"In Australia the car industry was unique," says the UNSW Business School's Tim Harcourt, who was an economic adviser to the Bracks Review of Australia's Automotive Industry. "It has unique Australian characteristics and capabilities, and its closure is a self-inflicted wound."
When Holden closes its Elizabeth factory in South Australia at the end of this week, it will spell the end of a manufacturing company that began in Adelaide more than 150 years ago.
Tim Harcourt, the J.W. Nevile Fellow in Economics at the UNSW is available to discuss Holden's exit, and says "the exit of Holden from Australia really symbolises the way the Australian economy has now moved on from the days when the country was a manufacturer, and is now unbalanced with its dependence on the resources sector."
"The exit of Holden is very sad, and really signals the death knell of car making in Australia. In hindsight we should have focused on export orientation and trade promotion, supporting the free trade agreements, and building on our export success in Asia and the Middle East and emerging markets."
In 2008, he was with Steve Bracks who was under pressure to halt the scheduled tariffs cuts in the industry set up by the legendary industry minister John Button in the Hawke Government. "When we were in Bangkok, the pressure was at its hottest to freeze tariffs. But Steve bravely resisted the pressure."
"When I was on the Bracks Review, I made it clear the government could intervene with tariffs or support, but despite the options changes in the global economy had a huge impact Australian car industry. One crucial issue was until recently was the very high Australian dollar which would have wiped out any impact of a tariff freeze, and the protectionist lobby would have only had a pyrrhic victory of a few months if tariffs had been imposed."
Tim Harcourt says the Bracks review did three things. First, it held the line on tariff reductions. It provided an overhaul of Automotive Competitiveness and Investment Scheme. And it restructured the industry's role in global supply chains.
"I recall a former Australian ambassador in Washington, loudly and proudly telling an American audience that the optimal number or car companies in Australia is zero. Fortunately, Bracks, like Button before him, eschewed both extremes and advocated a moderate path of reform for the industry."
"This steady reform is what we should have had; instead, we had Toyota, Ford, and now Holden falling like dominos. If only Australia had held it's nerve the car industry might have just hung on. And taking advantage of new innovation in hybrids, driverless cars etc. Alas maintenance of manufacturing and the constant changing of policy gears as global economic and environmental conditions change was very important. Australia failed. To hang out the car industry to dry is very sad."
For further comment call Tim Harcourt on 02 9385 3816, 0408 485 479, or Email
Media contact: Julian Lorkin: 02 9385 9887