Articles by Sarah Martin

The government will move to allow personal imports of overseas vehicles, raising fears from industry the move will cause a knock-on effect to dealerships.

As the Abbott government prepares to release a regulatory impact statement into changes to the Motor Vehicle Standards Act, specialist car importers are urging it to resist pressure from the powerful automotive lobby and relax regulations on vehicles entering Australia.Slamming current restrictions as complicated, expensive and outdated, specialist car importers say consumers will benefit if the government frees up imports of second-hand vehicles while introducing new safety regulations.The call comes amid a government review of the act and after last week's Harper report into competition policy supported progressively relaxing restrictions on vehicle imports.A shake-up of the current regulatory environment would slightly increase the volume of used vehicles from other right-hand-drive marketsNuwan Piyatissa, chairman of RAWS - the Registered Automotive Workshop Scheme, which imports specialist vehicles - said the government was under immense pressure from the established "cartel" of vehicle dealers to protect the existing market.RAWS wants the act changed to allow imports of vehicles less than six years old for models not imported new by the original manufacturer."The existing arrangements of an established cartel which allows high-volume vehicle wholesalers and retailers to dictate pricing, control supply and predetermine the type and specification of vehicles imported to Australia need an urgent overhaul," Mr Piyatissa told News Corp Australia.He said a shake-up of the current regulatory environment would slightly increase the volume of used vehicles from other right-hand-drive markets and this would stimulate competition."These used imports, many of them built on the same production lines and to the same strict standards applied to models already sold here, would compete with Australia's traditional car yard, generating competition and fairer pricing," he said.He gave the example of a 1998 Ferrari 355 imported from Britain, which would be on the road for less than $100,000, a saving of about $50,000 compared to one bought in the Australian market.Holden, Ford and Toyota have warned of potential safety concernsChanges to the act to allow consumers access to cheaper vehicles have also been supported by the Productivity Commission in its review of the act last year, the peak national motoring consumer group, the Australian Automobile Association, and the Australian Competition & Consumer Commission. But auto industry groups and carmakers have been pushing back against the potential change since the government released a policy options paper in September.The Federal Chamber of Automotive Industries has argued there is "no compelling public policy case" for reducing the barriers to personal importation of new vehicles, while Holden, Ford and Toyota have warned of potential safety concerns. Assistant Minister for Infrastructure Jamie Briggs is assessing submissions into the act's review and is expected to release a regulatory impact statement next month.Last year, Mr Briggs said "fearmongering" from industry did not mean change to vehicle imports was impossible, but said the government would not allow Australia "to become the dumping ground for other countries' second-hand lemons".

The car industry is resisting a Coalition push to allow consumers to personally import vehicles from overseas amid fears the market will be swamped with cheap and unsafe cars.The Abbott government is pursuing changes to the Motor Vehicle Standards Act as part of a broader agenda to cut red tape and allow consumers greater purchasing choice.But the automotive industry has warned that jobs in the car dealership network would be threatened by the move, and that consumers would carry risks associated with importation.Industry groups said safety issues could arise from deregulated imports, including cars unsuitable for Australian conditions exploding in the heat, sparking bushfires, or interfering with the mobile phone network.Assistant Infrastructure Minister Jamie Briggs met industry groups at Parliament House yesterday to define which vehicles would be allowed if changes to the act were implemented.Vehicles being considered for personal imports would need to come from right-hand-drive markets, be purchased from authorised dealers in a "trusted vehicle source market" and have driven a maximum of 4000km on delivery.Yesterday, Mr Briggs said he was not convinced that concerns raised by industry would make personal imports unfeasible."I understand that people have got concerns...but there is nothing I have seen that makes it impossible to go down this path," Mr Briggs said."The fearmongering is to try and make it seem impossible, and I don't think it is." The Federal Chamber of Automotive Industries has argued there is "no compelling public policy case" for reducing the barriers to personal importation of new vehicles.FCAI chief executive Tony Webber said yesterday's meeting had done little to convince him that industry's concerns could be adequately addressed."The problem for the individual is the risk profile," he said. "It is so difficult for the individual to know what they are buying, and when they are buying a product they are transferring all that risk on to themselves, and they can't be reasonably expected to understand that risk."Mr Briggs said some of the concerns raised by industry seemed to be "over the top".

