Mitsubishi to Shut Adelaide Plant

[Cruise]

That's what happens when you drop import tariffs to ridiculously low levels

[AtD]

That's what happens when you drop import tariffs to ridiculously low levels

It was an unviable industry that has been propped up at the expense of taxpayers and consumers. The labour can be better used elsewhere.

[Wayno]

unfortunately closing 2-3 years earlier than anticipated. I believe the govt wanted to string Mitsubishi along til Adelaide's defence industry was in full swing...

[ozisnowman]

That's what happens when you drop import tariffs to ridiculously low levels

It was an unviable industry that has been propped up at the expense of taxpayers and consumers. The labour can be better used elsewhere.

Tariffs are like taxes on imported cars!!! They are not like subsides which would have cost taxpayers.
The government reduced import tariffs to give people cheaper cars and more choice.

However its a bit stupid to have a fixed tariff on local built cars... because international tariffs are not fixed. For example if you buy a Hyundai you get a cheap car and pay only 10% import tariff soon to be 5% however if you wanted to export a Holden Commodore or a Mitsubishi 380 etc to Korea you would be paying
an 200% import tariff hence no one in Korea drives a Commodore or 380... Tariffs should hence be floating
and relate to the country your doing business with.

I am all for people having more choice and cheap cars but it shouldnt be at the expense of local jobs for those overseas. If people think it will stop at Mitsubishi they have another thing coming it will also close Holden, Ford and Toyota in 20-30 years time. Toyota have already been complaining that it is not viable.
You cant also look at the carmakers in isolation but also component makers so you will be talking about 50,000 people losing their jobs.

[Edgar]

That's what happens when you drop import tariffs to ridiculously low levels

Isn't that a good thing? We would then continue to buy good quality imports than crap Australian made cars!

Let's face it, if the tariffs were kept high, it is just a suicide decision from the government to create barriers in Australia to protect the locally produced cars with no competitions whatsoever, so much of Australia in its own world.

Gone are those days when big inefficient vehicles rules the road and contributing to emission and global warming.

[Edgar]

Tariffs are like taxes on imported cars!!! They are not like subsides which would have cost taxpayers.
The government reduced import tariffs to give people cheaper cars and more choice.

However its a bit stupid to have a fixed tariff on local built cars... because international tariffs are not fixed. For example if you buy a Hyundai you get a cheap car and pay only 10% import tariff soon to be 5% however if you wanted to export a Holden Commodore or a Mitsubishi 380 etc to Korea you would be paying
an 200% import tariff hence no one in Korea drives a Commodore or 380... Tariffs should hence be floating
and relate to the country your doing business with.

I am all for people having more choice and cheap cars but it shouldnt be at the expense of local jobs for those overseas. If people think it will stop at Mitsubishi they have another thing coming it will also close Holden, Ford and Toyota in 20-30 years time. Toyota have already been complaining that it is not viable.
You cant also look at the carmakers in isolation but also component makers so you will be talking about 50,000 people losing their jobs.

I don't know what fixed import tariffs on locally built cars that you are talking about. If you are talking about export tariffs, I don't know how true your claims are. Because if you go to United Arab Emirates, the price for a brand new VE Commodore is lower than what the price it is sold in Australia, yes, even after converting their currency value to our Australian dollar. And they still shit that nobody even wants to buy them, or if they do, they are just dumping cash to trash the LS2 engines.

Toyota is threatening to close its plant in Melbourne because of our strong Aussie dollar late last year. Why? Because not only are the locally built Camry are being delivered to the local market but were also exported out of the country to places like Middle East etc. So strong Aussie dollar means the eventual total cost in Australia would accumulate the higher exchange rates of other currency values, meaning those countries which import Aussie cars will have to trade more currency in exchange for the high Aussie dollar value.

If you think all this would eventually affect local jobs, then you should put the blame on the local car manufacturer company themselves. It is all about making good cars, finding the markets and build accordingly, and making money at the same time. Not just stick with one production line, example, Holden in Australia, only producing the Commodores line, and I wouldn't be surprise if they eventually shuts.

End of last year we actually witnessed the sales of Corollas coming close to wipe out the Commodores, so it says a lot about the demand in Australia has now shifted into medium hatch and medium sedans, so why, with all the resources and technologies that Australian car manufacturing plants have, failed to produce a locally made medium hatch/sedans? Are they so incapable or just living in denial and hope to live in its own world?

Move on to another local manufacturer Ford, of fear that its plant would eventually shut is because of its ISO standards of management. My uncle is an engineer who had work with Ford before outside of Australia. They have to meet their certain ISO standards in the parts department in which it specifies that they appoint their own parts maker throughout the entire contract, with very limited other resources and suppliers, so if one screws up, they screw up everybody in and around Ford. Unlike other car manufacturers which have very wide resources and suppliers, if one failed, they will go and search for even better suppliers with plenty of resources. It keeps the production cost down and brings down the risk of halting production as an effect of resources of suppliers defects.

