Another one bites the dust

[DavidAU]

Ford Australia annouced today that they are closing all the Ford manufacturing plants in Australia by 2016

They have been manufacturing cars here since 1925 but they say it is now 4 times cheaper to make cars in Asia.

A sad day indeed however thats what happens when governments keep want a bigger piece of the pie with their charges and

wages keep getting pushed higher & higher.

[1939_Buick]

Here is Australia it is the add on's the basic hourly wage that soon adds up: annual leave, annual leave loading, statutory/public holidays, sick days, overtimes rates, allowances(for a wide range of things), superannuation, payroll tax, workcover(workers compensation), rostered days offs, training levies, long service leave, maternity leave, and more. Do not have these in Asia and less in most of the western world.

Edit

http://www.abc.net.au/news/2013-05-23/ford-to-close-geelong-and-broadmeadows-plants/4707960

http://www.news.com.au/business/companies/ford-workers-fear-for-their-futures-after-decision-to-shut-down-geelong-and-broadmeadows-factories-in-2016/story-fnda1bsz-1226648895882

Edited May 23, 2013 by 1939_buick
added more as post 3 & newspater links (see edit history)

[danhar1960]

As a die hard Holden man, it saddens me to hear of this today.

You are spot on Allan in what you say. Had the same conversation over the years with some of my blokes that think they are hard done by.

4 weeks holiday pay with 17.5% loading, 2 weeks in public holidays, 10 days sick pay, 9%+ superannuation, unreal workers comp, and on and on... and you haven't even picked a tool up yet.

Business is doing well, the boss is a greedy bastard, business not doing so well, incompetent management.

And then we wonder why jobs are going north.

Danny

[Ben Bruce aka First Born]

Sorry to hear that, guys. We [workers] are often our own worst enemies. Sad.

Ben

[Rusty_OToole]

I heard that at one time the Big 3 in Australia were Holden, Ford and British Leyland. But British Leyland was put out of business by a strike in 1976 or 77.

When a reporter asked the head of the auto workers' union " How could it possibly be in the interest of your members to put a third of the auto industry out of business?" he replied "can you imagine the power this will give us over Holden and Ford?"

But in fact it lessened their power. The Japanese had been trying to get into the Australian market for 10 years but never made much headway because they had to build up a dealer network from scratch. Suddenly hundreds of dealers had nothing to sell. The Japanese went from 10% to 30% of the market overnight.

Can anyone confirm or correct this?

[hchris]

I heard that at one time the Big 3 in Australia were Holden, Ford and British Leyland. But British Leyland was put out of business by a strike in 1976 or 77.

When a reporter asked the head of the auto workers' union " How could it possibly be in the interest of your members to put a third of the auto industry out of business?" he replied "can you imagine the power this will give us over Holden and Ford?"

But in fact it lessened their power. The Japanese had been trying to get into the Australian market for 10 years but never made much headway because they had to build up a dealer network from scratch. Suddenly hundreds of dealers had nothing to sell. The Japanese went from 10% to 30% of the market overnight.

Can anyone confirm or correct this?

Whist I cant confirm the percentages, there is no doubt that the Japanese numbers increased significantly in a very short time frame; no different to anywhere else for that matter. The sad fact for most of our auto industry manufacturing is that the Japanese (and now Asia in general) simply do it better, not helped by our the scale of economy of course.

[Rusty_OToole]

In Canada it took quite a few years for the Japanese to make their mark. I believe they started selling in 1958 - 1960 on the west coast. Here in Ontario we got our first Japanese dealers in about 1966. I remember the Isuzu Bellel or Bellet as being the first, soon followed by Toyota and Datsun (not Nissan). They never made much headway until the first fuel crisis in the early seventies, even then it seemed only young people bought Japanese cars. It took 20 years for their original motorcycle and car customers to grow up, before they were really mainstream. A long time before they took over 10% market share.

[1939_Buick]

from 2013

 

On 23/05/2013 at 7:38 PM, DavidAU said:

Ford Australia announced today that they are closing all the Ford manufacturing plants in Australia by 2016

They have been manufacturing cars here since 1925 but they say it is now 4 times cheaper to make cars in Asia.

A sad day indeed however that's what happens when governments keep want a bigger piece of the pie with their charges and

wages keep getting pushed higher & higher.

