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countries that see wealth coming in from natural resources are often less competitive in manufacturing as a result.
and easy access to markets.
Those factors are certainly part of the mix, but the overall context is the gradual shift of car production from high cost wealthy nations like Aus, US, Western Europe to the developing world. When you look at the scale of downsizing by GM and Ford in the US, closure of their Aus facilities is not really that surprising:
Ford and GM have made a lot of costly mistakes over the years and their business models were predicated on never ending growth in car sales and no foreign competition.
Most recently both automakers put all of their eggs into the SUV market and that rug was quickly pulled out from under them as soon as fuel costs went up. They had all but abandoned the compact market to the japanese, koreans and germans.
I know car manufacturing in the US has fallen from its peak but I would hesitate to say that it's fallen far. A lot of it has just moved from Michigan and Ohio to the southern states (lower wages & taxes) and BMW, Volkswagen, Toyota, Nissan etc are all making cars in the US now.
I think it's very much the resources curse that's made for the strong A$ and thus weak exports but it surprises me that manufacturers would be so quick to abandon manufacturing like that. It seems to me like a dangerous game of chicken is going on.
The same reason why most manufacturing is moving to places with lower wages and lower production costs, it's nothing new, it's been happening for awhile now. It's a pity, I think we should be keeping more manufacturing here. That's globalised capitalism for you.
I think it's very much the resources curse that's made for the strong A$ and thus weak exports but it surprises me that manufacturers would be so quick to abandon manufacturing like that. It seems to me like a dangerous game of chicken is going on.
The main problem for manufacturing in Australia is that unless it's high end work Australia itself just doesn't have the demand capacity to make it economic for onshore manufacturing.
If GM sold the same percentage of cars that Holden does in Australia in the US it would be totally acceptable to keep making Holdens in Australia, but the same percentage in Australia does not equate to the same number of cars.
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