South Australian premier Jay Weatherill is on the hunt for another carmaker to take over the Holden brand in Australia, and continue to build cars at the Adelaide Elizabeth and Melbourne Fisherman Bend plants.Mr Weatherill has already spoken to "high end'' overseas carmakers about taking over the Holden brand and the Adelaide factory, saying he wants auto-manufacturing to continue in Australia. "It may be that a particular car manufacturer might want to set up here but use the equity that's in the Holden brand to continue making cars," he said."That's obviously something that's the property of General Motors at the moment and, presumably, they have an interest in keeping it because it has value for them. But that is something that we would want to advance in any discussions with Holden."Mr Weatherill, who has called on the federal government to commit to welfare and job programs to prepare for Holden's exit in 2017, said he was confident the plant could be kept open as a "viable manufacturing enterprise". "Before we start saying car manufacturing is over, we want to completely exhaust all of the possibilities," he said."There's a workforce, there is a plant, there is a well-known and large brand, so the raw materials are there -- obviously it would be a different operation, and the sort of thing we have in mind is the smaller, high-value vehicles. There are companies around the world that specialise in short-run, high-value vehicles where the cost element becomes a less important part of the equation."A government spokesman has refused to comment on reports that Austrian-based contract carmaker Magna Steyr was one of the companies in discussion with government. Magna Steyr has manufactured vehicles for BMW, Mercedes and Audi and has 312 manufacturing operations worldwide. The company could not be reached for comment at the time of this article being written.Mr Weatherill insisted the suggestion was not "fanciful", but conceded it was a complex proposal that would require co-operation from General Motors. However a Holden spokesman ruled out selling the brand."We are 100 per cent committed to the Holden brand and we intend to be selling Holden cars in Australia for many, many years."The South Australian government is preparing its formal economic and social response to Holden's announced departure, and will present a final plan to the commonwealth by the end of the month. Yesterday, the government and representatives from the state welfare sector warned that retrenched Holden workers would struggle to find similarly paid work when Holden left the state.Mr Weatherill said Holden workers were regarded as the 'working-class aristocracy'. "Those were great jobs, Holden jobs were regarded as really high-end jobs, well paid, very secure," he said."That loss . . . of a job for life, and having to take another job perhaps at a lower salary at a lower level of security, really it is very difficult for people to separate that as anything other than a devaluation of themselves."

The closure of Holden’s Elizabeth factory in Adelaide was planned as part of a global restructure that involves the closure of three plants worldwide. The Detroit-based car giant, which had planned to announce the closure on Friday last week, granted Holden a last-minute reprieve after deciding it didn't want to book the cost of the closure in this quarter's financial results.The postponed announcement has left the Holden workforce in limbo, with deep uncertainty about the company's future in Australia and hardened rhetoric from the government that it would not increase financial assistance to the carmaker. GM signed off on the plans last month, sources close to the decision said.The other closures, which include one in Korea, are expected to go ahead but Holden was granted a stay of execution so that GM could spread its balance-sheet writedowns, which already include up to $1 billion this quarter.Holden on Friday denied that a final decision had been made on the plant's future. However, its closure announcement had already been drafted and circulated, sources said, with workers due to be informed of the decision at yesterday's 2.15pm change of shift. A decision in the early hours of Wednesday morning forced a change of plan.GM had decided "to cut Holden some slack" after it appealed for a stay of execution in the hope of winning over the government on additional funding. Holden wants long-term commitments to help fund the replacement for the Commodore from 2016, which was scheduled to be the Malibu mid-size sedan, and eventually annual "rent" payments to keep its Adelaide plant alive.Without the additional cash, Holden would pull out as early as 2016, at the same time Ford will shut its factories in Victoria. The government dug in its heels on Friday. Tony Abbott said it would offer nothing beyond the $500 million in funding to 2017 promised at the September election. "We think there's more than enough money on the table," the Prime Minister said. "But there is no more."We took a policy to the election that...includes very substantial ongoing support for the motor industry. We stand ready to make that support available." He called on Holden to set the record straight on where it stood. "The message we're getting from Holden is they're in two minds; I would like them to clarify exactly what their position is," he said.The government has asked the Productivity Commission to review the merits of providing financial assistance to the car industry, with a draft report due on December 20 and a final report at the end of March next year. A source close to the government said it believed Holden had already decided it was going and the Coalition was now resigned to the decision. "It's game over," he said, "but this is political poison."The government believes it is being painted as the villain when the decision to quit has already been made. "They have decided to leave Australia; it is now a matter of timing," one minister said. Another raised doubts about the government's strategy. Holden sources said Mr Abbott's comments were an "extraordinary" attempt by the Coalition to "bully" GM into an announcement before Christmas.Coalition sources said Mr Hockey was told of the imminent decision on Wednesday morning, but by that evening GM had changed its plans. Company insiders say Mr Hockey and Mr Abbott are trying to force Holden's hand by making the company's decision public. Sources say the Prime Minister and Treasurer want the bad news of Holden's closure finalised before the end of year.South Australian Premier Jay Weatherill said "right-wing ideologues" within the Coalition wanted Holden to leave. He said Holden managing director Mike Devereux had denied reports about the decision and MPs committed to "scorched earth economics" were trying to undermine Holden. "The right-wing ideologues in cabinet are saying...let's scupper this right now," Mr Weatherill said. "If Tony Abbott had any guts at all, he would be here looking these workers in the face and telling them that he has already made up his mind."Australian Manufacturing Workers Union state secretary John Camillo said absenteeism was increasing at the Elizabeth plant because of the uncertainty surrounding its future. "We've got workers, we've got families, we've got communities who are really worried about whether Holden is going to survive or not," Mr Camillo said. GM is understood to have rescheduled the closure announcement for late January, after the Detroit motor show.Additional reporting by PHILIP KING 