 

Update 2016

Ford Australia shut down production on Friday 7 Oct 2016

http://www.abc.net.au/news/2016-10-07/timeline-ford-australia-ceases-production/7911742

 

http://www.abc.net.au/news/2016-10-07/ford-closes-its-australian-factories-after-more-than-90-years/7909836

http://www.smh.com.au/business/workplace-relations/ford-is-officially-finished-as-600-workers-are-left-unemployed-20161007-grx73y.html

 

Quote

The last 10 cars to roll off the assembly line on Friday morning mark the long-awaited end of the company's 91 years of manufacturing cars in Australia.

 

Edited October 9, 2016 by 1939_Buick (see edit history)

[Mark Gregory]

Rusty_OToole I remember those days in the mid sixties and Japanese cars in Ontario . I had a friend who worked at the local Ford dealership parts counter and someone called in asking for Japanese car parts . His reply was " Sorry sir we do not stock Bamboo " What a difference 50 years makes .

[bob staehle]

what a shame

[kings32]

But also we  did a tour for one GM plant , look in the parking lot  Half the workers where driving other cars than what they built .   Kngs32

[Joe in Canada]

On ‎23‎/‎05‎/‎2013 at 5:38 AM, DavidAU said:

Ford Australia annouced today that they are closing all the Ford manufacturing plants in Australia by 2016

They have been manufacturing cars here since 1925 but they say it is now 4 times cheaper to make cars in Asia.

A sad day indeed however thats what happens when governments keep want a bigger piece of the pie with their charges and

wages keep getting pushed higher & higher.

 Great does that mean that they are going to reduce the price four times cheaper. I bought a pressure switch for our washer that is all plastic marked made in Mexico. Paid $92. so I figure those Mexicans must be getting paid very well charging those prices. I better quit as I am getting political. 

[Guest Skyking]

31 minutes ago, kings32 said:

But also we  did a tour for one GM plant , look in the parking lot  Half the workers where driving other cars than what they built .   Kngs32

 

I have a close friend that worked for Chrysler tell me when the help came to work in foreign cars Lee Iacocca made them park in the furthest parking lot they had.

[padgett]

At the Rouge plant about a month ago, was told the closest employee parking lot was for Fords only.

Remember Mexico is part of NAFTA so same as us.

[John_S_in_Penna]

5 hours ago, Joe in Canada said:

 Great does that mean that they are going to reduce the price four times cheaper. ...

 

I've looked at older U. S. products of various types.

When they were well made, they were

also expensive in relative terms.  For example, an

AM console radio in the late 1920's or early 1930's

came in a beautiful wood cabinet, as a piece of furniture.

It wouldn't be unusual to pay $129 plus tubes for that radio then.

(And that price was for a typical unit, not at all the most deluxe.)

It required periodic service, and that cost is the equivalent

of perhaps U.S. $1300 to $1800 in today's money.

 

Would anyone today pay $1300 for a beautiful radio?

Probably not.  Similar figures could be presented for

appliances that were so well made that they lasted a lifetime.

So I believe that every consumer's insatiable desire

for low price has led to lower quality, cheaper construction,

shorter product lifespans, more plastic, poor service by store clerks, 

and more offshore manufacturing in underdeveloped nations.  

 

Just putting some things in interesting historical perspective---

 

[Spinneyhill]

Our TV news report on Friday said every car contained at least $7000 of taxpayers money in subsidies.

 

NZ's car assembly industry fell over in about 1997 within a month or so of the government announcing they would reduce the tariffs on imported cars to zero. If my rubbish memory serves me correctly I believe it was something like a 45% tariff on some vehicles. The dealers creamed it for a while and consumers were ultimately very happy but not the workers of course.

[EmTee]

7 hours ago, John_S_in_Penna said:

...Would anyone today pay $1300 for a beautiful radio?

Probably not.  Similar figures could be presented for

appliances that were so well made that they lasted a lifetime.

So I believe that every consumer's insatiable desire

for low price has led to lower quality, cheaper construction,

shorter product lifespans, more plastic, poor service by store clerks...

 

Of course, the answer is 'no'.  Whether it's a new $30K Toyota Camry or a an I Phone 7, people do not actually buy anything anymore -- it is leased, or otherwise financed.  This then hides the immediate economic impact of such behavior.  It further perpetuates the feeling of personal entitlement that everyone must have the best and latest version of [insert product here].  This also means that there's no point in servicing/repairing something that the majority of people no longer want or care about...

