Auto industry didn’t have to die: Kim Carr speaks

Former industry minister, Senator Kim Carr, has rubbished the idea that the demise of our car industry was unavoidable. He spoke to Alan Johnson.

THE Abbott Government’s portrayal of General Motors and Toyota as the villains in their decision to cease manufacturing in Australia has been described by Senator Kim Carr as “fraudulent”.

“I use that word because some people are implying the car companies were not sincere in their negotiations. The inference is that they were lying to us, however the amount of work they put into our 2020 car plan, puts a lie to that,” he told Manufacturers’ Monthly.

Carr explained that just prior to last year’s election, he was having detailed conversations with General Motors and Toyota about new investments.

“We were discussing two new models for GM and two for Toyota.

“The reason we announced a renewed car plan for the 2020s prior to the election was that I knew that the companies would be taking up the investments if the policy settings were right.”

Instead, Carr says, General Motors and Toyota were hounded out of Australia by the Abbott Government, with their negative comments in December last year.

“You can’t describe international companies and their senior executives as grubby rent seekers and not expect a reaction,” he said.

“The car companies knew they weren’t welcome here. I don’t rely on my passion for the manufacturing industry; I rely on what the companies actually said both publicly and privately to me.

“If the new government had been serious about keeping our car industry, the announcement that they were going to take $500m out of the co-investment program should have been discussed with them privately.

“They should have gone to Detroit and Nagoya and talk to the principals about their new co-investment plans.

“If I was still industry minister, we would still have a vibrant and exciting car industry in Australia, beyond 2017,” Carr said.

Trade priorities

Carr said the idea of raising the tariffs on imported cars back to 10 or 15% would have made little difference.

“The horse had already bolted. Plus the tariff issue was dwarfed by the changes in the currency, which was a consequence of the mining boom.”

He said one of the most damaging developments in terms of our trade negotiations was the signing of a free trade agreement with Thailand.

“There is no doubt that some of the free trade policies pursued by the zealots in the trade department were always going to have an adverse impact on manufacturing.

“The idea that we could trade cars for cows was firmly set in the minds of some people in the trade department.”

He said the harsh realities are now dawning on these people, that it’s going to cost us a lot more to lose our car industry, than it was to keep it.

“We now spend more money on cows, sheep and goats than we do on the car industry, reflecting the fact that Governments make choices, and those choices are determined by political priorities.

“I see just this week, the government is prepared to rule out changes to the fuel excise bounties, which on an annual basis is at least four times the size of the support for the automotive industry.

“That’s why I say this Gov has ‘cockeyed’ priorities.”

Impact of closure

Carr describes the Coalition’s approach to the car industry as an attitude that is born of unreality about how a country’s economic system actually works.

“The government has not taken into account the cost to the budget in terms of social security, which will dwarf any co-investment payments that would have been made under Labor.

“Plus there will be the costs of social dislocation that comes about with the destruction of these industries, and also the economic cost to other industries because of the spill over benefits that come from automotive.

Carr said that while the car industry employs around 50,000 directly, using the normal multiplier of three or four to one, the figure rises to over 200,000.

“Just as the British after Thatcher realised what a terrible mistake had been made, there was a bi-partisan realisation that they needed to rebuild the industry, so will Australia. It will come to pass.

“There is an inevitability that this country will come to realise what it has lost, and there will be a need to rebuild the capabilities.

“Labor will do all it can to assist Phoenix to rise from the ashes at the earliest opportunity we have,” Carr said.

Image: The Australian