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Interview with Leigh Sales, 7:30 ABC

11 December 2013

Subject: Holden closure

E&OE

JOURNALIST: Ian Macfarlane thank you for your time.

IAN MACFARLANE: Pleasure Leigh.

JOURNALIST: Did the Federal Government bully Holden into making this move as the opposition suggests?

IAN MACFARLANE: No we didn’t. We had a process which I began as soon as I was sworn in as Minister to work through this in a methodical way. Holden were aware of that timetable from day one as was Toyota and the component industry and we were well into that process. As everyone knew that process wasn’t going to come to completion until the PC reported in late March and the Government had time to consider that report.

JOURNALIST: But, then in that case if you wanted the process to be worked through in a methodical way why were your colleagues from the Prime Minister down pressuring Holden in recent days to announce a decision one way or the other?

IAN MACFARLANE:  Well as the Acting Prime Minister said, he wanted to clarify some uncertainty that existed there but the process was still moving forward and will still continue to move forward. The Productivity Commission will still report next week and again at the end of January and again at the end of March. While this has made the situation more difficult in terms of sustaining the car industry in Australia, the Government is still working towards an outcome whereby we re- position the industry for a long term future.           

JOURNALIST: But there is a contradiction there isn’t there? In that you’re saying there is a methodical process that we were working through and we wanted Holden to wait until the end of that but then you had senior Government figures demanding that Holden say one way or another whether they were staying in Australia pre-empting the outcome of that inquiry?

IAN MACFARLANE: Well as I say Leigh, there was some concern that it was creating some uncertainty and unease in particular amongst the workers of Holden and the question was asked.

JOURNALIST: But the inquiry would have been creating some uncertainty as well for Holden?

IAN MACFARLANE:  Well I don’t accept that. Holden has been through this process before, I took them through this process in 2003. Everyone in the industry understands how the process works, you have a Productivity Commission report  as we did in 2003, the Productivity Commission present a report to the Government. We then respond to that report, we take the advice of both the PC and other input that’s put in by the industry. The industry well understands that process and certainly in no way would’ve been unfamiliar or unsettled by it. It’s a process they’ve been through a number of times right back to when John Moore presented the car plan back in 2000.             

JOURNALIST: Do you agree that the Government had already flagged to Holden that you weren’t going to be giving them any further handouts?

IAN MACFARLANE: Well what we’d said to Holden was that the money was clearly there on the table, over 1 billion dollars as we look forward from now to 2020 available to the industry. They understood that we were going to ensure that that money was spent, which is taxpayers’ money, was going to be spent in such a way that it re-positioned the industry. Holden had some specific challenges because their export program had been wound back. Toyota were also involved in a program to reduce the cost of their motor vehicles and are still involved in that program. In fact they have a very critical vote on Friday where the members of the union need to ensure that they protect their jobs long term and not follow the demands of union officials.       

JOURNALIST: On that point, just if I can pick you up regarding the roles of unions in this and terms and conditions of employment. Yesterday the Treasurer Joe Hockey said that Labor costs in Australia are too high. Holden today cited cost of production as being a factor in the decision, is the Government suggesting that Holden workers were over paid and brought this on themselves?   

IAN MACFARLANE:  What I have said to the Holden workers, and I have said this to them personally, that they needed to lift their productivity and I went through a car plant in Japan about three and a half weeks ago and the time that a car spends on station, that is as it transits down the production line, is about half what it is in Australia. That means they can produce twice as many cars for the same hours worked by each person on the station. There is a need for work practices to be more productive but we also need to make sure that the industry re-positions itself for a global industry which is what the car industry has become.

JOURNALIST: Can you clarify, did Holden ask the Australian Government for an extra 150 million dollars to guarantee it would stay in Australia?

IAN MACFARLANE: No they didn’t, and that number is not correct. The figures I have seen and the figures that we discussed with Holden are not of that quantum. We made it clear that no money would be allocated until we could see the impact of that money. That is, the PC process followed by a full response by Government which doesn’t just cover Holden. 

JOURNALIST: In recent years Mitsubishi, Ford and now Holden have all announced they’re ending car manufacturing here. Toyota has said today that its future looks very difficult, isn’t it time to just face the reality that car manufacturing in Australia is over?

IAN MACFARLANE: Well I don’t accept that argument and in terms of Toyota, yes their task has been made definitely more difficult as a result of Holden’s decision. The reality is that they’re a company that focusses both on domestic consumption and export. They’re in fact exporting more vehicles than they sell here in Australia. They produce a global car and if you look at the other companies, very much writ large in their demise is a failure to export vehicles. If you look at Mitsubishi, you look at Ford who fail to export vehicles at all in any real terms, Holden whose export program has basically collapsed in recent times. A vehicle that is built just for Australia will always struggle to compete. Australians, only one in ten or one in eight Australians buy a vehicle made in Australia. We’ve then got to accept that if we’re going to build vehicles here then they have to be exported.                

JOURNALIST: What will the Federal Government do practically to help the workers who are going to lose their jobs?

IAN MACFARLANE: Well we’re going to work with Holden. In the past there have been a number of programs. I was responsible for the one when parts of the Mitsubishi operation closed down. Since then we’ve seen programs put in place for Mitsubishi then Ford. We’ll work to ensure firstly that the workers transition into other industries and raise their skills, look for other opportunities. We’ll also work to place new industries to broaden the economic base of South Australia and Victoria in terms of its manufacturing industry. There is a lot to be done but we have to remember we have basically three years to do it in and for workers in Holden it is an incredibly difficult time and my sympathies go out to them. But it is a process we can work through. The Federal Government will stand beside the workers to ensure that this transition is as least painful as possible, acknowledging that it will be a very painful process.            

JOURNALIST: Ian Macfarlane thank you very much.

IAN MACFARLANE: It’s a pleasure Leigh.

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