[C Carl]

Hmmmm , I suppose some of those "Beautiful radios" if still in original and operating condition could be "worth" more than that. Or might have been. I understand that collecting old radios is experiencing a downturn in value. Since we are all history buffs to some degree by definition , let me recommend a bit of history to those few of you who have not seen it. Radio reminds me of the fascinating Ken Burns documentary "Empire of the Air". Must see , guys. Development of radio , with the interwoven theme of the patent battle between the genius Armstrong , and the tinkerer DeForrest. Cut a little close to the bone for me , I actually cried !

 

Stopped by a UAW Union Hall on US 30 in Iowa while exploring  parts of the old Lincoln Highway. Threw a few bones in the kitty. I was driving back to Seattle in my '76 Cad droptop after the Centenial G.N. in 2002. Infused with the spirit of the once mighty Detroit City , of course. I was attracted to the "segregated" parking. Seperate was definitely not equal there. Furrin' scrap was shown obvious disrespect and kept at a distance. We agreed that part of the problem lies with what happens when bean counters take over from the engineers when running state of the art industrial companies. Of course , part of the problem here is that the USA was pretty much the only game in town after the war. A kid starting out as an appliance  repairman , or Boeing draftsman , (me) , could make enough money to start a family. If the ol' lady sold shoes at Nordstrom , (Trudi) , so much the better. You could even buy a house ! Well , we are no longer the only game in town. If we don't have a healthy , well educated workforce around here , you can kiss more of the game goodbye. We old guys are incredibly lucky to have lived in a real "sweet spot" in history.  - Carl

Edited October 9, 2016 by C Carl
Correct spelling error (see edit history)

[Guest shinyhubcap]

Ford most certainly did not "bite the dust".   It is simply doing what is best for its stock-holders and senior executives.  Isnt "free trade" glorious?   Of course some cynics like me remember economic history.   Italy, Germany & Japan came out of the 2nd World War with their plants in ruins,  much of their skilled work-force dead.   Their economists recognized the obvious,  so all three adopted a very simple economic policy that worked, and that China copied. "YOU WANT TO SELL IT HERE....THEN YOU HAVE TO BUILD IT HERE". 

Of course we have been "educated" by the "politically correct" to think that tarrifs, import duties, are a "bad thing".  They sure are!  TO some people !  After all, if you want to gobble up the capital of the middle class, best thing to do is put them out of work.

"free-trade" is working.  All over the planet, investors are moving what were middle class jobs to the cheapest labor, the most dismal safety standards.

Anyone wonder where our machine tool industry went and why ?  Its called "free trade".  Anyone wonder why General Motors is taking advantage of the present "free-trade" concept, and importing Buicks made in China...?  It's called "free trade".

[mike6024]

This is an interesting discussion. Detroit manufacturing being sent to China. The auto body parts supply warehouse near where I live receives many containers from China with hoods, fenders, bumpers covers, and etc, for cars, trucks, Fords, GM, Honda, Toyota. "Chrome plated" plastic stuff.

 

But it is also interesting that foreign manufacturers have assembly plants in the US. BMW, Mercedes, Toyota, Honda. When Mercedes first decided they wanted to assemble their then new SUV in the US they expressed shock at the lack of college technical training on the basics of setting up and using assembly line robotic equipment. And they said that part of their cost to more here would be to provide a training program of their own creation, one that back in Germany would be at a technical college.

 

http://www.mbusi.com/factory

 

MERCEDES MANUFACTURING EXCELLENCE IN ALABAMA!

Welcome to Tuscaloosa County, Alabama, U.S.A., and the manufacturing facility where the GLE SUV,  GL SUV,  C-Class and the GLE Coupe are built. Everything is under one roof… from Body, Paint, and Assembly shops to Administration and Shipping. This unity helps to emphasize the importance of teamwork and to foster Team Member communication and facilitate the consistent, incomparable quality inherent in manufacture of a Mercedes-Benz vehicle.

Each model is built "just-in-time," a manufacturing method based on the idea that stockpiling large amounts of inventory is not only inefficient but unnecessary. In fact, in the assembly shop, the target is to have only 2 hours worth of inventory stocked (approximately 3 hours in the body shop) at any given time for the production line. When additional inventory is needed, our automated system places an order for replenishment and it's delivered almost immediately.