[Cruise]

Alot of Asian countries have high import taxes, why?
it means businesses will open factories in their country and create jobs, which people in those jobs pay tax and the tariffs themselves add to the government coffers.

And don't give me the "don't force me to buy Australian crap" routine, im sick of that, why?
What do you all do for a living? can we outsource that to? oh thats alright whenever a business is closed down all those that worked there will just go to the mines when ever this phantom boom takes off.

[Cruise]

How much employment is there down south?

I know in the northern areas there are plenty of jobs

[Edgar]

Alot of Asian countries have high import taxes, why?
it means businesses will open factories in their country and create jobs, which people in those jobs pay tax and the tariffs themselves add to the government coffers.

Wrong! They impose higher import tariffs so to offset the amount of imported cars into the country. For many reasons, the popular ones is to protect the local manufacturers, countries such as Malaysia and China. Secondly, to limit the number of cars on the roads for space confined countries such as Singapore.

Foreign manufacturers outsourced to these little countries because of cheap labour. Now that everyone is moving to China, once the economy lives up, cost goes up, they will shut the plants over there and move to an even cheaper country, India is the next target, if the overall cost in China continues to rise in the next 30-50 years.

And don't give me the "don't force me to buy Australian crap" routine, im sick of that, why?
What do you all do for a living? can we outsource that to? oh thats alright whenever a business is closed down all those that worked there will just go to the mines when ever this phantom boom takes off.

Not all Australian made are craps, some are, but you just don't see it because it is all over you, and you don't get to see what it's like on the world outside of Australia. They are many Australian made that are on par on the international market, but they are also the selected ones that are very conservatively lacking behind the entire world. As a result of lack in competition and pressure, but one cannot monopolise forever, when reality strikes, then you're in trouble.

As evident already in the current market trend of automotive industries in Australia. Failing to cope with the market demand and the pressure of global warming awareness and Holden is nowhere near to producing Hybrids or locally made diesels (besides GM), and 2007 had proved that total sales of Toyota surpassed both the local Holden and Ford combined. Ouch, that hurts, but that's reality, why don't they start producing good quality Corolla-sized vehicles, European-like diesel engines, Toyota-like efficiencies?

They even have to out-source these models of markets from Vauxhall/Opel, Daewoo, in their Barina, Vectra, Epica and Viva. So when they do eventually close down because their one and only line production can't cut the market segment, and everyone losses their job, and what? Blame it on the tariffs?

Even imposing high taxes and tariffs will not stop people from importing cars. As evidence, China and Malaysia, they both impose almost 200% of import tariffs for imported vehicles and you still see them running on the road despite buying a decent European luxury car may cost the amount of purchasing 2 brand new houses (yes, that is how high we are paying!).

[Wayno]

mitsubishi is officially outa here...and we'll get to see Media Mike on the news tonight...wonder if he can quickly invent some use for the Tonsley site? panels for warships perhaps?

[MGR]

I dare say some of those employees will have been hit by the intrest rate rise today too! poor buggers

[crawf]

Get ready for a showdown

Apparently Rann (and the Federal Government) is livid over the decision, and looks like it will be chasing the money it put towards the Mitsubishi plant.

This isn't just going to effect the Manufacturing industry in Adelaide, but all over the country.

[rev]

Stop blaming tarrifs and the like for the demise of Mitsubishi Australia.
The company has had major problems for years. Higher tariffs would have only delayed the inevitable shut down.

Hopefully these 1,000 people can be retrained for the defence or mining industries and retained in this state. We already have a shortage of skilled labour.

[Will]

For those of you arguing against tariffs, I am slightly confused. Isn't it better to keep Australians in jobs, than give consumers cheaper cars?

How exactly is losing thousands of manufacturing jobs good for the economy?

[Wayno]

<snip>
How exactly is losing thousands of manufacturing jobs good for the economy?

With my Economist hat on: Any economy has it's value defined by the sum of the activities occurring within it. Migrating people away from "lower level" jobs (such as manufacturing) to "higher level" positions (service industry, trade, R&D initiatives, etc) results in a stronger economy to the benefit of all. However, progress is not always linear (as we know)

With my Economist hat off: there will be many ex-mitsubishi staff who won't be able to make the leap to a "higher level" position and for them i feel truly sorry. Social stability is of paramount importance and underpins all our lives. I hope they find new employment quickly

By the way, i believe the australian car industry was instituted immediately following WWII because we could not rely on the rapid and cheap supply of vehicles from anywhere else in the world - how the world has changed...