Despite subsidies, Holden manufacturing plant does not turn a profit. Holden's manufacturing plant is losing up to $18 million a year -- or $270 a vehicle -- despite the carmaker factoring in at least $1 billion in government subsidies during the next decade as closure looms for its marginal Australian operations.The Australian can reveal the grim financial snapshot -- based on Holden's internal figures -- that show the carmaker cannot turn a profit without $50m in operating cost savings offered by unions in August but contingent on the company agreeing to build two next-generation vehicles at Elizabeth from 2016.The figures are modelled on the future production of about 65,000 cars a year at Holden's plant in South Australia and were provided to the manufacturing union in order to secure the cost savings. Based on these figures, the carmaker would lose about $100m a year without taxpayer subsidies, and would make an annual profit of about $30m only if it successfully secured government support during the next decade.With the carmaker's future hanging in the balance, South Australian Labor Premier Jay Weatherill, who seeks re-election in March, yesterday warned of 13,000 job losses if Holden's factory in Adelaide's northern suburbs closed. Holden worker Tracy Young, who yesterday picked up a new Holden VF Calais sedan, said she was keen to see the company continue its strong carmaking tradition in Australia."We have had a Holden before, and we are supportive of the company and trying to keep manufacturing in Australia," Ms Young said. "From the point of view of keeping the manufacturing industry, and jobs, I think it is definitely important to subsidise the industry."Notes prepared by the chair of the South Australian Labor government's manufacturing council, Goran Roos, have shown the state government was advised in August that it was "likely that vehicle assembly will eventually cease" at the Elizabeth plant, with 2016 flagged as the most likely date.Australian Bureau of Statistics figures released yesterday showed the unemployment rate in South Australia rose to 6.6 per cent last month, almost a percentage point above the national rate of 5.7 per cent, and the highest of all mainland states. The figures represent the loss of 5500 jobs in the past month, and 28,000 fewer full-time jobs in the state than six months ago.Mr Weatherill said the unemployment rate was "challenging", particularly for the manufacturing sector amid an escalating unemployment rate in Labor's last held mainland state. The Premier has urged the federal government to commit funding to Holden before a Productivity Commission report is completed next year."This underscores the importance of securing our manufacturing base," he said. "As challenging as this information is for us, imagine how much worse it is for us if you take 13,000 jobs out of the SA economy and strip out the capability that underpins our manufacturing sector. The truth is... manufacturing businesses need to change to survive."Mr Weatherill said reports it was "likely" Holden would close in 2016 came as no surprise to his government. Australian Manufacturing Workers Union South Australian secretary John Camillo said the union had been prepared to agree to cost savings, including a pay freeze, based on the loss-making figures. "That is why they wanted the flexibility from the workforce," he said.Holden has presented an investment case to government, which includes the need for annual subsidies to support a domestic-only market producing 65,000 cars a year. 

