Time to cut our losses on Holden: US Gov’t loses $10.5bn in sale of General Motor’s stock

Via AP

US government sells rest of its General Motors stock; loses $10.5 billion on bailout.

It’s time the Australian gov’t bite the bullet and say to Holden that the subsidy “buck” stops here.

Update:

Holden quits Australia by 2017.

 

Comments

[Arthur Dent]

1.

hmmmm...subsidy, or dole for many thousands of people (and associated social costs) for many years? It's a hard one.

[Allan]

2.

Arthur wants to draw our attention to the possibility of thousands out of work and the associated social cost, not to mention the resulting cost of welfare that will be thrust upon the taxpayers.

That is not an unreasonable view but, instead of the general trend that points to Abbott and his government being to blame why don't we look at the real cause and ask that cause to pay for their years of destruction and greed.

Who am I talking about? Labor and its economy destroying unions, that's who. Why don't the people of Australia put it on the unions to put up the funds to keep General Motors and QANTAS going? After all, their actions have resulted in the current situation and those treasonous bastards have been selling Australian down the drain since WWII.

[Anton]

3.

Did Holden have to pay the carbon tax or increased electricity prices?

[Anton]

4.

Well, the jobs are already subsidised to about double the dole payment, so closing Holden would be a net saving.

Closing the car industry would also eliminate the justification for protective duties and taxes, giving us cheaper cars unless Labor get their hands on the national wallet again

[Arthur Dent]

5.

Well, the jobs are already subsidised to about double the dole payment, so closing Holden would be a net saving.

Are you taking into account all the associated industry job losses too?
Abbott's not to blame for this, of course, but the LNP will cop the undeserved fallout.

[Anton]

6.

Any jobs lost were obviously subsidised as well - effectively public servants.

How many jobs are lost due to the taxes imposed protecting union infested industries?

How many jobs are lost by the unrealistic wages dragging the costs of other industries upwards? (clearly the Holden wages are unrealistic)

How many jobs are lost through the misappropriation of capital to subsidised industries?

Leftism only look good when you are allowed to ignore the ugly bits.

[Arthur Dent]

7.

Leftism only look good when you are allowed to ignore the ugly bits.

The darwinian Free Market doesn't have any "ugly bits" Anton?

[Anton]

8.

The free market is the only economic system yet devised that can simultaneously deliver higher quality products at lower prices, with higher company profits and higher wages.

The only ugly bits are an intollerance of laziness and stupidity. I can live with that

[Marie Cromer]

9.

re Holden
____________
In the" Fin Review" economist Gottliebsen is of the view that there will a big surge levels of unemployment as small subsidary companies go to the wall...and with no funds to pay workers entitlements there will be much hardship and lots of anger will result...

This will cause up top 500.000 jobs to be lost...
a huge surge in joblessness and one he says will be dynamite for the Abbott Govt which will preside over the first major recession in two decades...very bad news for the Govt indeed and the polls already shows an erosion of support is on the way

Will Abbott be a one term PM ?
wait and see

[James Blake]

10.

The Age say the components industry collapse will lose $2billion from the economy and many jobs lost in small firms...spread across the nation but very bad in Vic and SA...the latter will be close to a state of depression

[Wally]

11.

Was there anything stopping the government from simply cutting the tax the industry has to pay rather than simply dishing out money?

[Ibbit]

12.

Agreed, Allan, but the company was also complicit in that they were prepared to feather bed their union bosses knowing it was actually taxpayer funds they had an endless pipeline to, until now, that is. Not much company principle involved in that, I suspect.

Besides, workers in other areas have had to reskill for new avenues of employment. Why can't it be the same for car workers?

Unsurprisingly, given the payouts (Grace Collier's two recent articles gives the lowdown here) of many thousands they will command, they can probably just retire with no need to be a drain on the social payment system.

Now, if Holden are throwing a tanty and leaving, money meant for Holden could be redirected to medical research - the funds of which Gillard cut - no unions involved there, you see - which is an area Australia really excels in.

[ibbit]

13.

Sounds a bit like a cry wolf story. I well remember the "recession we had to have" under Keating when many thousands were out of work, when notices of bankruptcies and liquidations were the biggest income earner for the Age, when whole streets were wastelands of closed business, when despair was the order of the day.

Australia recovered and it will again should the dire picture painted by Gottliebsen come to pass.

We are assured all the time that we cannot even envisage where the new jobs will come from for the future. Sounds like much hope there. On the other hand, Australia could always do a Detroit and sit on its hands and despair letting the place founder completely.

Can't see that happening here, particularly not with a government which knows how to run an economy - even a damaged one mired in debt - in place.

[Jim Witt]

14.

