SlickHolden
09-21-2005, 02:35 PM
Part 1
GM boss sees a tough road ahead for Aussie auto sector
By NEIL McDONALD 21 September 2005
AUSTRALIA’S automotive industry faces a tough future as global competitive pressures impact on car and components manufacturers, according to General Motors chairman and chief executive officer, Rick Wagoner.
Speaking to GoAuto in Frankfurt last week, the boss of the world’s largest auto-maker hit out at the Australian government’s policy of reducing trade barriers, which he said was "putting domestic manufacturing under a lot of pressure".
However, Mr Wagoner ruled out a further review of Holden’s operations in the face of declining market share and increasing competition from imports.
Last month, Holden announced it would axe 1400 jobs at its Elizabeth plant in Adelaide. It also revised downwards its production forecasts.
"We’ve announced that we’re going to move on the third shift – I think that’s all we’re talking about right now," Mr Wagoner told GoAuto.
"I wouldn’t say anything any more significant than that. We’ve looked at the issue of the competitiveness of the Australian supply base."
Holden has already dumped some Australian suppliers for next year’s VE Commodore, moving component sourcing offshore to countries including Thailand and China.
Industry estimates suggest the VE Commodore will have the lowest percentage of Australian-sourced components of any of the four Australian-built vehicles.
Mr Wagoner said the supply base traditionally came under pressure first "because it’s easier to ship in supplies than whole vehicles".
"Right now we think that with the product configuration we have and the ideas we have about using more global platforms ... that’s going to help the manufacturing base stay more competitive," he said.
"But over time the economic realities are going to play out and I have some concerns that a policy which will over time reduce to a miniscule level or eliminate barriers to trade or duties are going to put domestic manufacturing under a lot of pressure."
Mr Wagoner conceded that Holden had suffered setbacks after "four or five years of prosperity" and that he was concerned about its future. He said it needed to stay ahead of the cost issue.
"I think it’s an issue that we confront in all the developed markets," he said. "There has been a policy, which is understandable from the government’s perspective, to continue to reduce duties.
"But let’s face it. While there has been unbelievably dynamic growth in the Australian market, it’s still, on a global scale, relatively small.
"So without duty protection and a very strong Australian dollar, which is likely to continue, it makes domestic manufacturing there under greater and greater competitive pressure."
Once heralded as a saviour, globalisation was singled out as one of the reasons for the added pressure on each car-maker’s capacity in individual markets.
"On the other hand, cars are big and bulky things and to the extent that you can assemble them near the markets they are sold you don’t always have to have the lowest per-hour labour costs," Mr Wagoner said.
Pulling strings: Rick Wagoner unveils Holden’s global V6 engine in 2003 with former Holden chief Peter Hanenberger (centre) and Industry Minister Ian Macfarlane (right).
If manufacturers like GM can continue to drive efficiencies, he believes car assembly in developed countries like Australia could continue.
To do so, Holden would need to "get a little bit more edge" in its cost competitiveness because its exports markets "while they like the product" had price points that were too high, Mr Wagoner said.
Holden was at the forefront of trying to become more efficient and improve its competitiveness "to make sure we’ve got the right sourcing footprint, but over time we’re going to have to watch that", he said......
GM boss sees a tough road ahead for Aussie auto sector
By NEIL McDONALD 21 September 2005
AUSTRALIA’S automotive industry faces a tough future as global competitive pressures impact on car and components manufacturers, according to General Motors chairman and chief executive officer, Rick Wagoner.
Speaking to GoAuto in Frankfurt last week, the boss of the world’s largest auto-maker hit out at the Australian government’s policy of reducing trade barriers, which he said was "putting domestic manufacturing under a lot of pressure".
However, Mr Wagoner ruled out a further review of Holden’s operations in the face of declining market share and increasing competition from imports.
Last month, Holden announced it would axe 1400 jobs at its Elizabeth plant in Adelaide. It also revised downwards its production forecasts.
"We’ve announced that we’re going to move on the third shift – I think that’s all we’re talking about right now," Mr Wagoner told GoAuto.
"I wouldn’t say anything any more significant than that. We’ve looked at the issue of the competitiveness of the Australian supply base."
Holden has already dumped some Australian suppliers for next year’s VE Commodore, moving component sourcing offshore to countries including Thailand and China.
Industry estimates suggest the VE Commodore will have the lowest percentage of Australian-sourced components of any of the four Australian-built vehicles.
Mr Wagoner said the supply base traditionally came under pressure first "because it’s easier to ship in supplies than whole vehicles".
"Right now we think that with the product configuration we have and the ideas we have about using more global platforms ... that’s going to help the manufacturing base stay more competitive," he said.
"But over time the economic realities are going to play out and I have some concerns that a policy which will over time reduce to a miniscule level or eliminate barriers to trade or duties are going to put domestic manufacturing under a lot of pressure."
Mr Wagoner conceded that Holden had suffered setbacks after "four or five years of prosperity" and that he was concerned about its future. He said it needed to stay ahead of the cost issue.
"I think it’s an issue that we confront in all the developed markets," he said. "There has been a policy, which is understandable from the government’s perspective, to continue to reduce duties.
"But let’s face it. While there has been unbelievably dynamic growth in the Australian market, it’s still, on a global scale, relatively small.
"So without duty protection and a very strong Australian dollar, which is likely to continue, it makes domestic manufacturing there under greater and greater competitive pressure."
Once heralded as a saviour, globalisation was singled out as one of the reasons for the added pressure on each car-maker’s capacity in individual markets.
"On the other hand, cars are big and bulky things and to the extent that you can assemble them near the markets they are sold you don’t always have to have the lowest per-hour labour costs," Mr Wagoner said.
Pulling strings: Rick Wagoner unveils Holden’s global V6 engine in 2003 with former Holden chief Peter Hanenberger (centre) and Industry Minister Ian Macfarlane (right).
If manufacturers like GM can continue to drive efficiencies, he believes car assembly in developed countries like Australia could continue.
To do so, Holden would need to "get a little bit more edge" in its cost competitiveness because its exports markets "while they like the product" had price points that were too high, Mr Wagoner said.
Holden was at the forefront of trying to become more efficient and improve its competitiveness "to make sure we’ve got the right sourcing footprint, but over time we’re going to have to watch that", he said......