TRANSCRIPT OF INTERVIEW WITH VIRGINIA TRIOLI AND JOE O'BRIEN
ABC2 NEWS BREAKFAST
Tuesday, 23 December 2008
Subjects: Holden's four-cylinder car announcement; Toyota's plans to build a local hybrid; Government support for the car industry
O’BRIEN : This week has seen a rare bit of good news for Australia's car industry. Holden has announced the production of a new fuel saving car at its Adelaide plant.
TRIOLI: Now the Federal [and the South Austalian] Governnments are contributing $180 million to the venture; funding which will be matched by Holden. And Federal Industry Minister Kim Carr joins us now. Minister, good morning.
CARR: Good morning.
TRIOLI: Now this is going to be a four-cylinder car that will be built here in Australia. Sales of six-cylinder cars have been rapidly declining for more than two decades. Why has it taken so long?
CARR: I'm not quite certain those figures are right. I've seen those reported, but nonetheless I think the situation is that consumer choices are changing; we have seen quite dramatic volatility in the market; we've seen changes in the way in which cars are produced; and we've seen of course different expectations of the automotive industry.
So what worked well up until recently is no longer working, and there needs to be a refocusing, a revitalisation, a reinvention of the automotive industry. Having said that, the Commodore remains - hopefully this year it'll be the thirteenth consecutive year of being the largest and most successful car in Australia.
O’BRIEN : Now you've funded this program under the banner of the Green Fund, but how green is this car? Aren't there already hybrids on the market that are far more effective than what this plant will produce?
CARR: It's about building capacity. It's about improving fuel efficiency; about improving emissions. It's about making sure you've got the ability to move to the next stages in the technological development of the automotive industry in this country.
O’BRIEN : But if it's about that, why couldn't it equal the best cars on the market at the moment?
CARR: Well I think it will. I think it will in terms of petrol - this will produce 20 per cent savings in fuel economy; it will produce a vehicle which is easier on the wallet, easier on the environment; it will provide opportunities for high-skilled high-wage jobs in this country; and is very important in terms of the future of manufacturing in this country.
TRIOLI: According to one bit of analysis that I've seen this morning, it actually won't be as fuel efficient as some that are on the road, even if we're not talking here about the Prius' and the hybrids. Other cars on the road achieve a fuel efficiency of between five and 6.5 litres per 100 kilometres; and according to analysis that I've read, this car, at least initially, will only produce about 8.8 litres of fuel; or consume 8.8 litres of fuel for every 100 kilometres.
CARR: I'm surprised that these analyses could be developed when this car has yet to be developed. These...
TRIOLI: Well, it's on the basis of what Kevin Rudd said yesterday about it being, having.. hitting the 20 per cent efficiency mark that he wants to see most cars achieve.
CARR: Well we're being conservative in our estimates. The whole business case for this vehicle is built on a very conservative model. It's my expectation that we will be able to produce a car that is at least 20 per cent more efficient than vehicles are today.
We are building the capacity of this industry in Australia. There are some 200,000 people in this country whose jobs depend upon the automotive industry. And we're in the business of ensuring that we remain one of the 15 countries in the world that can make a car from beginning - that is, from conception through to the showroom floor.
This is about building that capacity and ensuring we have the industry's future in a modern, advanced industrial setting; which many other countries are now of course facing similar problems, and dealing with these issues in a manner which, of course, I think is perhaps trying to come up to speed where we are.
JOE O’BRIEN : Now, Toyota announced from Japan yesterday it was facing an unprecedented crisis, and there was no word though in its plans to build a Camry hybrid in Melbourne. Now, part of your green funds have been directed towards that program - about $35 million. Have you received any word from Toyota about that process, or that plan for that Camry hybrid, that that's guaranteed?
CARR: Well of course it is guaranteed by the fact the contracts are written in such a way is that the automotive companies do not receive public support unless they invest the money themselves. So it is on the basis of mutual obligation. These are co-investment agreements. Now the Toyota motor company operates in about 90 different settings around the world. They're not mentioning each and every one of those in this statement.
What Mr Watanabe pointed to yesterday was the most severe downturn the industry has faced in, in several generations.
And of course, in those circumstances, it's all the more important to attract new investment, and it highlights the success that we've had in this country; and the announcement yesterday by Holden demonstrates the success that we are having in the face of what are colossal economic challenges around the world.
O’BRIEN : So you're not concerned that that program wasn't actually mentioned yesterday?
CARR: No. And furthermore, we're now talking about future investment with Toyota, and we are working with Toyota to ensure the sustainability of manufacturing at its Altona plant. We are in the business - once again, I repeat - of building capacity. It's a bit like a ladder; you've got to keep one foot on one rung moving up all the time. It's a constant process of improvement; a constant process of renewal; a constant process of reinvention. And that's exactly what we are doing.
TRIOLI: How difficult is it for you, as Industry Minister, to have to stare down what you correctly describe as a real problem around the world, in terms of the automotive industries and the amount of public money that has to be thrown at these companies to keep them solvent - how difficult is it for you philosophically to keep doing that when of course you do want to maintain an industry here; you don't want thousands of people suddenly joining the unemployment queues? Does it cause any tension or any difficulty for you in doing that?
CARR: Well, there's a lot of public comment about the automotive industry, and not a lot of it's well informed. And that's the real challenge, is trying to educate commentators about what's actually going in the automotive industry, what's actually happening, what its significance is, and why it's so important; and why do countries all around the world invest so heavily in the industry.
And when people begin to understand the actual processes that actually take place, and don't have some idealised view - you know, implying for instance that the motor car is somehow or another grows on trees - you know, that you begin to reassess the policy framework that's necessary to ensure that we have high-skilled high-wage jobs into the future in this country.
The automotive industry is the backbone of manufacturing. It's a point that's made by leaders all around the world. It is critical to so many aspects of the way in which our economy works. It's a cultural institution; it's a social institution, not just an economic commodity that we're talking about. It has much broader application than many people appreciate; particularly those that are in, you know, particularly high jobs themselves who are thinking about the fortunes of blue collar workers in a way which I suspect is not always relevant to what the real economy is about.
TRIOLI: Senator Kim Carr, thanks for your time.
CARR: Thank you.
ENDS