GMH is currently subsidized a great deal equal to $45,000 per employee and this is not under threat. GMH want a further subsidy of @ $150 million with no guarantee to continue operations after 2016. It is time for GMH to put their cards on the table in regard to future plans for Australian production and design. If they are going to shut down production here in 2016 they do not need any further subsidy and their employees should know so they can prepare for the fact. If they are going to stay, they need to make their operation more efficient, and the first way to do this is to deal with the unions in regard to their overly generous pay and conditions just like they had to do in the US. Of course these are Aussie unionists who would rather have no job at all than actually make some concessions to keep having a job so that will most likely not work here. While closure of GMH would harm the Aussie economy a great deal, I am afraid I can see little recourse. A business has to be able to stand on it's own and make a profit and GMH has never done this. Unless we ban imported cars, the Aussie car industry is finished and the fault can be fully placed at the feet of the trade unions.

[Anton]

15.

500000 people to produce less than 1000000 cars per year, or less than 2 cars per worker per year.

Exactly what specialised modern production technology are we supposed to be protecting?

[Account Deleted]

16.

In the end, the unions must take responsibility for for their part in the close out of Holden (maybe even Toyota). There continual wage demands have broken the camels back...It would also help that Holden built cars people want to buy...
Finally, maybe had we been driving left hand drive cars rather that right hand drive cars then maybe we would have sold more cars as export??? Maybe our cost of manufacturer would have been lower???

[Allan]

17.

GMH has just announced that it will cease production in Austraia within 4 years and the blame game has already started with the unions opening up on the Abbott government.

However, in their statement the unions refused to take any responsibility for the high production costs in Australia and the companies decision to close its Australian operation.

Let's have a look at some numbers. GMH Australia has received over $2.7 billion in assistance from the Australian government in just 12 years. For that the Australian taxpayer could look forward to only 10% share of the auto market in Australia.

GMH says that it costs $3750 moreto produce a single car in Australia than t does in any of its other plants in Asia.

While the unions bemoan the loss of jobs but as expected they accept no responsibility. It should be pointed out that locally made components supplied to GMH are only 50 percent of the total and GMH intended to reduce that to 25 percent. That means there was going to be a huge reduction in jobs whether the Abbott government provided more financial assistance or not.

The MSM and the union thugs would have you believe that it is the Abbott government's fault. What gutless irresponsible bastards the unions are!!!

As Anton said in earlier comments, it would probably cost less to put all those workers on welfare than to keep subsidizing GMH which is a lost cause and has been for some time.

[Anton]

18.

Alternatively, this could lead to a rejuvination of "our first free settlement colony".

The Holden closure follows the cancellation of the Olympic Dam expansion, as well as many other smaller events. More to follow.

This might be enough pain for even South Australians to learn that leftism always leads to suffering.

Are South Australians smart enough to learn? Probably not, but it is nice to be optimistic

[Peter Simmons]

19.

Cue the Leftist Borg Collective to blame Abbott when it appears this decision was made in Detroit in July.

Naturally not a word from these biased individuals on Ford and Mitsubishi, but of course, that was Abbott's fault as well in their twisted, partisan belief.

[dB]

20.

I hear Tony is trading the C*1 Statesman in on a BMW. He is ending the waste!

[Anton]

21.

Better made vehicle, and if he can get around the luxury car tax, much better value as well.

[Tom Deakin-Smith]

22.

I've no doubt that this decision will cost Abbott dearly as have his other"ADULT" decisons re Indonesia/.GrainCorp and much else...and if the polls worsen ,,,and they are already bad(52/48..a 5% swing in just a few weeks),,he may find Turnbull looking over his shoulder

Why is this happening ..why such indecision and why so many wrong decisions ?

amazing events from a new regime !...and worse to come as the ecomony goes down in 2014 and umemployment rockets by half a million if Gotleibsen's forecasts are right..and he's a respected economist and a conservative one.too..no lefty there

[Tom Deakin-Smith]

23.

Confusious says" governments that bit the bullet often get shot in the head "

[kraka]

24.

For 11 years the polls had Labour winning on weekends when an election wasn't being held. Unlike you, I am confident the economy will turn for the better sometime in 2014 driven by a resurgent mining boom. Have a nice cup of Earl Grey and settle down Tom. The fun starts next year with a Royal Commission into a financially corrupt, morally bereft Union movement and the affect on the polls that will have should be interesting. Bill Shorten will be in more trouble than Abbott.

[Account Deleted]

25.

Best you stop drinking the green flavoured Kool-Aid

[Account Deleted]

26.

For the record...Bill Shorten will never be PM.

[Allan]

27.

Using a new name today are we Tom Deakin-Harry?