Closing Holden's Australian manufacturing operations would cost the company $600 million, general manager Mike Devereux has told government negotiators. Sources said the figure was discussed at meetings in Adelaide last week, and would be critical to Holden's decision on whether to maintain its Australian operations. Holden yesterday would not dispute the figure, saying only "we have no comment about anything that is discussed in private meetings". The carmaker is seeking financial support from the Coalition to keep making cars at its Elizabeth factory in Adelaide, in addition to $275m committed by the federal Labor government last year. Industry Minister Ian Macfarlane and South Australian Premier Jay Weatherill began fresh talks with Holden last week on the new round of taxpayer assistance, which is needed to secure a $1bn investment on two new vehicles from 2016 to 2022. Mr Macfarlane will today meet Ford and Toyota in Melbourne to discuss the Coalition's proposal to cut $500m from automotive assistance. The cost to General Motors of shutting down its Australian operations will be weighed against the annual losses incurred by its local manufacturing division, and how significantly the federal government is prepared to offset these losses. Holden has recorded losses in six of the past eight years totalling $730m, largely attributable to its Australian operations. At the May release of Holden's 2012 financial report, the company's chief financial officer, George Kapitelli, said its $152m loss for the year was "a direct result of Holden building cars in Australia". RMIT professor of institutional economics Sinclair Davidson said Holden would be calculating whether to stay in Australia based on a loss-minimisation strategy. "There is a huge cost associated with closing down the business and as long as they are still covering that cost, even if they are still making a loss, it doesn't pay for them to close," he said. "It pays them to keep going, even as a loss-making operation. (But) the calculation is... how much are you going to lose if you shut down now, compared to how much do you lose if you keep on going. At some point it will pay them to shut down." The $600m cost of closure is significantly more than the $300m Mitsubishi spent to close its South Australian operations in 2008, which resulted in 1200 job losses. Most of the $600m is understood to be redundancy liabilities for Holden's 1750 factory workers, but it also includes the cost of decommissioning Elizabeth and site-decontamination work. Ford announced its closure in May after posting an after-tax operating loss of $141m for the 2012 financial year. This followed a loss of $290m in 2011. Mr Macfarlane said the Coalition would wait for a draft report from the Productivity Commission, expected by Christmas, before making any commitment to Holden. "If that draft indicates there is a viable future for the car industry in Australia, it will provide a basis for the government in making sure the existing Automotive Transformation Scheme is operating in the best way for the industry," he said.  

The Abbott government has told Holden it must brace for an end to taxpayer assistance as a "final solution" is prepared for the carmaker. Industry Minister Ian Macfarlane met with Holden general manager Mike Devereux at the company's manufacturing plant in Adelaide's north yesterday to begin talks on assistance under a Coalition government. Holden is seeking a new taxpayer-funded subsidy to support a $1 billion investment in two new vehicle models at the plant, in addition to $275m committed last year. Mr Macfarlane prefaced talks by warning "there is not a lot of money" on offer, and said that if Cabinet approved extra financial assistance for the carmaker, it would be the last hand-out on his government's watch. "I want to say to the industry, there will be one shot at this," he said. "We can't go on supporting this industry. They have got to become internationally competitive." Mr Macfarlane indicated he would try to salvage Ford's future operations in Geelong in Victoria, after the carmaker announced in May it would cease local production in 2016. "I'd like to think I can do something with Ford," he said. Mr Macfarlane said he was focused on the design centre, but would enter talks "an optimist". Opposition industry spokesman Kim Carr said the government's ideal of a self-reliant carmaking industry was a "free market fantasy". "It doesn't work like that. The automotive industry does not exist anywhere in the world without coinvestment from local governments," he said. Senator Carr said federal Labor's pre-election policy of providing an additional $500m to the automotive sector until 2020, and $300m per year thereafter, was the level of government investment required to guarantee Australian carmaking. The meeting between Mr Macfarlane, Mr Devereux and South Australian Labor Premier Jay Weatherill comes after Holden secured $15m in annual savings from a revised enterprise bargaining agreement with the company's 1700-strong Elizabeth workforce. The union agreed to a range of concessions, including a pay freeze, which Holden claimed was needed to secure the future investment. The carmaker had previously indicated a decision on government assistance would be needed before the Christmas shutdown period to allow retooling of the Elizabeth factory. But Mr Macfarlane said no government decision would be made until it received a preliminary report on the carmaking sector from the Productivity Commission, which he hoped could be completed within three months. "It is going to take some time," he said. "I'm going to ask GM in Detroit to be a little bit patient; I know they have got deadlines, I am doing my best. I will try to do something in the short term . . . just to keep everything going until we can get the final solution." Mr Devereux would not comment on when the company needed a final decision by. David Smith, the national secretary of the AMWU's vehicle division, said it was not possible for the sector to survive without taxpayer assistance. "It doesn't work like that in any other country in the world, so why would it work in Australia?" he said. Independent South Australian senator Nick Xenophon said he was confident Mr Macfarlane would secure a new co-investment deal. "This is not just about South Australia's interests, this is about the national interests," he said.  

