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Interview with 2GB Drive

22 December 2016

Michael McLaren

Subject: Opening of Ford’s Asia Pacific Product Development Centre; Alcoa



Greg Hunt, a good day for Australian manufacturing.

GREG HUNT:         

And g'day Mike. A really important day for Australia, and the reason why is because it was the Ford CEO, came and committed to Ford being in Australia for the long term, and that was coupled with a $450 million investment in innovation next year alone.

So $450 million one year, but obviously it's going to be a very significant long term commitment, and they'll be employing all up 2000 people, the vast bulk of whom will be in design, innovation, R&D.

So these are real jobs with very significant funding and a long term commitment, and it comes six weeks after we visited Ford headquarters in Dearborn, Michigan, just near Detroit and made that case, so we're really happy about that.


It is good news. At the announcement today you said that the future of advance manufacturing in Australia lies in value-adding activities from product concept, research and development design and efficient production systems.

This seems to be the future for Australian manufacturing if we can tap it, that is, advanced manufacturing. This is, I suppose, opposed to the old ways of just normal manufacturing.

GREG HUNT:         

Look, it is. What do I get from around the world? People say gosh, your workers are incredibly smart and bright.

The thing about Australians is they're innovative, it means they're creative, they come up with solutions. And so you'll find, whether you're in Ford or in the General Motors headquarters, they've got Australians right at the top who are playing a critical role.

Only the seventh ever GM global head of design is an Australian.

With Ford, I asked them what is it about Australia that would give you a long-term future, and they said bright young people coming through the trade schools and the universities who want to work in design and engineering.

They said that talent flow, and that's the thing we're working on. As part of that, they've now come and committed to the long term for Australia, and it says we're going to have a really important role in that advanced manufacturing and design and R&D.


With that established though, I wouldn't mind your opinion on this, did we make a mistake from the Button Plan on basically jettisoning traditional manufacturing?

You know, shirts are still made somewhere in the world, people still need shoes made and cars made and pencils made and everything else. They're still being made, they're just not being made here.

When we look at the jobs that have gone, have we made a mistake over the last 40 years with our ideology and globalisation thrust and watching these factories go abroad?

GREG HUNT:         

The only way to keep jobs in Australia and to create jobs is to be world-class competitive because, say in the car sector, there was, believe it or not, $7 billion of government money that went to the big car manufacturers from 2000 to 2015.


Sure, but if you take Germany, sorry to interrupt you, Greg. But if you take Germany for example, I mean, they would've given tens of billions of dollars, the Americans gave billions.

I mean, everywhere where there is car manufacturing there is government protection or money given.

GREG HUNT:         

Well what happened of course is in the end the car manufacturers said it's too small a market and too high a cost.

But what are we really good at? We are incredibly good at the design and the engineering, and in fact they've taken a lot of their manufacturing team across.

So sometimes people will say this is just for those who have advanced degrees in engineering, they've brought a lot of their mechanics, they've brought a lot of people from the manufacturing side across who just know cars, and they're putting them in the design and the innovation and the testing side.         

So what's my answer? I think we can have a very significant manufacturing future, but to do that we've got to be competitive.

And what I'm seeing is young people in firms all around the country who are building the next wave of manufacturing.

Let me give you an example, here on the Mornington Peninsula there's a firm called SEALITE Navigation.

It, believe it or not, provides navigation beacons and aviation beacons, so drop-in emergency airfield lighting, to the US defence force. So you'd imagine the toughest, pickiest customer in the world, and they're going…100 to 200 jobs. And there are stories like that all around Australia.


But with all of that said, I suppose there are people- note the news of the week regarding the submarines, $50-odd billion being tipped in there.

We're paying a premium to have them made here, let's not beat around the bush. So people have asked me this week, well, we understand why the Government got rid of funds and protections and whatever loans to the car industry, but with that logic why did they then go and support the submarines being made in South Australia?

I mean, there does seem to be a bit of a, I don't have a problem with the subs being made in South Australia personally, I think it's a strategic industry, but arguably so is automotive manufacturing. So why support one and not the other?

GREG HUNT:         

So one of the misconceptions, and I absolutely understand why it may be thought, is that there was a removal of funding to the car industry.

In fact the programs were continuing, but the auto makers just gradually said, you know, you need a line of 100,000 vehicles for it to be profitable.

