More Holden Woes

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Thoughts from Adelaides thinker in residence.

The state's manufacturing future should not include car makers such as Holden, our Thinker in Residence says.
Goran roos, an expert on manufacturing innovation said the economies which grew rapidly last year after the financial crisis, such as Germany, Switzerland and Sweden, all had a large share of high-end manufactured exports.

"You have a lot of manufacturing companies in South Australia, and that's actually a good thing," he said. "You should be a manufacturing state ... (but) you need to have high value-added manufacturing where the cost of the product is not important compared to the value it generates for the buyer," he said.

He said Australian manufacturers were brilliant problem-solvers but were not as good at "strategic" innovation for the long-term.

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While governments propped up dying industries such as car manufacturing to protect jobs, this was just delaying the inevitable, SA's 20th Thinker in Residence said.

Instead, governments should use their (public procurement) buying power to push industries to create innovative products and solutions, inviting them to go "5 per cent beyond what you can presently do".

Holden recently announced it would add 100 new staff, on fixed 12-month contracts, for its Cruze production - though only 25 per cent of the parts are from Australian suppliers. The automotive sector has reportedly shed 5000 jobs in nearly a decade.

"Each car produced in Australia is subsidised to the tune of approximately $3000 by the government. Why? The industry is not competitive and you have to let it go," he said.

That did not mean the death knell for the many parts suppliers. Those businesses in the parts supply chain needed to "migrate" their knowledge and skills to another "higher value-added" end client with a strong future, such as medical device manufacturing, a growing sector in SA.

Stephen Myatt, director of the Australian Industry Group SA, said the auto industry had been through tough times but was in a stronger position today that 18 months ago.

Prof Roos, who held his first workshop with 10 local manufacturers last week and who is here to advise the government on the state's fabrication future, will deliver a free public lecture at the University of Adelaide's Elder Hall at 6pm tomorrow.

He will tell his audience not to believe statistics showing manufacturing was dying. He said in countries, such as Australia, it is "increasing, but just changing form".