Holden's Victorian workforce has resolved not to vote on a new workplace agreement that will decide the future of the carmaker's manufacturing operations in Australia.Today, 1700 employees at Holden's northern Adelaide manufacturing plant will vote on a revised enterprise bargaining agreement, which the company has said is needed to save $15 million annually and ensure it continues making cars in Australia beyond 2016.The vote comes as Holden unveils a new Korean-made compact sports utility model in Melbourne today. A “no” vote will mean Holden will not proceed with two next-generation vehicles in Australia, and the factory will close its doors during the next three years.A “yes” vote is the first condition needed for Holden to stay in Australia, but the company must still secure extra government funding to proceed with its $1 billion investment.Holden has said it would wait until after the federal election on September 7 before negotiating a new assistance package. Australian Manufacturing Workers Union national secretary for the vehicle division, Dave Smith, said the union in Victoria had resolved to abstain from the vote, meaning the South Australian vote today will determine whether to proceed with the new EBA.“The stewards want to respect the right of South Australian workers to determine their future,” Mr Smith said. AMWU South Australian secretary John Camillo said the move came after concerns were raised by the union about whether the EBA changes affecting South Australian workers would set a precedent for the Victorian workforce when it began negotiations on a new EBA next year. Holden has now resolved to split the EBA for the two states, the union said.The new agreement will scrap a planned 3 per cent pay increase scheduled for November, and will introduce new flexibility provisions for the company to respond to periods of slow demand. It will also cap redundancy payments for new staff and provide for new shift arrangements.Mr Camillo said that initial hostility against the changes had subsided, but he was still expecting a tight vote today. “I think it will just get over the line,” he said. Night-shift workers will vote at 6.30am (CST) and day-shift workers at 1.30pm.South Australian Premier Jay Weatherill said the decision would weigh heavily on workers' minds. “They're being asked to make a very significant sacrifice and contribution -- they may be concerned about the future prospects of Holden,” Mr Weatherill said.He said it would be devastating for the state if Holden closed. “Of course we'd have to grapple with it if that did prove to be the case,” he said. “This is a massive decision about the future structure of the South Australian economy. I don't think we should underestimate the significance of what's going to happen in the coming weeks and months as we try and settle this arrangement.”Opposition Treasury spokesman Joe Hockey yesterday said the Coalition would discuss future assistance to Holden if it won office. “We're not in the business of giving guarantees with taxpayers' money until we have all of the information in front of us,” he said. 

A survey of dealers by the Australian Automobile Dealers Association in the two weeks since the Prime Minister's July 16 announcement has found 75 per cent of about 160 members have had vehicle orders cancelled and 22 per cent reported more than 20 sales cancelled or postponed.Almost three-quarters of members said they would have to sack between one and five staff as a result of the sales slump. If this were extrapolated across the association's 3600 members, up to 13,500 jobs could be lost in the sector."With reduced car sales and the costs involved... those costs have to be absorbed by retailers,'' AADA chief executive Richard Dudley said.One of the only actions they could take was to make staff redundant "and we have been informed by many dealers that they will be looking at the potential of hundreds of job losses''.Mr Dudley took part in a teleconference with Chris Bowen on Tuesday night, along with the South Australian Motor Trade Association, to discuss the effects on industry. "The outcome of that meeting was nothing; our concerns are falling on deaf ears,'' he said.The preliminary survey results had been presented to the Treasurer but there was no indication the government was considering any changes to the tax clawback.Under the FBT crackdown motorists claiming business use for vehicles will have to fill out logbooks rather than rely on a statutory formula that calculates 20 per cent of the car use as personal.The new figures came as Transport Minister Anthony Albanese publicly disagreed with his South Australian Labor counterpart in Adelaide yesterday about the proposed changes.South Australian Transport Minister Tom Koutsantonis said he agreed with state Premier Jay Weatherill that the tax changes were bad for the automotive industry, and for Holden's carmaking plant in Adelaide."Friends are allowed to have different points of view,'' he said.Mr Albanese refused to acknowledge that the change would hurt the sector."Support for the car industry is very separate from people claiming something that they are not entitled to,'' he said. "If you don't understand there is a difference between individuals' claims on tax through the tax system and industry support for the automotive industry, then I'd suggest that you have a good look at what industry policy is and what tax policy is.''Mr Albanese, the Deputy Prime Minister, has previously accused the Premier of pre-election grandstanding in opposing the FBT changes.