The manufacturing process for both models begins in the Body Shop where the components that comprise the metal body are welded together. Then, from the ultra-clean Paint Shop, the painted body finishes its journey in Assembly where it becomes a new Mercedes-Benz GLE, GL, C-Class and/or GLE Coupe and are ready for shipping. From beginning to end, our Mercedes-Benz vehicles are created with style, functionality, and quality in mind.

 

BMW also makes their SUV's in the US 

 

https://www.bmwusfactory.com/manufacturing/production-overview/

 

BMW Manufacturing employs 8,000 people to produce the X3 and X5 Sports Activity Vehicle and the X4 and X6 Sports Activity Coupe. The 1,150-acre, 5-million-square-foot campus generates its own power, offers an on-site Family Health Center and provides 24-hour security and firefighting personnel. To date, BMW has invested over $7 billion in its South Carolina operations.

 

Honda, 12 plants in the US - http://hondainamerica.com/

Our Perspective: The Role of Free Trade in Enabling Honda’s Success in America

Honda's 12th state-of-the-art manufacturing facility opened in Marysville, Ohio, in 2016 to produce the Acura NSX—the only supercar produced in America. 

 

 

My 2002 Toyota pickup was assembled in Fremont, California, at the GM/Toyota joint venture plant. That ended during the 2008/2010 recession with the UAW not wanting to make concessions and Toyota wanting out.

[Joe in Canada]

GM had a truck plant in Oshawa Canada that had the highest JD Powers quality ratings years running. Then about nine years ago GM moved the plant to Mexico that was a complete surprise to the workers there. No one ever expected GM to shut down the plant with that production record so I guess profit is over quality. I believe Toyota builds more cars in Canada than GM does to-day.

[Joe in Canada]

21 hours ago, John_S_in_Penna said:

 

I've looked at older U. S. products of various types.

When they were well made, they were

also expensive in relative terms.  For example, an

AM console radio in the late 1920's or early 1930's

came in a beautiful wood cabinet, as a piece of furniture.

It wouldn't be unusual to pay $129 plus tubes for that radio then.

(And that price was for a typical unit, not at all the most deluxe.)

It required periodic service, and that cost is the equivalent

of perhaps U.S. $1300 to $1800 in today's money.

 

Would anyone today pay $1300 for a beautiful radio?

Probably not.  Similar figures could be presented for

appliances that were so well made that they lasted a lifetime.

So I believe that every consumer's insatiable desire

for low price has led to lower quality, cheaper construction,

shorter product lifespans, more plastic, poor service by store clerks, 

and more offshore manufacturing in underdeveloped nations.  

 

Just putting some things in interesting historical perspective---

 

A friend has a manufacturing facility for sporting goods. He was contacted by one of his major outlets that they were not getting enough resale's through breakage.  He was forced to weaken the product or they would stop carrying it.

 As for cars I do not believe the same way of thinking as your every day goods. You do not see the rusty car body's like you seen in the 60s as much and the cars of to-day seem to run longer. I had a 1965 Chevy Impala that in 1972 developed a heavy thud going over a bump. Found the frame had rotted off behind the rear wheels. That was only a seven year old car. I hate to say it but I think we can thank the imports for that.  

 

Edited October 10, 2016 by Joe in Canada (see edit history)

[John_S_in_Penna]

10 hours ago, Joe in Canada said:

A friend has a manufacturing facility for sporting goods. He was contacted by one of his major outlets that they were not getting enough resales through breakage.  He was forced to weaken the product or they would stop carrying it.

 

Wow, that speaks volumes about that store's morality.

Your friend should have stood on principle and on the

side of the consumer.

 

Interestingly, the word "integrity" has two meanings.

The word relates to wholeness, of remaining one.

One meaning relates to ethical and moral wholeness.

The other relates to physical wholeness, of withstanding

physical wear and abuse and still remaining in one piece.

Those two definitions are inextricably related.

I maintain that if one has ethical integrity, he and his

product will remain in one piece.

 

Hope this isn't too deep for early morning!  We need

products that last.

