Combet pledges support to car industry

FEDERAL industry minister Greg Combet has delivered an upbeat message to the beleaguered automotive components industry, pledging the government’s strong continuing support, but simultaneously warning that support would never include a return to tariff protection.

Mr Combet stressed that the Labor government was determined to retain the automotive industry and its ability to conceive, develop and manufacture whole vehicles.

And he also gave an undertaking that the $5 billion that had been provided under the New Car Industry Plan will not be further diminished.

Addressing the annual conference of the Federation of Automotive Products Manufacturers (FAPM) today, the minister also fired a shot across the bows of people criticising the industry and speculating about its future after the announcement by Ford Australia that it planned to further trim its workforce in line with shrinking production volumes.

“I don’t want to hear … criticism of the industry and the suggestion that the executives in the industry aren’t up to it or the major motor vehicle manufacturers don’t know what they are doing,” he said.

“I don’t want to hear people talking the industry down, talking Ford down as an unfortunate by-product of the announcement made last week.

Left: Former innovation and industry minister, Kim Carr.



“There is nothing more certain than if you start talking the industry down, start talking the company down, start talking the capacity down, start ridiculing the executives, it becomes a self-fulfilling situation.

“We have to speak with confidence about the future of the industry and make these things work.”

And that also held for the Liberal-National Party Coalition in Canberra.

“There is a debate about the efficacy and economic efficiency of the New Car Plan and the various funding programs,” he said.

“I would ask you to see past the politics. I don’t think any Government in Canberra really should seriously posit that we don’t proceed with these programs of engagement and support with this industry.

“However, the opposition has made a number of comments that create some uncertainty about that, I think that is extremely unproductive.”

Mr Combet discarded his prepared text and, instead, recounted his experience in industrial as a means of establishing that he understood the adjustment the car parts industry had been going through for the last two decades or more.

Drawing on his history as a senior leader in the labor movement and head of the ACTU, Mr Combet indicated his solidarity with the industry, frequently using the term “we” when talking about the problems facing the industry and the challenges ahead.

“We have been on a pretty significant journey over the past 25 years and I acknowledge, for the parts industry, what a tough time it has been,” he said.

Mr Combet said his predecessor, Senator Kim Carr, had drawn up a policy that took account of the new economic conditions but also plotted a way forward for the industry.

“Senator Kim Carr started a very important process in developing the New Car Plan, which was an acknowledgement of these realities and the vital importance of the industry to the Australian economy,” Mr Combet said.

He said the plan committed $5.4 billion of co-investment to the industry to assist the necessary structural adjustment and to help the car-makers get their operations onto a more sustainable footing.

It was also designed to assist the industry become more integrated into the global parts supply network.

“I had the opportunity to go to China earlier this year, to the Beijing Motor Show, and I have never seen anything like it,” he said. “It was unbelievable.

“The scale was just amazing. The joint was jam-packed, and the growth in that market is clearly going to be phenomenal.

“It will attract massive investment and, as you all know, we have got to access to the volumes that are occurring there.

“Our volume in domestic manufacturing by the three manufacturers have declined in recent years, I don’t have to tell you that.

“Ultimately we have got to have a sustainable motor vehicle manufacturing capacity and a growing components sector that is taking advantage of global supply chains and achieving volume by being in those supply chains and having access to the market in China.”

Mr Combet stressed that Australia had traditionally been a trade liberaliser and that the Gillard Government was not going to change that.

Asked what the cost would be for the government if it raised the current automotive tariff from five to 10 per cent, Mr Combet said there would only be a cost to consumers.

“We won’t be re-embracing tariffs,” he said. “We’re well past that debate.”

Mr Combet drew attention to the fact that Australia was one of only 13 countries that could design, engineer and construct a new car.

“This government is determined to hold on to that capacity,” he said.

Importantly, in the light of the government’s decision to cut short the Green Car Innovation Fund so the money could be diverted to the Queensland floods reconstruction, Mr Combet also gave an undertaking about the remaining funds earmarked for the New Car Industry Plan.

“We will hold on to that funding envelope,” he said.

He acknowledged recent industrial disruption in the industry, saying he was prepared to personally intervene if it would help resolve issues.

“We have got to do all we can to ensure a joint effort on the part of the unions, the employees and the companies involved to ensure that we’ve got a co-operative effort to achieve the changes, efficiencies and the competitiveness we’ve got,” he said.

“I say that as a former union official, with full knowledge of a lot of the characters that you deal with.

“I am more than happy to speak to former colleagues of mine about the challenges that we have got because we have got to nurture this industry and ensure we don’t inadvertently cause it harm by having a conflict-ridden approach to the industrial relationship.

“I send that message on every opportunity I have.”