This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2014/feb/12/car-makers-threaten-to-close-sooner-if-cuts-to-federal-aid-not-slowed-down

The article has changed 2 times. There is an RSS feed of changes available.

Version 0 Version 1
Carmakers threaten to close sooner if cuts to federal aid not slowed down Carmakers threaten to close sooner if cuts to federal aid not slowed down
(7 months later)
The car industry is demanding the federal government slow its planned cuts to government assistance or risk the three big carmakers shutting down earlier than 2016 and 2017.The car industry is demanding the federal government slow its planned cuts to government assistance or risk the three big carmakers shutting down earlier than 2016 and 2017.
The Federal Chamber of Automotive Industries, which represents carmakers, also says any move to reduce quickly the 5% tariff on imported cars – which will make new cars up to $2000 cheaper – may also force earlier closure.The Federal Chamber of Automotive Industries, which represents carmakers, also says any move to reduce quickly the 5% tariff on imported cars – which will make new cars up to $2000 cheaper – may also force earlier closure.
The dire warnings come as Toyota was forced to deny claims by the treasurer, Joe Hockey, that the company had told him privately in December that workplace conditions were a major impediment to its future in Australia.The dire warnings come as Toyota was forced to deny claims by the treasurer, Joe Hockey, that the company had told him privately in December that workplace conditions were a major impediment to its future in Australia.
Hockey said Toyota Australia’s president, Max Yasuda, had “warned that it was proving to be very difficult to sustain the business with those sorts of conditions”.Hockey said Toyota Australia’s president, Max Yasuda, had “warned that it was proving to be very difficult to sustain the business with those sorts of conditions”.
“When they [Toyota] say in their statement that costs of production are part of it, that is pretty explicit isn’t it,” Hockey told 3AW. “At the end of the day, costs of production include a whole range of things and part of that is the cost of labour.”“When they [Toyota] say in their statement that costs of production are part of it, that is pretty explicit isn’t it,” Hockey told 3AW. “At the end of the day, costs of production include a whole range of things and part of that is the cost of labour.”
But Toyota said the claims were wrong, issuing a statement that said: “Toyota Australia has never blamed the union for its decision to close its manufacturing operations by the end of 2017, neither publicly or in private discussions with any stakeholders.But Toyota said the claims were wrong, issuing a statement that said: “Toyota Australia has never blamed the union for its decision to close its manufacturing operations by the end of 2017, neither publicly or in private discussions with any stakeholders.
“As stated at the time of the announcement, there is no single reason that led to this decision.“As stated at the time of the announcement, there is no single reason that led to this decision.
“The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.”“The market and economic factors contributing to the decision include the unfavourable Australian dollar that makes exports unviable, high costs of manufacturing and low economies of scale for our vehicle production and local supplier base.”
The shadow treasurer, Chris Bowen, questioned how companies could have confidence discussing large investment decisions with the treasurer if false accounts of those conversations ended up in the media.The shadow treasurer, Chris Bowen, questioned how companies could have confidence discussing large investment decisions with the treasurer if false accounts of those conversations ended up in the media.
“People who have a meeting with the treasurer of Australia deserve to know that he will not characterise that meeting in a way which is not accurate and this treasurer has to explain himself, and explain himself urgently,” Bowen said in Canberra.“People who have a meeting with the treasurer of Australia deserve to know that he will not characterise that meeting in a way which is not accurate and this treasurer has to explain himself, and explain himself urgently,” Bowen said in Canberra.
The Coalition has long promised to cut $500m from the Automotive Transformation Scheme, which is the main program of assistance for car and components makers.The Coalition has long promised to cut $500m from the Automotive Transformation Scheme, which is the main program of assistance for car and components makers.
Its mid-year economic statement said $100m would be cut in the 2014-15 financial year, $175m in 2015-16 and $150m in 2016-17. It has also declared an end to “the age of entitlement”, including industry grants such as the ATS.Its mid-year economic statement said $100m would be cut in the 2014-15 financial year, $175m in 2015-16 and $150m in 2016-17. It has also declared an end to “the age of entitlement”, including industry grants such as the ATS.
But the Federal Chamber of Automotive Industries said these cuts left only $200m in the capped scheme for 2014-15 and $125m for 2015-16.But the Federal Chamber of Automotive Industries said these cuts left only $200m in the capped scheme for 2014-15 and $125m for 2015-16.
Its chief executive, Tony Weber, said the cuts to the ATS needed to be “smoothed” – effectively pushed out into the final year – or they would “pose a real risk to the viability of carmaking over the next few years”.Its chief executive, Tony Weber, said the cuts to the ATS needed to be “smoothed” – effectively pushed out into the final year – or they would “pose a real risk to the viability of carmaking over the next few years”.
He said the government needed to “slow down those cuts to give the companies the best chance of continuing to build cars until their announced cease dates” because of the pressure the proposed cuts would put on the big companies and smaller components makers.He said the government needed to “slow down those cuts to give the companies the best chance of continuing to build cars until their announced cease dates” because of the pressure the proposed cuts would put on the big companies and smaller components makers.
The prime minister, Tony Abbott, has repeatedly said the government has time to plan for the closure of Ford in 2016 and Holden and Toyota in 2017 and the expected loss of more than 30,000 jobs. The industry minister, Ian Macfarlane, said the government might increase the $60m it had allocated for economic restructuring after Holden’s announcement, but it would not be rushed.The prime minister, Tony Abbott, has repeatedly said the government has time to plan for the closure of Ford in 2016 and Holden and Toyota in 2017 and the expected loss of more than 30,000 jobs. The industry minister, Ian Macfarlane, said the government might increase the $60m it had allocated for economic restructuring after Holden’s announcement, but it would not be rushed.
“We have the time to get this right,” Macfarlane told ABC radio. “We will step through it. We don’t want to rush it … we’ll go away and consider all those issues that we need to improve productivity and employment opportunities in Australia.” “We have the time to get this right,” Macfarlane told ABC radio. “We will step through it. We don’t want to rush it … we’ll go away and consider all those issues that we need to improve productivity and employment opportunities in Australia.”
The government is also facing calls from automotive groups to end immediately the tariff on imported cars, which will reduce their price by up to $2000 but cost the budget almost $1bn a year.The government is also facing calls from automotive groups to end immediately the tariff on imported cars, which will reduce their price by up to $2000 but cost the budget almost $1bn a year.
The tariff, set at 5%, is forecast to reap $920m in 2013-14, $990m in 2014-15 and $1.06b in 2015-16.The tariff, set at 5%, is forecast to reap $920m in 2013-14, $990m in 2014-15 and $1.06b in 2015-16.
“If tariffs were designed to help protect the local industry, then there is no longer any justification to maintain them,” said Andrew McKellar, executive director of the Australian Automobile Association.“If tariffs were designed to help protect the local industry, then there is no longer any justification to maintain them,” said Andrew McKellar, executive director of the Australian Automobile Association.
“If it is good enough to remove the mining tax and the carbon tax because they are unnecessary taxes that force up prices, then we can’t see why the same logic shouldn’t apply to car tariffs,” he said, suggesting the budget could lay out a plan for the phasing out of the tariff.“If it is good enough to remove the mining tax and the carbon tax because they are unnecessary taxes that force up prices, then we can’t see why the same logic shouldn’t apply to car tariffs,” he said, suggesting the budget could lay out a plan for the phasing out of the tariff.
But Weber said ending the tariff quickly would also put extreme pressure on the carmakers.But Weber said ending the tariff quickly would also put extreme pressure on the carmakers.