What decision of Abbott's are you talking about? Abbott didn't make any decision about Holden, GMH made the decision and it was the right one whether you leftist fools realise it or not.

Why would any company stay in Australia when they can double productivity and substantially reduce the cost in Asia because they don't have to bow to destructively stupid union demands.

Go ask your blessed unions when they are going to apologise to the Australian people for their part in bringing this decision on and while you are at it ask them about the future of Ford and Toyota as they also move out of Australia.

How about Confucius say, "Those who allow unions to rule finish up with bugger all."?

[Account Deleted]

28.

From the Oz today.

"But Holden boss Mike Devereux said no amount of money from the federal government would have kept the company making cars in Australia.

Mr Devereux said General Motors in Detroit had made a decision on Tuesday that the long-term business case "just didn't stack up''

"We were already past that point,'' Mr Devereux told ABC radio in Melbourne.

"We feel that we have all the information that we need to know that we cannot make a sustainable operation in Australia.''

Mr Devereux said Holden had explained its business position to both sides of politics."

Game, set & match. Abbott is NOT to blame...

[pk]

29.

Abbott and all conservative thinkers are to blame for promoting and funding ventures which are not going to provide or be competitive for the future -and continue to fund useless 19h century modes of manufacturing and industry.

See also - the massive funding given to coal mining giants over small business renewables as well as R&D in this field.

- The dearth of funding into high end and specialised manufacturing, especially in the science arena - what no science minister?!

- the persistence in trying to srcatch up a few hundred logging jobs in Tassie and Victorian old growth forests, when tourism can and does provide so much more.

- the dirty deal making with a handful of farmers and shooters who want to continue pretending they are the man from snowy river and want their cattle to feed for free in national parks against all scientific and fire studies.

- Promote the use of roads for transport above all else, instead of rail and other public transport options, thus making our cities ports and suburban workers still more dependant of rising fuel and combustion engine cars.

yes- keep living in the 19th century fellas - and watch us be left behind, unskilled, uninnovative, and hoping we can just keep diggin' out the minerals.

[Allan]

30.

You are 100 percent right Andy. But the latest Labor party 'Chicken Little' alarmist, South Australia's immature small 'p' premier doesn't think so. His latest headline from the fairies and leprechauns at the bottom of his garden is that GMH will move out before 2017 and it is the Abbott government's fault.

This mental midget hasn't got the nouse to work out that it was inevitable and it will continue as more and more manufacturers move their operations out of Australia.

Then we have that other failed wonder premier from Victoria who threatens to look
Abbott directly in the eye as demand some form of protection and compensation for those workers who will have three years to find another job. Go look the unions and Labor in the eye and get them to chip in!!!

Kellogs is the latest to signal its intention to leave Australia in the near future. 100's of jobs have moved to New Zealand as local producers try to avoid the impact of high wages, a soaring Australian dollar and low productivity because of Labor union interference.

Around 28 of our food manufacturers and processors have left Australia already as have the clothing and shoe industries. I wonder if
Weatherill and Napthine could tell us why that would be?

[kraka]

31.

the only person living in the 19th century pk is you-still believing in class warfare and all the other weak socialist arguments.

Billions in subsidies to mining giants equals billions paid back through taxes,royalties,jobs and wealth for all those who want to work. Oh, and tax cuts for all under the last coalition government

subisidies in renewables-higher taxes, higher electricity prices and no measurable benefit to the environment-all affecting the poorest in our community-and yes the Libs should drop their support for renewables

subsidies to auto industry-more money in union coffers and the propping up of jobs that were unsustainable.

you really are a twit.

[Anton]

32.

Actually, it is rail that belongs in the 19th century. When are the left going to catch up?

[Anton]

33.

Only those ignorant enough to vote left believe the mining industry is subsidised.

They call on the diesel rebate, ignoring the fact that mine vehicles do not use the public roads the surchargs was supposed to fund. Perhaps pk would like to argue with a dump truck for road space sometime.

Including royalties, income tax and mining licence fees, the mines are the most heavily taxed industries in Australia. Thay does not even include the investment in local facilities - water, power, sports grounds etc, which usually exceeds government investment in these areas.

[pk]

34.

>which usually exceeds government investment in these areas.

Don't know how many locations in central WA with nil population need public pools anton.

But of course- according to the LNP we don't even need fast broadband (what is that, broken policy number #48 in the first 100 days?).

Just face the fact the conservatives cannot, by their very ideology, plan for the future.
You expect everyone else in this world is an ostrich about the changing conditions we live in? Renewables developed in other countries may very well take over our coal exports in 20 years. What will you do then? Whaling, corset making and child labour I s'pose.

[Anton]

35.

"with nil population",

So you don't count Aboriginal communities as human population. Noble savages I suppose?
Lovely, at least you are not a racist.

