“The answer is good cars, not big tariffs,” The Australian editorialises today on the news that our automotive manufacturers have asked the Government to freeze tariffs at 10% and give them another billion bucks of our money.

Blud oath, Norelle, as they say in the classics. Take our shakiest carmaker, the Adelaide-based Mitsubishi.

Last month Industry Minister Ian Macfarlane and SA Treasurer Kevin Foley travelled to Tokyo to talk to Mitsubishi Motors Corporation President Osamu Masuko. “Mr Masuko has given an assurance to Kevin Foley and I that Mitsubishi Motors Japan is not considering closing Tonsley Park,” Macfarlane said after the meeting.

Yet privately senior sources say both governments believe Mitsubishi’s make or break 380 model has failed. They believe Mitsubishi’s Australian operations are doomed. The ministers undertook the visit to Japan to provide them with wriggle room for when the announcement comes.

Both governments were angered in October when the ABC revealed details of “Project Phoenix”, a draft document detailing plans to close Tonsley Park. It set out three possible dates: March 2008, October 2007 or as early as next February. They were furious to learn Project Phoenix suggested making an announcement just four months before the gates were shut while creating an illusion of business as usual.

They are still worried about the genesis of Project Phoenix, if it came from Australia or Japan. And there is talk in government circles that another options paper exists, prepared by international management consultants Booz Allen, that recommends an immediate exit from Australia.

The sheer fact that government sources are prepared to discuss such a paper shows the state of relations with Mitsubishi. The same sources question Mitsubishi’s production rates. They say they have slipped below the 65 units a day the company cites. They ask how these rates can be financially viable.

The motoring writers say the Mitsubishi 380 is a good car, but its sales have been slow. Companies need sales to stay in business.

The politicians are doing what politicians always do. They’re covering their ars-s. But the manufacturers have failed to do what businesses need to do to survive. They’re not meeting market demands.

Yes, there are long lead times in this industry. But The Australian’s leader writers are right: “The Australian car industry’s best prospects for future prosperity lie not in government handouts, which distort the market for all car buyers, but in developing and building products that consumers want to own.”

Peter Fray

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