Mobilising Workers Against Liberal Party Shows True Union Colours

NEWS that automotive workers will participate in an AMWU protest at the Liberal Party’s Victorian headquarters in Exhibition Street today is no surprise; it lays bare the union agenda in the face of worker disadvantage at Holden: the only party it apportions responsibility to is the Liberal Party, which should tear the scales from the eyes of those remaining sympathetic to its propaganda about the “rights and conditions of workers.”

There are other issues for us to discuss and we will do so later in the day, but I have read a report on a characteristic stunt the AMWU is set to pull in Melbourne this morning and I wanted to briefly pass comment.

I find it astonishing that after 20 years of striking enterprise agreements with major employers — agreements which, by dint of the rocketing cost of wages inflicted on those companies in real terms — anyone in the union movement would point to the Liberal Party as being responsible for the collapse and/or shutdown of those companies when their spiralling bases of costs force them to take tough and unpalatable decisions about their future.

After all, the Liberal Party is not a signatory to any of these agreements: that might seem like a ridiculous statement to make, but it’s not so daft upon consideration.

The union movement has just had six years of the friendliest environment it has enjoyed in the past 30 years under the Rudd-Gillard government, underpinned by the heavily pro-union Fair Work Act, and preceded by the gift of an industrial relations policy — WorkChoices — introduced by a Liberal government without a mandate, swiftly abolished after the defeat of that government in 2007.

The decision last week by General Motors to shut down its manufacturing operations in Australia was made progressively over a period of months and years, not days; it is factually and intellectually dishonest to suggest a conservative government elected three months ago is somehow fully to blame.

I agree with commentator sentiment in the business press that Toyota is likely to follow suit, taking a fair chunk of the automotive component industry with it. But such a development will be the result of the industry as a whole failing to provide efficiencies of scale to permit either to continue to operate on a commercial basis — not because of anything the Abbott government might or might not do.

Holden Australia boss Mike Devereux — in the understatement of the year — conceded yesterday that he had “probably been too soft” in dealing with the unions during his tenure at the helm of the car maker, which is tantamount to an admission the company had caved in to the extortionate demands of its unions in EBA negotiations.

And as we discussed yesterday, the Federal Court dismissed an application that would have allowed Toyota workers a vote on modifying their own EBA on the basis that to do so was illegal: a reality directly traceable to the Fair Work Act and to Gillard’s tenure as minister for Industrial Relations under Rudd.

Contrary to the AMWU’s assertions otherwise, the new Liberal government did not seek to abandon industry assistance for the automotive manufacturing sector; rather, its policy was to freeze such assistance. The precise location at which a line in the sand is drawn is always a subjective consideration, but a firm position that a particular industry will not be the beneficiary of an endless and increasing flow of government subsidy money is very much an elected government’s right to take.

That said — as we have discussed repeatedly over the past week — the seeds of the GMH announcement were sown on Gillard’s watch — not Tony Abbott’s.

It may seem a churlish distinction to make, but yet again the union movement is placing its own political agenda and its own welfare ahead of the interests of its workers: in the past week I haven’t heard a single union voice raised in criticism of anything the Rudd-Gillard government did, despite the fact that the GM decision clearly was under consideration for much of the period of that government.

I make the point that a ten-week old conservative government inherited that process at the very end of its gestation: if this decision had been announced prior to the election, General Motors would have rightly been accused of interfering in Australia’s electoral politics just as the unions now seek to turn the decision against the Liberal Party.

I also make the point that irrespective of who is in government — be they Labor or Liberal — the day Australia’s car manufacturers closed up shop in Australia was inevitable.

One thing that is obvious in the face of that reality is that the union movement hasn’t done much to prepare for that inevitable moment arriving: the only thing they have to offer is to lash out at their usual target, with their usual propaganda, and in the meantime, the real interests of their workers are ignored.

There will, no doubt, be images of a mottled and rag-tag pack descending on the Liberals’ offices in Melbourne, disrupting traffic and inconveniencing those going about their business, beamed across the country in all the news feeds over the next 24 hours.