Edited October 10, 2016 by John_S_in_Penna (see edit history)

[Xander Wildeisen]

I have been reading this topic, and it is very clear that a lot of you guys have a ton of knowledge about the manufacturing side of the cars. So it makes me wonder, what if some one, or a company wanted to start building cars. Aside from start up costs, what problems would they run into just trying to operate in the market as far as rules and regulations go. Not counting being stabbed in the back at every turn. Would it be possible in this country any more to start from scratch building cars?

[28 Chrysler]

Read up on Tesla. They had it a bit easier because they are battery operated.

When you build the first handful of cars  the gov. testing gets expensive.

[Xander Wildeisen]

 I know the cost would be off the chart, Just wondering if we have made it impossible due to our rules. Just because you throw money at something, does not mean it will go anywhere.

[Rusty_OToole]

2 hours ago, Xander Wildeisen said:

I have been reading this topic, and it is very clear that a lot of you guys have a ton of knowledge about the manufacturing side of the cars. So it makes me wonder, what if some one, or a company wanted to start building cars. Aside from start up costs, what problems would they run into just trying to operate in the market as far as rules and regulations go. Not counting being stabbed in the back at every turn. Would it be possible in this country any more to start from scratch building cars?

The big problem is the established manufacturers have spent 50 to 100 years and billions of dollars building up manufacturing facilities, dealer and service networks, and a customer base. Any new comer has all that to do, and it is expensive in time and money. Study the new car companies that sprang up after WW2 like Tucker and Kaiser - Frazer. They had a problem doing all that, building a car the public wanted, selling it at a competitive price, and making enough money to stay in business.

 

The big problem basically was that the country had plenty of car production capacity and there was no need for more. Any new competitor had a severe up hill battle to take market share away from established makers. Since there was no unfilled demand.

 

The only European companies I know of that started making cars after WW2 and are still in business are Lamborghini Porsche and Ferrari. Exotic sports cars that sold for at least twice as much money as other cars but stayed in business by selling small numbers of cars to rich connoisseurs.

 

Then there are the Japanese companies. They had a wide open domestic market to fill, protected by import duties and their exports  were subsidized and encouraged by their government as part of a national economic strategy.

 

Tesla is a combination of the two, an exotic car sold in limited numbers to connoisseurs and heavily subsidized by the government.

 

It might be possible to make a small number of very expensive exotic cars before you went broke if you had plenty of money to start. But seriously, unless you have massive subsidies your odds are not good. Even then, Tesla is only going to get subsidies as long as it is politically  fashionable for them to do so. For example if Trump gets elected you can expect the Tesla gravy train to be cut off and Tesla to be taken over by one of the majors.

 

 

[Joe in Canada]

Then if you want to sell your car abroad it will have to be built to there standards also and then redesigning parts again to their specification.

[Xander Wildeisen]

In a way, is the aftermarket, restoration, custom, street rod, hot rod, rat rod, resto rod, pro street, pro touring, car shops and classic car dealers. The same thing? The last group of independent car makers and dealers out there? When you look at our hobby/industry it is very large. Any one know how many classic car dealers there are? How many custom car shops there are? 

[Larry Schramm]

Today besides the amount of capital start up costs which I would bet eats up 1/2 the price of a car it is the myriad of regulations in all of the countries around the world.

 

Example 1. Last time I sat in a meeting talking about rear view door mirrors there were 13 different optical center requirements for countries around the world that we talked about.  Every one of those required a different part number and if the wrong mirror was installed on a car going to a country, it could be subject to recall to be replaced.  Simple example.

 

On the capital requirements, If a die (tooling costs) to stamp a fender cost $1million and you build 1 car, the capital cost it $1million for that fender.  If you build/stamp 100,000 fenders, then the capital cost that goes into the car is $10.00/vehicle. If you build 1million cars, then the capital cost is $1.00/vehicle. 

 

Remember that we are only talking of one fender, not the maybe 10,000 - 20,000 or more parts that go into a vehicle

 

In todays huge number of cars with lower runs the capital- depreciation cost for tooling is higher than years ago when 1million run vehicles was more the norm.

[39BuickEight]

Completely overboard regulations disguised as "consumer protection" has made the notion of an individual creating new consumer products virtually impossible.  New small business has no chance thanks to lawyers and big government.  I digress...

