Contributed by Jim Hayes
American car giant General Motors has said that it will put an end to the Holden brand by the end of this year. This comes after years of down scaling operations in Australia. This latest move means, that cars suitable for Australian roads will no longer be made.
Prime Minister Scott Morrison has blasted the company for it. This is all very well. But what is he going to do about it? This is what Australia wants to know.
General Motors’ move should be no surprise. It is the culmination of a period that has seen the dismantling of the Australian car industry. Ford and Toyota went, after a host of other makers, which had set up shop in the the 1950’s and 1960’s.
General Motors began to make cars in Australia in 2949.
The fall of the car industry has had a devastating effect on the across the whole manufacturing industry. Car production became its beating heart. Without it, the nation’s manufacturing base has almost gone. And the jobs have gone along with it.
Something has been terribly wrong had been there all along. Initially it was that these companies often came to feast at the gravy train of government handouts, and the industry did not grow according to Australia’s conditions and needs. Trouble was always going to come.
Take General Motors. As the small book (The Golden Holden), which came out in the early says revealed, the company invested a million and raised another three million from the government, and more through Australian shareholders. It used the money to buy up the Adelaide based Holden, bought up all the shares, and turned General Motors Holden into a private company and skimmed off all the profit from thereon.
Threats of closure were periodically used to blackmail the government of the day, into providing millions of dollars of further handouts.
In this way, General Motor’s operation in Australia had been built and maintained with Australian money and the effort of thousands of workers. Very little was contributed by the owners. They paid virtually no tax, while they skimmed off all the profit. Very little of which, was ever re-invested in Australia.
Governments that came and went during these years, did nothing to change this cosy arrangement. On the contrary. They happily played along with the game. The last payout began in 2013, when General Motors was given a staggering $2.17 billion, to be passed on over 12 years.
Australia would still be paying this, if Tony Abbott had not turned off the tap. General motors responded to the ending of the gravy train by shutting its doors on Australian production in 2017.
Abbott’s failure was not to end the handout. it was that no alternative was put forward to maintain production and jobs.
A government not prepared to act and take the necessary steps, sounds somewhat insincere when it complains. This is Scott Morrison’s position today.
What can he do?
For a start, insist that money previously handed over, for the purpose of maintaining operations in Australia, be returned. He could ensure an immediate and thorough investigation of the company’s past tax payments. Its assets should be frozen, and confiscated, should it be found to have acted improperly.
In the event of such a recovery, it should be used to help in the building a new industry, suitable to the needs of Australia, and which focuses on manufacturing vehicles that used new environment friendly technologies. The iconic Holden name can be rescued.
Such a plan is needed, even if there is no recovery from General Motors. It would revitalise the Australian manufacturing industry, through the rise of an extensive local supply chain. The know-how and capacity to do this exists. All that’s missing is the will.
A prime minister with the guts to take these steps would leave a legacy.
But don’t hold your breath. This is not Scott Morrison’s style.