The opposite of socialism is not conservatism, it is freedom. The only advances the left has ever achieved are new ways of killing people.

My broadband at the moment is just fine. It can keep at least 7 devices in the house connected simultaneously and functioning properly. Maybe you just download too much porn

[Anton]

36.

I see the workers at Toyota were feeling left out, and decided to vote themselves into unemployment as well

[dB]

37.

much better value as well.

Yep, he's ordered himself a fleet of BMW 7-series, at the bargain price of just $525,000 each.

[dB]

38.

we don't even need fast broadband (what is that, broken policy number #48 in the first 100 days?).

Yeh, what happened to no surprises and no excuses? And if you look at the report, most of Turnbull's problems are of his own making. He's going to have to negotiate with every council around the country for space to install his god-awful nodes. And of course Ziggy knows the state of the ancient copper network better than most.

I remember when they installed fiber-to-the-home around Auckland a year or two ago, the biggest gripe from the locals was that they weren't re-laying the footpath turf "just right". Ya' gotta' love our Kiwi cousins.

[kraka]

39.

Off the top of my head I can name several towns that are prosperous and exist in their current form only because of the investment from mining companies. Tom Price,Newman,Paraburdoo,Tieri,Moranbah,Blackwater,Middlemount,Dysaght,Karratha,Port Hedland-not to mention subsidiary cities such as Mackay,Rockhampton,Gladstone,Perth,Townsville-and that is only Qld and WA and witout trying too hard. Mining has made millions wealthy enough to be safer,healthier and greener.
As for the left being the party of the future-give me a break-future debt for later generations is about the only affect they have on it.
Coal,Oil and Gas are here for the next 50 years-unless the "green" left drop their resistance to the only true green base power technology currently available at affordable prices-Nuclear energy.

[Account Deleted]

40.

Because BMW supplied the best contract. Holden didn't even bother applying. Only Mercedes Benz, Audi and BMW applied. If the gov't stuck with Holdens, they would have had to been shipped to the UK for after work and the cost was about $1.5m more than BMW.

So pull your head in

[Account Deleted]

41.

getting off topic here, but from today's OZ

Quote:
"The strategic review of the National Broadband Network found that if the rollout had continued under Labor's model, it would have needed $29bn more in peak funding than the $44bn forecast because of cost blowouts and revenue targets that were never achievable. And capital expenditure was on track to spiral upwards to $56bn rather than the $37bn in the NBN Co's corporate plan.

The review found that if the existing plan was kept in place, the project would not earn a sufficient return to treat it as an off-budget investment. Average broadband bills would also need to increase by 50-80 per cent to generate the 7.1 per cent rate of return targeted by Labor."

So again, Labor stuffed thing up...that's all Labor are good it, stuffing up and screwing taxpayers

[dB]

42.

So again, Labor stuffed thing up

Sure, and we dealt with them. I think most people here would agree they got what they deserved.

Surely it's now time to focus on the guys who are in charge?

[dB]

43.

I'm staggered that anyone could think our pollies need a fleet of half million dollar armoured limos to get around in. I guess it's further Americanisation of our system.

I'm guessing the tender was drawn up in the heady days when Gillard was copping tomato sandwiches from school kids, and regularly being rushed back to the safety of C*1 in the arms of a beefy security guy.

Now that all the right-wing nutters are quietly sipping their kool-aid again, couldn't he just ride his bike to work?

[Account Deleted]

44.

From our ABC's World Today

Ref: http://www.abc.net.au/worldtoday/content/2013/s3910163.htm

Quote
"GREG MARTIN: Well, there are competitive forces around the globe that we are seeing come to bear in other parts of the world, whether it be in the US and Europe and other parts of Asia. When you consider the scale and magnitude of that adjustment to automotive manufacturing around the world, it's finally come to bear in Australia.

If you look at the sustained strength of the Australian dollar, the cost to produce things in the country and then certainly it's a very small domestic market, arguably a very competitive and fragmented market, those forces came to play and it really resulted in us making a very difficult but necessary decision to cease production there in 2017.

BEN KNIGHT: Would a government assistance package have forestalled it?

GREG MARTIN: Unlikely, again these are forces that General Motors and other auto makers around the world are contending with, whether it's in the US or Europe. And unfortunately the time had come despite our best efforts and certainly despite the efforts of us working very closely with the government, likewise them working with us to forestall this, it was a tough decision that we had to make and the time had come."

[Allan]

45.

I don't hav3 a lot of time for Waleed Ali, but his article in todays SMH is about as correct as you could get and should be required reading for every politician and union official in this country:

http://www.smh.com.au/comment/holden-demise-the-price-of-a-global-economy-20131212-2za89.html