[8E45E]

On ‎09‎/‎10‎/‎2016 at 7:07 AM, C Carl said:

Hmmmm , I suppose some of those "Beautiful radios" if still in original and operating condition could be "worth" more than that. Or might have been. I understand that collecting old radios is experiencing a downturn in value.

That is because there is almost NOTHING worth listening to on AM (or 'BC' as those older sets used to read on the selector.) anymore!!  The entire broadcast radio market has gone wholeheartedly to the FM dial.  And shortwave has no reason to be around anymore with satellite radio, so a beautiful vintage radio is not a lot more than a nice conversation piece these days.  I believe it was 1948 when a very few sets started to offer FM, and even then, it took years for Frequency Modulation to catch on over Amplitude Modulation.

 

Craig

Edited October 19, 2016 by 8E45E (see edit history)

[8E45E]

On ‎10‎/‎10‎/‎2016 at 0:30 PM, Rusty_OToole said:

Tesla is a combination of the two, an exotic car sold in limited numbers to connoisseurs and heavily subsidized by the government.

 

For example if Trump gets elected you can expect the Tesla gravy train to be cut off and Tesla to be taken over by one of the majors.

If that happens, maybe Apple will buy them. 

 

Craig

 

[8E45E]

12 hours ago, Larry Schramm said:

Today besides the amount of capital start up costs which I would bet eats up 1/2 the price of a car it is the myriad of regulations in all of the countries around the world.

 

On the capital requirements, If a die (tooling costs) to stamp a fender cost $1million and you build 1 car, the capital cost it $1million for that fender.  If you build/stamp 100,000 fenders, then the capital cost that goes into the car is $10.00/vehicle. If you build 1million cars, then the capital cost is $1.00/vehicle. 

 

In todays huge number of cars with lower runs the capital- depreciation cost for tooling is higher than years ago when 1million run vehicles was more the norm.

That is the prime reason design cycles have gotten way longer than the common 3-5 years in the 1960's when one expected a significant major redesign, and annual minor redesigns that were different enough from the previous year's model.  With some models, it can take up to ten years or more to produce a million examples.   Even Rolls Royce has not done a major redesign to its Phantom line since it was introduced in 2003.

 

Craig.

[Xander Wildeisen]

Larry Schramm, thank you for the post. I get the cost on the fender example. The mirror example seems to "reflect" a problem. Are the different requirements really needed? Or are they there because we as a country at some time, we stuck it to them in some way. And then in turn, the foreign country sticks it to us. By saying if you want to sell that here, we require blank, blank, blank. Not being an expert in mirrors, are the objects closer then they appear, even closer around the world? I am just guessing that headlight requirements are up there as well.

[padgett]

Back in the day, rust was a real problem and "rustproofing" shops like Ziebart were in their hayday  Undercoating was a big profit maker for dealers.

 

Of course now I live where rust is not (warm, no salt 60 miles from the ocean or gulf) but cars were still rusting at the end of the century and may just be too new today).

 

Also remember in 1970 a three year old car was ready for the scrap yard and at 100,000 miles was "all done". Today only two of my six are under 100k.

 

So machining and alloys are much better today and that is the biggest difference.

 

BTW AFAIR the labor to assemble a car is much less than the cost of the parts or overhead.

[8E45E]

37 minutes ago, Xander Wildeisen said:

Larry Schramm, thank you for the post. I get the cost on the fender example. The mirror example seems to "reflect" a problem. Are the different requirements really needed? Or are they there because we as a country at some time, we stuck it to them in some way. And then in turn, the foreign country sticks it to us. By saying if you want to sell that here, we require blank, blank, blank. Not being an expert in mirrors, are the objects closer then they appear, even closer around the world? I am just guessing that headlight requirements are up there as well.

I know Japan is very stringent on those mirrors, and appear on the leading edge of the front fenders.  And their vans all have a mirror above the tailgate window angled down so one can see immediately below the bumper, not unlike what one sees here on a motorhome.  Of course, the backup camera has probably replaced that one.

 

Craig

[Restorer32]

The US is rapidly catching up with over regulation. I am an elected official in a very small PA town. By federal law we now have to hire a company to measure the reflectivity of every street and traffic sign in our town on a regular basis. Any sign that isn't reflective enough must be replaced, regardless of condition. $14k is a lot of money for a town with a total annual budget of less than $300k. We are regulating ourselves to death.