The Pickering Post
Friday, 25th May 2018

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PROPPING UP A FAILING INDUSTRY

Larry Pickering

Four-time Walkley Award winning political commentator and Churchill Fellow, has returned to the fray over concern that the integrity of news dissemination is continually being threatened by a partisan media.

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In a regional centre in the Soviet Union in the 1950s a manufacturer of glass tumblers had a small problem. The glass tumblers were of excellent quality and the company had successfully traded for over a century

The regional centre had become entirely dependent on the tumbler factory as it employed 100 of the locals including apprentices.

The locals of course spent their wages at the general store, the bakery and the butcher and all was well in the micro financial village until... well, until other soviet States simply stopped buying their tumblers.

The factory was owned by a nice man called Ivan who would never even consider sacking one of his loyal workers. So the factory continued to manufacture unsaleable tumblers until there was nowhere left to store them.

Ivan went to the bank and borrowed money to build warehouses to store the tumblers. The village continued to prosper.

After a few years Ivan knew he had a problem when, after having built four large warehouses, he was again out of storage space and the bank was sending him nervous letters.

Ivan knew he had to do something so he engaged a Swiss business management consultant.

When the consultant arrived, Ivan told him he was prepared to do anything to rescue his business except lay off his employees, which would mean the death of the village.

The consultant spent a whole day going through Ivan’s factory and books and finally sat Ivan down that evening to relay his simple advice.

"Tomorrow you must tell your loyal staff to stay home on full pay until further notice."

Ivan followed his advice.

His manufacturing costs immediately vanished. He didn’t need to borrow more money for warehouses.

His backlog of stock started to slowly diminish and he was able to sell his warehouses as they progressively emptied. After a few years he was able to ask his staff to return to work.

Many had retired and his apprentices had moved to other villages. But the numbers were exactly right to satisfy the smaller demand for his tumblers.

He was able to repay the bank and most important of all not one of his employees had been sacked. The village remained, replete with Ivan’s now thriving tumbler factory.

I was told this was a true story. I don't know.

Our successive Governments’ bankrolling of inefficient industries to save jobs prompted me to recall this story.

When a government doesn’t require $2 billion of taxpayer funds to be repaid by a motor car company who can’t sell motor cars, it has to end in tears.

The industry, the jobs and the money are eventually lost to another inviting Government with more money.

But one thing is certain, this company will continue to produce motor cars until this Government runs out of money... or has it already?



Comments

The Australian car manufacturing industry looks like going to the wall in the near future, I wonder why? Sure, the high Australian dollar is somewhat responsible, but nothing to be compared with manufacturing costs, thanks to Ludwig, Shorten et el. Another industry stuffed by unions and their excessive demands on manufactures, just for the financial security of a few Union officials. Manufacturing has become all too hard in Australia, hence the exodus to offshore countries.Pity Maggie Thatcher has passed on, she would have fixes these union thugs up real quick.

Renault 16, great hippy cart back in the 70's, but aren't they French? like Peugot? mon ami

Dead right. Think Angus & Malcolm Young, Jimmy Barnes etc, all from Elizabeth.

...no "jomac"...unions are not essential...all you need is an association...voluntary joining...based on company only not industry...no strikes allowed...if you don't like your lot...and the association can't help...you have the right to resign...if the company is bad...most in the company will resign...you don't have a right to picket...but certainly a right to tell everyone how one is treated or conditions...if really bad...no one apply for jobs...if they do...its at their own peril...its because everyone sees the world differently...some may like the conditions...then some may not...but no one has the right to willfully damage the company through strikes and secondary boycotts...a company that would make anyone work in conditions you mentioned in India as an example....just would not last...in fact would never be allowed to operate...you say Australia needs a government that puts Australia and its people first...well saying neither government is a cop out...you know very well it will never be the scum-bag communist Labor/Greens that will look after Australia and its citizens....just look at the last 5 years...only Liberals have a vested interest in Australia and its people.....

Apologies to Margaret Thatcher but this government will keep spending till it runs out of other people's money.

Commos can't help them selves snout in troughs is and incurable communist malady

Great comments jumbo lloyd and totally agree. Spent 30 years in the auto industry and can say that effectively the Unions in collaboration with Government have killed the goose that laid the golden eggs!! Unions are outdated organisations in todays corporate world and should be abolished!!