I caution readers to recognise it for what it is: the AMWU seeking to exploit the predicament of their members, cynically and opportunistically, to score points in a fight that will not make a jot of difference to anything that has transpired in the car industry over the past week.

Perhaps a more constructive approach might be for the unions to spend their Christmas break bunkered down with leaders in the industries they represent, workshopping long-term strategies to help facilitate the retraining and/or redeployment of those affected by the shakeout in the automotive sector that is still in its infancy.

The reality, however, is that such a prospect would be too much to ask; it’s far simpler to take pot shots at the Liberals, and deny all responsibility.

It makes you wonder what benefit there is in joining a union at all, really, although that’s not a dilemma I’ve ever had to come to a reconciliation with myself over for indulging in it in the first place.

 

 

Holden Fallout: Abbott Will Need Pepper On His Gloves

THE MOTHER of all political brawls will explode today following Holden’s confirmation it will close its Australian operations — or at least, it should. Labor and the unions have already started their media offensive to pin this on the government; given the unions are ultimately responsible for pushing the unsustainable Holden business over the edge with their wage claims, the Liberals should not just defend themselves, but crucify them, and Labor too.

Over the past few days, we have spent a great deal of time discussing both the likely outcome of the situation at Holden — which eventuated yesterday as expected — and the wider issue of collective bargaining agreements struck with trade unions in this country, as well as some of the more coercive, disruptive tactics the unions have variously employed and their consequences.

There is a story being told — already — that cannot be permitted to stand unchallenged, unanswered, or indeed left unrefuted.

It emanates from the ALP and the union movement, predictably enough; the short version is that the Labor Party is blameless, and free of any blood on its metaphoric lily-white hands; the union movement has simply seen to it that its members have been properly paid at a reasonable rate.

Alas, the reality could not be further from the truth.

This idiot-simple and insultingly dishonest fairy tale seems to be predicated on a half-articulated suggestion that the pot of subsidy money is endless, and that the ALP would not have shied from using it; the implication is that the new conservative government should have continued to throw ever-increasing amounts of what is little more than ransom money at a sector whose enterprise bargaining agreements consume it faster than it can be thrown.

If readers doubt this at all, the sterling Grace Collier at The Australian has published the latest EBAs for both Holden and Toyota in her column today; they make for truly horrifying reading to anyone with a shred of economic nous, or who has ever attempted to run a business, or for anyone with so much as a grain of old-fashioned common sense.

One of the early arguments I have heard being put about by ALP/union types, even this early in the piece, is that businesses run by “managers with MBAs” have to accept responsibility for striking the agreements with unions in the first place. It’s akin to suggesting — to borrow a line from the immortal political movie Don’s Party — that one ought to eat shit in case it tastes like watermelon.

Nonetheless, such a suggestion tends to fly in the face of the brutal tactics unions are shameless in utilising in pursuit of their demands; and the Toyota agreement gives the game away, with its requirement that a union representative must sit in on all recruiting interviews, as Collier notes.

It has been widely documented in the media over the past few weeks — even over at Fairfax — that the decision by General Motors to shut its Australian operations was made some time ago; having digesting copious reports and accounts of this, it seems to me the timing lies in about early October. That’s a very big clue that a three-week old conservative government had little to do with the decision.

Indeed, Holden has kept the ruse alive simply to buy it time, with an eye on spreading the writedown of its closing businesses internationally; this, too, is a well known fact, and in that context the pressure from senior Abbott government ministers on Holden to disclose its decision can scarcely be regarded as unreasonable.

In fact, Holden kept its hand extended whilst maintaining the charade that it wouldn’t shut up shop here: no government in its right mind was ever going to dole out millions of dollars in additional subsidies on such a basis and in such a climate, no matter what the likes of the ALP might decree.

The issue — for senior GM executives in Detroit, from its chairman down — has been the cost differential, of some $3,800 per car, between building vehicles at its Australian plants and building them internationally.

