The automotive industry is not finished: Carr

THERE is “every chance” Australia will again be making whole passenger vehicles in the future, despite the looming shutdowns of the Ford, GM Holden and Toyota assembly plants, according to Senator Kim Carr.

Senator Carr, the former industry minister in the Rudd government, has been speaking with two companies that are interested in tapping into the human resources and engineering expertise available in Australia to make cars.

Addressing the annual awards celebration of the Society of Automotive Engineers-Australasia (SAE-A), Senator Carr said that maintaining the current high levels of capability would require suitable policies and support from the Commonwealth.

“This is an industry that has always been a great repository of knowledge and skills in advanced manufacturing,” he said. “The industry is a powerhouse of innovation, engineering talent and research and development ability.

“We have to preserve those capabilities and that, as I see it, is part of my mission, to actually attract the new investment. And no-one should pretend that is going to be easy.”

Senator Carr said he believed the economic consequences of the shutdown of the Ford, GM Holden and Toyota operations would be severe.

“But I firmly reject the doomsayers who suggest that is the end of the automotive industry in this country.”

He said he had been speaking to companies that were interested to fill the void that will soon be left by the departure of the three local car-makers.

Asked whether Australia could move back to production of whole vehicles, if not in mass production, then in medium volumes, Senator Carr said “Yes, there’s every chance”.

“I have spoken to a number of investors that are prepared to build full motor cars in this country. They do require support from the Commonwealth.

“There is no doubt in my mind we could do a great deal more in regard to motorsports, special-purpose vehicles. We can ensure that we are producing vehicles that are of particular niche markets, high value, but won’t necessarily have large production runs.”

The design and development operations to be maintained by Ford and GM Holden would be significant parts of the industry, but Senator Carr said he had recently visited parts-makers and educational institutions where innovation and advanced material science showed that there was plenty of life left in the automotive sector.

He said he had visited Harrop Engineering in Preston that, among other things, makes upgraded brakes for use on Toyota LandCruisers working in mining operations, and Unidrive, which makes the carbon-fibre torque tube used on Chevrolet Corvettes.

“Whether we maintain these capabilities in supply-chain firms will depend largely on government policies, especially those determining access to the Automotive Transformation Scheme,” he said.

He said he also visited RMIT University and that the supply of graduates was showing no signs of decline despite the imminent closures by the three car-makers.

“At RMIT there are 127 students who are undertaking automotive engineering degrees. They are amongst our brightest students. The minimum entry requirement is an ATAR of 91.75.

“And there is no evidence of a drop in demand by students to undertake automotive engineering. This is key to my argument about why we should be optimistic.

“We have the talent, the capability and I know that as a consequence we can attract the investment if we have the right people available and continue to be available.”

Senator Carr blamed the closure of the Australian automotive industry on the Abbott government, adding that it mirrored the attitude of the Thatcher government in Britain in the 1980s, a decision now proven to have been misguided.

“Just think what happened in England after the devastation of Margaret Thatcher. There was a widespread view that the automotive industry in the UK was finished.

“But how quickly was it understood by the political system in the UK, and that is across the parties, of how important automotive was to the future of Britain?“Today, Britain is one of the leading exporters of parts and vehicles in the world, and a Conservative government is investing heavily in the future of the automotive industry.

“We know that there is an understanding across politics of just how important the automotive industry is. I say that is a position that can be replicated here.”

Senator Carr made the point that innovation was not the sole preserve of the information and communications technology (ICT) sector.

He said the Germans had a much more encompassing view of innovation and how it plays a significant role in every activity.

“In contrast to the US, the Germans have this view that innovation is something that goes right through the economy, not just something you leave to a few smarties in black T-shirts and gold chains, riding skateboards and developing new apps for the collection of coffee.

“Innovation is an incremental process, not a series of light-bulb moments for researchers working in isolation.

“It is about the steady transformation of an economy, firm by firm and industry by industry.”

The core of the German 'High-Tech Strategy' is what they term Industrie 4.0, Senator Carr said.

“In English-speaking countries this is more commonly referred to as the Internet of Things or, if you take a longer historical perspective, the Fourth Industrial Revolution.”

The first three industrial revolutions were the harnessing of steam power in the 18th century, electrification in the 19th century and the spread of ICT in the 20th century.

“We are in full swing in the development of the smart factory, which transforms industrial production just as the assembly line transformed industrial production just over a century ago.

“What we now know is that the smart factories of the fourth Industrial Revolution will make it easier, even cheaper, to produce advanced manufacturing technologies for Australia’s unique conditions.”

Senator Carr said Australia’s unique climate conditions, among other things, mean that vehicles here will have to be different from global products.

“They will need to be customised, just as I have spoken about with heavy transport.

“Just as the UK car industry was revived by refocusing on products in which British firms could gain a competitive advantage, so Australia could seek to do the same.

“We should exploit our strengths – not only in the existing automotive supply chain, but other mobility industries as well.

“If diversification beyond passenger cars is to happen, it will mean getting the policy settings right.”