Published 22-10-2018

THE CAPABILITIES OF THE AUTOMOTIVE INDUSTRY MUST BE PRESERVED

22-10-2018

Last week, the Industry, Science and Technology Minister, Karen Andrews, made an announcement that indicates a belated change of mind by the Government. The minister unveiled a $5 million programme to encourage graduate engineers to work in Australia’s automotive sector.

Under the programme, engineers will be asked to submit research proposals and the best of these will receive funding.

“Australia has a thriving automotive components sector and is competitive in global vehicle design,” Ms Andrews said. “We need more of the highly skilled engineers involved in these areas and across the broader automotive industry, including trucks and buses, in order to compete internationally in the rapidly changing space of vehicle design.”

I agree wholeheartedly with those sentiments. But I also note the sad irony in the fact that the Minister’s announcement was made in the same week as the anniversary of the end of motor vehicle production in Australia.

If the minister was aware of the irony, she gave no hint of it. Nor did she express any regret at the fact that the Holden and Toyota shut down production last year because the Government goaded them to leave the country. There was no inevitability about the closures. They were the result of a political decision.
I do not expect the Government will acknowledge its role in undermining the automotive industry.

But it is good that the Minister’s announcement at last recognises, at least indirectly, what is in danger of being lost.

It is an improvement on the performance of her predecessor, Senator Cash, during a Senate estimates hearing earlier this year, when I asked how many companies in the automotive industry she had met with.

She replied that she would have to take the question on notice. When her department sent the written response, it read: “Minister Cash meets regularly with companies, including manufacturers.”

The Government now seems to have grasped that the automotive industry has always been a powerhouse of research and development in Australian manufacturing, and across the wider economy. Industry leaders in other sectors, including mining, have long acknowledged this.

What is important now is to preserve the engineering and design skills in the industry, so that it can continue to spur the development of advanced manufacturing in this country and remain part of global supply chains.

The three former motor vehicle producers have recognised the depth of talent in this country’s automotive industry by choosing to retain engineering and design centres here. And the Government’s graduate engineering programme, though a modest outlay, will help too.

It would have been even better if the Government had also heeded the recommendations of the Senate inquiry into the future of the automotive industry and allowed the Automotive Transformation Scheme to operate until 2021, to facilitate the transition of component makers into new supply chains. That, however, would have required a more strategic view of the industry than the Government has yet been willing to take.

For the sake of Australia’s future as an advanced manufacturing nation, the capabilities of the automotive industry must be preserved and extended.
If we do find the means and the will to do that, others will profit from what Australia has lost.

That has already started to happen. At the Paris Motor Show this year, a little-known car maker, Vinfast, launched two new models, a sedan and an SUV.

Vinfast, which has only existed for 18 months, builds cars in Vietnam. And company executives told journalists at the motor show that the firm had benefited from recruiting Australian engineering talent after the auto shutdown here.

The rise of Vinfast is a cautionary tale, but the research and development capabilities in Australia’s automotive industry continue to influence other manufacturers here.

Quickstep, an aerospace firm that has a contract to work with Chemring Australia on the RAAF’s new F-35 fighters, relied on the advice of former automotive engineers in designing a new manufacturing facility in Bankstown.

Quickstep’s CEO, Mark Burgess, has said that many of the company’s 234 employees have an automotive background.

In one sense, this is just another example of the flow-on benefits that automotive industry expertise has always provided to other manufacturing sectors.

The Quickstep story, unlike the Vinfast story, is not about a loss to the national economy. But both examples are vivid reminders that the automotive industry is a great concentration of talent that we cannot afford to lose, for all the reasons that Minister Andrews set out in her announcement.

And a future Shorten Labor Government will do everything possible to ensure that Australia’s automotive industry capabilities continue to be part of this country’s manufacturing future.

Senator Kim Carr is Shadow Minister for Innovation, Industry, Science and Research.

 

 

 

 

RELATED NEWS

  1. Australia has always been the home of manufacturing. Fifty years ago, Australia manufactured everything from washing machines and fridges to cars and steel.
    Fast-forward to today, Australia ranks last in manufacturing self-sufficiency among all OECD countries. 
    Australians consume $565 billion...
  2. It is a privilege to take up my role as Industry Minister during an exciting time in Australian manufacturing. 
    I believe that Australian manufacturing has a significant opportunity to grow a resilient, globally competitive and vibrant onshore capability.  
    I know how vital reliable and affordable...
  3. Australia’s comparatively strong position emerging from covid-19 would not have been possible without the exemplary performance of its businesses. The government needs to guarantee they will not be punished for their diligence.
    Withstanding a once-in-a-lifetime pandemic with remarkable agility and...