,000 people, producing annually around 300,000 vehicles. However, to treat the large manufacturing plants as the only part of the Australian car industry would be wrong. There are many complementary industries across the country that rely on the success of the Australian car industry. In fact my electorate of Swan has 105 motor vehicle body and trailer manufacturing companies, six automotive electrical component manufacturing companies and 43 other motor vehicle parts manufacturing companies. The industry extends further with other organisations such as service providers that are reliant on local vehicle manufacturing.

The largest motor vehicle retailing company in Western Australia, the John Hughes Group, is located in my electorate of Swan. Just the other day my office was assisting The Tyre Factory in Cannington with their telecommunications problems. This is another type of company that is related to the motor vehicle industry. The point I want to make is that the success of these small businesses in my electorate depends on the success of the large-scale manufacturing in the east. They should all be considered part of the automotive industry. Automotive legislation considered by this place will therefore ultimately affect small business and jobs in Swan.

It is important that I rise today to speak on the Automotive Transformation Scheme Bill 2009 and the ACIS Administration Amendment Bill 2009. The coalition has always been a great supporter of Australia’s car-manufacturing industry, its employees and the three main motor vehicle producers in Australia: GM Holden, Ford Australia and Toyota Australia. The car sales strips of Albany Highway, Victoria Park and Albany Highway, Cannington are also in my electorate. These strips are littered with dealers who are household names in Perth. My electorate is also the transport hub of WA, and many companies use the suburbs of Kewdale and Welshpool to run their transport and subsidiary companies.

An issue for the manufacturing sector has been controlling job losses, fundamentally caused by improved technology as well as by job restructuring and training in order to work with the new manufacturing tools. The automotive industry operates in an extremely competitive international arena. Pressure has been put on the Australian car manufacturers over the past 20 years to reform to new technology and innovation, to become more flexible with industrial relations practices and to enhance the industry’s position by exporting our cars to overseas markets.

The previous government took steps to address this problem. It provided the automotive industry with certainty in moving towards a low-tariff environment. Under the Howard government’s ACIS program approximately $2.8 billion of transition assistance was provided to the Australian automotive industry between 2001 and 2005. In 2006 some 126,000 vehicles were exported to destinations including the Middle East, the United States, China, South America, South Africa, New Zealand and South-East Asia. Growth in the industry was present in 2006, when domestic automotive manufacturers exported 38 per cent of local production—this compared with only seven per cent of local production exported in 1990. As tariff levels declined, the Howard government helped the industry to compete internationally and to continue to export to foreign markets. In recent times, however, during a world economic downturn, demand for the industry has decreased and growth has declined.

I would like to now talk about the health of the big three car manufacturers in Australia: Ford, Toyota and Holden. Profitability between the three car manufacturers in Australia has been extremely varied over the past 20 years. Let us take Ford Australia for example. Ford entered the Australian car market back in 1904 with the Model T Ford, and 20 years later Ford’s first factory in Geelong was opened to locally manufacture the vehicle. An Australian designed and developed car came in the form of the Falcon in 1960. Since then Ford has been strong competition for other Australian manufacturers, and the Ford versus Holden debate has divided the nation for decades. It is part of the Australian culture. It is part of the fabric of Australia. It is like barracking for teams in the AFL.

I can remember as a young lad travelling to Bathurst in the late seventies to go and watch Moffat and Bond cross the line at Bathurst. I remember the might of the vehicles—Holden versus Ford—travelling down Conrod Straight, up the mountain and across the skyline. Often the trips up there were related directly to the Holden versus Ford debate. I remember a mate of mine, who I have often spoken to about this, Adrian Lawson, from the ‘Magic Men’, used to speak about the Fords and Holdens being rust buckets. That has been brought up recently as well in a state versus state competition for funding between New South Wales and Western Australia, and the Treasurer of Western Australia aptly called the state of New South Wales a rust bucket.

I will return to the subject of the day. Unfortunately, with the downturn in the world economy, Ford’s full-year financial result for 2008-09 was a loss of $274 million with a sales revenue fall of 7.4 per cent. Ford operates two plants, at Broadmeadows and Geelong, in Victoria and has around 4,500 employees and 230 dealers. In 2007 it produced around 68,000 vehicles. Only a small portion of some 5,000 units were exported that year. On 22 August 2008, Ford announced that production would be cut by 25 per cent, with some 350 jobs lost as a result of the downturn in vehicle sales. However, on 24 July 2009, the Australian and Victorian governments announced funding of $42 million would be provided to Ford to produce a new four-cylinder engine version of its Falcon. The catch, unfortunately, is that the engine will be fully imported, and Ford announced at the same time that it would not proceed with its proposed new, locally built Ford Focus plant at Broadmeadows. Although the Rudd government have been somewhat supportive of this motor company, they have in turn cost the Australian economy further job opportunities. It is disappointing that the new plant will not be opening.

GM Holden is a wholly owned subsidiary of the General Motors Corporation. With uncertainty surrounding the future of General Motors as well as the current downturn in vehicle sales, the company was hit particularly hard in recent months. Holden’s vehicle export program began in 1954 when FJ Holdens were shipped to New Zealand. The company has grown dramatically, exporting 36,534 vehicles in 2007, with plans to expand its export program. However, the axing of the Pontiac brand by General Motors had an adverse effect on these plans, as the Commodore was to be exported to the US under this brand. Rather than shedding staff, Holden asked employees to reduce shifts, change working hours, take forced holidays and take an effective pay cut. Its plant at Elizabeth in South Australia is now one of the most flexible automotive operations in the industry—an essential strategy to serve the diverse markets.

See this speech in context