And that difference — to put it bluntly — is the cost of high wages paid to an internationally uncompetitive, low-productivity domestic workforce.

Union-negotiated wage agreements have everything to do with this decision, and to suggest otherwise as the ALP and the unions are already seeking to do is, frankly, to lie about it.

Yet some figures within those organisations clearly sense their vulnerability to a public brutalisation for their tactics: opposition “leader” Bill Shorten said the government had ”driven the Australian car industry into the biggest car crash in the nation’s history,”¬†while acting ALP leader Tanya Plibersek told Parliament the Liberal Party had “got what it wanted.” ACTU chief Dave Oliver accused the government of “running Holden out of town.”

They are getting in first because they are worried about the consequences of facing a properly executed, all out assault.

They are right to be worried.

Without putting too fine a point on it, the new federal government has little choice but to pick a fight here; Labor (and by extension, the trade unions) have shown time and again their mastery of running propaganda campaigns: the $13 million WorkChoices scare funded by the unions, that substantially achieved the ejection of the Howard government in 2007 is an excellent case in point.

It simply isn’t enough to argue that people have lost their jobs, and that families and communities will be hard hit in this case: the unions have already seen to it that their members will scarcely want for much.

And it is simply offensive to suggest that a government holding office for the metaphoric five minutes has sat on its hands, idly, and actually egged Holden’s departure on: for a decision of this kind to have been made eight weeks ago, a lot of time and planning had gone into it at the corporate level at General Motors over a period of years — a reality that reflects very poorly indeed on the previous Rudd-Gillard Labor government (which, ironically, created the industrial relations environment that gave free rein to the abuse of bargaining power we are now beginning to see the consequences of).

But left to mount its arguments — unchallenged, and without a sustained counterattack that inflicts mortal damage — this single issue has the potential to poison the Abbott government’s tenure in office and destroy the Liberal Party’s election prospects, starting at the state level in South Australia and Victoria next year.

And with the departure of Toyota now accepted in many quarters as a foregone conclusion, and the likelihood of something happening at Qantas that will send the ALP/ACTU axis into convulsions of rage at a convenient conservative scapegoat, allowing those arguments to stand could prove fatal to the Abbott government itself when it next faces the people.

It’s time for Tony Abbott to dust off his boxing gloves, so to speak, and to attack the union barrage head on: his opponents will be ruthless, relentless and remorseless, and he owes it to the millions of Australians who explicitly voted against governance of this kind to ensure that ALP/ACTU credibility on this issue is smashed.

The alternative is to legitimise not only the ALP/ACTU case (against the backdrop of a steady drip feed of announcements very similar to yesterday’s), but to legitimise Labor as a governing force and the unions and their tactics as an acceptable mainstay of the Australian industrial relations landscape.

Were that to occur, a truly reprehensible violence against the national interest would have been committed, and all for the lack of the will to stand.

Make no mistake, Holden — and even Toyota and Qantas, if you’re a pessimist — is just the tip of the iceberg.

It is not the time for shrinking violets, nor a lack of intestinal fortitude. Abbott must hit hard in the face of this assault, and must aim to destroy.

 

BREAKING: GMH Confirms Holden To Quit Australia

IN A MOVE that surprises nobody, General Motors has confirmed that Holden will cease all automotive manufacturing in Australia from 2017; the move comes after lengthy speculation that the decision was made weeks ago, and — as we discussed earlier today — responsibility for the closure must be laid squarely at the feet of the union movement.

It is understood that staff at Holden’s plants in Adelaide and Melbourne have been summoned to a snap 2pm meeting, at which the decision to close down the company’s manufacturing operations will be formally announced to the company’s staff.

Key figures in state governments in South Australia and Victoria were reportedly notified earlier today.

And in a move reminiscent of a similar announcement by Ford earlier this year, the decision to quit is being made three years prior to becoming effective, with GMH to shut its Australian operations with effect from early 2017.

