Monday, October 28, 2013

Imperialism shapes the Australian economy in its own interests - the people resist

Vanguard November 2013 p. 6
Ned K.

In October this year, Toyota announced sackings of 100 workers. The reason given was that its export orders to the Middle East have declined. Toyota is by far the largest exporter of vehicles from Australia compared to General Motors and Ford.

Only a week before the latest sackings in the car industry were announced, the new Liberal Government Minister Ian MacFarlane said that any further government assistance to the car manufacturers had to be on the condition that they can export a high percentage of the cars they produce here.

Allan Kohler in the Business Spectator section of The Australian on Thursday 17 October demonstrated that the Middle East is one of the few areas in the world where there are no tariffs in place on imported cars, and this is why so many companies like Toyota attempt to export cars there.

He points out that the growth markets for car sales are in the short to medium term in Asia, but this is where tariffs and barriers to imported cars are the highest, despite a variety of so-called ‘free trade’ arrangements.

So Ian MacFarlane’s condition of high export focus before any commitment to further funding of the car industry here is virtually the death of the industry here so long as the industry remains in the hands of the multinational car companies and large component suppliers.

Government pours in the dollars, car multinationals continue to cut jobs and destroy the locally based car industry

It is quite staggering the amount of government financial assistance to the car multinationals, even in recent years, let alone since they set up in Australia around World War 2 and after.

(And this has become part of a global pattern as the giant multinational car companies play national governments off against each other: at the end of September Ford succeeded in extorting $70.9 million from the Ontario provincial government, and $71.6 million from the Canadian federal government to upgrade its Oakville assembly plant.)
Gideon Haigh, better known for his writing on the imperialist originated game of cricket, has written an excellent book, End Of The Road? on the car industry in Australia which exposes the staggering amounts of money handed to these multinationals with no conditions of government control or ownership attached.
For example General Motors received the following amounts of money from the tax-payers between 1 January 2001 and 31 December 2012:

$2,174,947,531 under various restructuring schemes –

         Automotive Competitive and Investment Scheme (ACIS) - $1,503,038,035

         Automotive Transformation Scheme from 2011 - $150,008,171

        Green Car Innovation Fund (GCIF) FROM 2008 - $188,817,598

This year more money was thrown at General Motors and more promised by both federal and state governments as General Motors sacked 500 workers, forced reduction in real wages and conditions of workers in a new Enterprise Agreement and then arrogantly announced that its future commitment to manufacture cars in Australia was dependent on more government money!

Yet while crying out for government money during these years, what was happening to General Motors’ car production here and jobs?

In 2005 there were three production shifts per day and 900 cars produced per day at General Motors’ Elizabeth plant according to Haigh, and 60,000 a year were exported.

In 2012, 400 a day on one shift and only 14,100 exported.

However General Motors, Ford and Toyota reduced the range of cars made here at a time when people’s choice of cars to purchase skyrocketed. In 2012, there were sixty car brands and 360 models on sale in Australia from competing multinational car companies, including competition from General Motors, Ford and Toyota plants importing into Australia.

Sports Utility Vehicles (SUVs) are a case in point. There are seventy seven models available on the market in Australia and until recently only one (Ford Territory) made here.

The point is that the decision of what type of car is made in Australia is not made by the Australian government, Australian people or even the local management of these car multinationals. The decisions are made by the headquarters of these multinational companies based on their interests which are driven by profit maximisation on a world scale.

Australian car production represents 0.02% of world-wide car production and so we do not feature too highly in the car multinationals’ plans.

The people demand action

While approximately 90% of cars purchased in Australia are imported, this is not because the Australian people do not support an Australian based car industry. It is the fact that successive governments have allowed the car multinationals to dictate what is made here and what they can import that has led to the destruction of the industry and thousands of full time jobs.

The people in places like Geelong where Ford is based, and Elizabeth where General Motors is still a dominant employer with 1750 workers, make enormous sacrifices regarding reduced wage demands, and acceptance of job cuts in the hope of keeping the industry in their areas for their communities. But they are tired of such sacrifices being a one-way street.  Increasingly voices in the community demand a government takeover of the car industry in Australia. They support the building of environmentally sustainable cars for Australian conditions. They are ready to make them. They have demanded elected governments of the day make it happen.

SA Premier Weatherill at least had the decency to explain his opposition to a state government buyout of the car industry: the owners would not consent to the sale of the Australian operations and the consequent access by government to its global intellectual property and other business resources; acquiring and operating a company like General Motors would leave the government with insufficient funds for other social and economic investments; and it would expose the government to unnecessary risks.

Regrettably, such timidity is the best that can be expected through the parliamentary process.

It may be some way down the track but eventually the workers and their community allies will have to force the hand of government, seize the assets their labour has produced, and place their manufacturing capacity at the disposal of society.

We need not be shy about the type of social system needed to make this happen.

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