....well yes....there is a few sides to the problem of GM-H and manufacturing in general in Australia...."jomac" has hit on these points that beset not only GM-H but all manufacturing all over...its a dire warning....that we cannot go on as we have been going...the problem is that we have a communist government that is only interested in its own survival...and thus pouring in money into GM-H and other car manufacturers is only to prop up and protect heavily unionized jobs in this manufacturing sector....don't forget...there are many support manufacturing companies that supply parts etc for the car manufacturing industry...unfortunately...Australia is an economic island with a high standard of living surrounded by basically "s**t-hole" countries with a low living standards out in the middle of nowhere with a population of 22 million...the U.S. is surrounded by a population of something like 400 million...anything in Europe and being a part of the E.U. you have a population in excess of 500 million...all with about the same living standard as their neighbours...unfortunately we in Australia cannot compete with manufacturing in Asia and the Sub-Continent...and if we don't do something soon we will end up a nation of "basket-weavers" and then someone will be able to weave baskets cheaper than us...we must be able to re-structure our industries in any sector with the ability to by-pass the union stranglehold...I would love to see in this country what Americans have in the form of "Chapter 11" bankruptcy provision...in this case...GM-H could go voluntary into "Chapter 11"...which means all bets are off...all contracts, benefits, arrangements, creditors are put on hold....no one can do anything...company under the direction of the court...will restructure and re-negotiate new labour contracts and rearrange their debt and then after a certain time comes out of "Chapter 11" and proceeds under a new slimmed trimmed and more efficient business model...I've always maintained...unions are our biggest obstacle to our future prosperity...look at the state Britain was in the late 70's under these bloody minded communist bastards....we are losing jobs everyday...anything that can be made overseas and imported will eventually move out...look at the call centers...the only jobs that will be secure if you can call it that will be where the person must be physically be here in this country...otherwise...if I had a manufacturing business....I'd be off in a flash and not have to put up with unions and FWA and a myriad of rules and regulations that make you loose your mind....we need to get rid of this government real fast as we are already in deep trouble....

Maybe Holden should start remaking iconic FJ and FX models with modern running gear. Certainly would sell more units. Moulds probably still in place.

Jomac does it help to know that a 57 years old mate of mine (bank manager) did not know how to change a flat tyre on his car?
His wife had to show him.
Perhaps it has something to do with the banks.
Cheers

Labor's Lies & Awkward moments!

http://www.youtube.com/watch?v=3ijuzQWU9Ko

Those commenting about Keating you are spot on, there never was a level playing field and we were always going to be up against it with his lunatic ideas.

Keating wrongly believed that every body would play fair to get a slice of the pie and it did not work that way.

We opened our gates, most others pretended to do so but it was never the same again.

In the interim we lost hundreds of high quality manufacturing businesses either busted or moved off shore to remain viable.
What was manufactured here in Australia was mostly world class of high quality.

Additionally, one of the biggest problems our manufacturing has ever faced is the impact of unions. Unions are actually responsible for the demise of around 50% of our manufacturing.

You can never compete being held back by outdated work practices killing productivity with unions incapable of any more that 1950's thinking.
We use taxpayers money to prop up industry, but governments never take on the cause of the problem, which is usually because of union domination and control.

In the USA Toyota is highly successful because it set up its manufacturing plant in the South of the US away from the highly unionised manufacturing in the north especially Detroit.

It was the Unions that destroyed General motors in the USA. Assembly line workers at GM were on astronomical hourly rates that the company could no longer sustain when the GFC killed car sales.

It my belief that over the years the unions in this country have done far more harmthan good.

ahh ha lol looky what I found tha Bonnie `n` clyde .
Beach Boy`s
Cheery Coupe .
http://www.youtube.com/watch?v=13_EMZujNNU&feature=endscreen&NR=1
Shared 4 `Ol time sake.

To me, Keating was a condescending arsehole but he has gone up in my estimations of late, at least he keeps his gob shut, unlike the Pisshead and Mad Mal Fraser who should both realise they are totally irrelevant in this day and age and have fallen back a place as worst PM ever after the Red Witch.

Hawke is nothing but a Leech on society.

Well Turnbull's plan quite some time ago was billions of dollars less than Conroy's errors - more quickly processed too - but what do you expect from this idiot conroy who knows what? And we pay this clown?

Labour have never been any different - and this current government is the worst we have every had in our political history - Gillard will do her best to make our great country socialistic - hasn't anyone told her communism went out the back door in the 50's?

this how bright i think these pricks are ,we have been propping the auto industry for years and it,s not going to get better the car mob in aust are crying about cheap imports , and where are they coming from 1 CHINA 2 INDIA 3 sth korea and who are biggest polluters and dont have stupid CARBON TAX CHINA AND INDIA, if sense was made from latex this mob would not have enough to make a french letter for a blowfly

May I ask R H who was the Coolgardie mine founder please.
I might have missed the answer.

Well, he is a LABOUR minister don't forget - they are all liars, spendthrifts, useless, and of course he didn't answer a question, as apart from the fact he wouldn't know the answers, has to ignore them. Useless prat, like the rest of them in the labour government - oh, but that's OK - just spend another $90B of the taxpayers money on yet another stupid mistake as he the knowithall about anything.

Listening to Simon Crean the other day, and the only thing first and foremost was the bloody party. As usual the country and her people came last. The party the party the party, gawd I am sick of hearing about the bloody party.