I reiterate the position this column has taken in recent days that responsibility for the closures must ultimately be shouldered by the unions, whose collective bargaining agreements and other anti-business shenanigans have made it far too expensive for even “moderate” levels of government support to permit the company’s Australian operations to remain viable.

Readers who haven’t yet seen the articles dealing with the topic can access them here and here.

Clearly, there has been an inordinate amount of information selectively leaked to the press in relation to GMH’s imminent closure of its Australian operations, so it remains to be seen how much additional information of substance — if any — is forthcoming as a result of today’s developments.

Even so, we’ll keep an eye on what transpires at GMH through the afternoon, and if it seems warranted, I will comment further later in the day or this evening.

 

Car Crash: Good Riddance To GMH If It Quits Australia

SOME WILL TAKE exception to this article, and so be it; there are reports General Motors has decided to withdraw from automotive manufacturing in Australia by 2016 unless it gets more money from the Abbott government; despite the death knell Holden’s departure would sound for car making in Australia it should get out, and good riddance to it.

The Weekend Australian is reporting that a decision by GMH to close three of its car manufacturing plants internationally was signed off by its headquarters in Detroit last month, but that the official announcement of its withdrawal from Australia has been deferred until after Christmas to allow the company to spread the multi-billion dollar writedowns across its balance sheet.

And that cavalier accounting decision pretty much sums it up.

Of course, the company is denying any such decision has been made; it is said — to quote the Australian — that Holden is being “cut some slack.” But only to allow it to take one final shot at wringing more money out of Australian taxpayers.

Tens of billions of dollars have been gifted to car manufacturers over a period of decades to induce them to maintain operations in Australia, and for what?

Leyland left decades ago, whilst Chrysler/Mitsubishi is also long gone; Ford has already announced it’s going in a couple of years’ time, and the departure of GMH means it will take what’s left of the car making sector in Australia with it: even if Toyota was inclined to remain, a single manufacturer lacks the critical mass to support parts makers, suppliers of accessories, and all the other secondary businesses dependent on the automotive manufacturing industry to remain viable — irrespective of whether it’s subsidised or not.

Commonwealth governments — of both Liberal and ALP varieties, to be clear — have gone to extraordinary lengths to foster and perpetuate a mentality in the car manufacturing industry that demands an ever-increasing “entitlement” to huge amounts of taxpayer money, always with the barely veiled threat of closure held over the government of the day like a gun to its collective head.

And as night follows day, governments have capitulated; it says a lot that a government run by the likes of John Howard and Peter Costello was the worst single culprit for shovelling industry protection and subsidies all over the car makers like confetti.

Yet in a modernising and globalised world, plenty of other industries have either failed, become obsolete, or seen their workforces stripped and relocated to places like Bangladesh, Thailand, or the Philippines; in most cases these failures or mass job losses have been permitted to occur with little intervention from the government sector — even on Labor’s watch — and the handful of times “bailouts” do occur, they are roundly condemned and turned into political footballs by all and sundry.

Australia, to put none too fine a point on it, never really had its “own” car manufacturing sector; every car ever built in this country was made in a factory owned and operated by a foreign multinational. The national chauvinism of protecting “our” car industry is based on a false premise. It is an industry that, structurally, was never profitable in its own right in this country. And in recent years, and as that reality (even propped up by taxpayers) has moved from undeniable to inescapable, one by one the multinationals have closed up and left.

Many people will be screaming at me at this point: the tens of thousands of jobs that stand to be lost if car manufacturing vanishes from Australian shores makes what I am saying truly abominable, reprehensible, amoral. Surely, I should hold my tongue and hang my head in shame?

I would counter with three points.

One, the government isn’t in the business of making cars, and nor should it be; if state-protected car makers fail and/or close, a huge contingent of that displaced workforce will be absorbed by foreign car makers whose sales and service presence in Australia will need to expand to fill the void, and others may be able to reskill to take on other opportunities in the car industry or elsewhere.