The demand in Australia for the highest selling vehicle is, you know, really just a fraction of that because we've got an incredibly diverse market, consumers get cheap and cheaper cars and a wider range.

And so no amount of Government money was actually going to keep them here.         

However, in the case of the submarines, you know, this is a strategic program and so the decision was made very specifically, by Malcolm Turnbull and the Cabinet, to build them in Australia and that will actually create a lot of high tech spin off industries as well as the direct construction jobs.


So, hand on heart, it had nothing to do with polling in South Australia, which suggested that Nick Xenophon, Labor, and others were going to take a whole lot of seats, including Christopher Pyne's?

GREG HUNT:         

Look, Nick Xenophon …


Hand on heart?


Won a lot of votes. I can guarantee, though, that this decision, and I know, about the Cabinet, it was made on the basis of what's the long term strategic interest for Australia, and having the capacity with the most complex defence equipment to do two things.

Own and be engaged in the process so that our people, when they have to maintain, when they have to upgrade, are right at the heart of the process, and the economic benefit to South Australia, but right across Australia, of such a high tech build. Put them together, and that's why the decision was made.


Fine. But good news today from Ford.      

Just finally before you go, I obviously have to ask you, being a Cabinet minister, regarding the story, I think it's a bit of a beat up, but nonetheless the story floating around in the front of the page The Australian today saying Cory Bernardi might be considering going a bit rogue and creating the Australian Conservatives.

I spoke to the former Victoria Premier Jeff Kennett earlier, that basically said he could walk down - not Jeff, but Cory could walk naked down Martin Place in Sydney and no one would know who he was.

I think his profile's a little better than that, clothed or otherwise but even if this is a bit of a beat up, it is true, isn't it Greg, that there, I don't know if since Malcolm Turnbull, I think even since Tony Abbott a bit, there is a group of Australian voters, they've been calling and emailing me today, I can tell you, dissatisfied with the way that the Coalition is governing, particularly on social issues, that are, you know, ready for a Trump, if I can put it that way.

They're ready to move their vote. It might be to Pauline Hanson, it might be to a new formed Australian conservative movement. They won't win the Lower House, but if they win four senators or five senators, they control Parliament, really. So bit nervous about it?

GREG HUNT:         

This is a very important question. Let me speak directly to those people, because I have a deep respect for their concerns and what I would say is, in the last six months since the election, you look and you see really important pieces of legislation that go straight to the heart of core conservative values being passed, cleaning up union thuggery, cleaning up building sites, taking on causes that were just either too tough or too difficult in the past in Victoria.

And one of the reasons why I think we did extremely well in Victoria, we stood up for the rights of the fire service volunteers, what we call the CFA or I think you call the RFS.          

And you know, standing up for those, as well as making very significant Budget savings, these are really core conservative values and things which have been delivered only in the last few months and, you know, in my space, what we're doing is we're looking after and protecting firms such as Alcoa in Portland. The Greens are trying to see aluminium production off Australia's shores.


Look, they're pretty mad. They're pretty mad. We know that. But look, Liberal, National voters aren't even going to vote for them.

GREG HUNT:         

No, no, no. But I think what they want to see is exactly your point, about standing up for Australian industry and we are doing that. You know, I have literally stepped off a plane this morning having flown 24 hours to New York, been on the ground in New York for 24 hours, and come back to stand up for the Australian aluminium sector.

And look, I am hopeful that we will get a positive result, companies are in discussions. And the same with going to Korea to fight for the future at the Whyalla steel plant.

So steel and aluminium. Making things, the most basic part of making things. I can't speak for the past, but I can tell you that, you know, on my watch and working very closely with the PM, he is absolutely focused on being a country that makes things.

And so it's a fair question you ask, and I want to speak directly to that, you know, very, very, very significant group of people who want to see real conservative values in action.

And whether it's the unions, the Budget, or standing up for Australian firms and people who make things in Australia, we're really going hard at it.


Well, I'm glad you've spoken directly to them. Greg Hunt, thanks for your time. Look, I'll let you go get some kip, you've been on all those flights. You have a merry Christmas.

GREG HUNT:         

Cheers, thanks very much.


My pleasure. Greg Hunt there, the Minister for Industry, Innovation, and Science.