Two, all those businesses and industries that have been allowed to fail, or have been superseded, failed to elicit tens of billions of government dollars to prop them up indefinitely: governments may well have been prepared to intervene to protect the jobs of workers in unviable automotive businesses, but in doing so send the terrible signal that those thrown onto the street in businesses and industries that didn’t attract such largesse were — and are — that little bit less valuable.

And three, those who make the most noise about “protecting jobs and conditions of working Australians” — unions — bear the largest single share of the responsibility for the car makers ultimately being unable to remain commercially feasible, even with billions of dollars raked out of taxpayer-funded drain pipes: unionised workforces, especially in the car sector, may indeed enjoy high real wages, penalty rates, allowances, loadings, bonuses, and blah blah blah…but in the end, they price themselves out of the market.

I suggest all readers have a look at this programme, viewing a three-minute segment commencing at the 39:30 mark: the speaker is Sir Keith Joseph, Industry minister under Margaret Thatcher, and the segment is illustrative of my point. Joseph is talking about unionised British state monopolies in the 1970s such as British Steel, although in the wider context of this programme there is an indirect link to Australian car manufacturing through British Leyland, which withdrew from Australia as a direct result of the exact phenomenon I am talking about — the unionised workforce had, in Joseph’s words, “priced itself out of the market.”

The logical end consequence of any trade union that is successful in prosecuting its stated objective of advancing pay and conditions of its constituent worker group is that the business which pays those ever-increasing demands must fail; so it is in the automotive sector (but again, we could just as easily be talking about, say, QANTAS — and barring unforeseens, in the next couple of days, we will be).

Of course, the automotive sector has received much, much more assistance to skew the market in its favour than a mere endless funnel of taxpayer cash.

Government car fleets lavish preferment on the local car making industry; sometimes with exclusive supply contracts, sometimes with hefty “local manufacture” quotas, but in any case relegating considerations of value for money very much to the status of a secondary concern.

It receives further protection by way of tariffs and import duties being applied to automotive imports.

And those imported cars are further disadvantaged in the market by a luxury car tax that cuts in at a ridiculously low value, currently just over $60,000; taking into account the fact that you can spend close to that on a new Commodore with a couple of options attached to it, it doesn’t take a rocket scientist to recognise this tax as just another protectionist measure to distort new car sales in favour of so-called local manufacturers.

Remove the tariffs, the import duties, the luxury car tax, and open the option of bulk government purchasing and leasing to include offshore manufacturers, and Australians will be well-served in a car market offering choice, at reasonable price points, and for vehicles built to suitable safety standards.

Prime Minister Tony Abbott was absolutely correct in his position prior to the September election to refuse any additional handouts to the car manufacturing industry beyond the $500 million already on the table between now and 2017; by contrast, The Weekend Australian notes that Holden’s stay of proceedings insofar as closing its Adelaide plant is concerned is made with the aspiration to realise eventual “annual ‘rent’ payments” to continue operations, and that aspiration should be met with the contempt it deserves.

This has gone on quite long enough; if automotive manufacturing dies out in this country during the Liberal Party’s tenure in office it will be no fault of the Abbott government: indeed, the removal of this particular market distortion, and the accompanying correction it would have forced on the labour market, should have occurred years ago.

The GMH decision, in any case, was made before the new government even jumped out of the barrier.

And short of nationalising the industry, it is doubtful the government could do anything other than stave off the inevitable — with buckets more cash — if it wanted to.

I understand that there is a lot of misty-eyed sentimentality around this issue: after all, a Holden was “Australia’s First Car” back in 1948, and like any legend allowed to grow and evolve, this one took on a life of its own — captivating millions of enthusiasts along the way.

In the final analysis, however, Holden was always a branch office of an American multinational, and General Motors has added precisely nothing to Australia for many years; even now, at five minutes to midnight, it still has its hand out, saying “I want” and “give me” to a new government elected on a platform of ending freebies for car makers.

General Motors — along with all the other foreign rent seekers in the car industry looking to use the Australian taxpayer to prop up businesses that by rights should have ceased to exist years ago — should now peddle their extortionate demands somewhere else, and good riddance to them when they leave our shores to do so.