It’s not a hand out, Julia Gillard said today about her, well, handout — and those of the Baillieu and Weatherill governments — to US multinational General Motors to keep making cars here until 2022.

“A strategic investment” was the Prime Minister’s phrase for the $215 million package to support 55,500 jobs in the car industry and “around 200,000 additional jobs nationally” (those magic employment multipliers again).

Among those jobs will be several new ones. There’ll be an “Automotive Envoy” “to strengthen links with the global automotive market”. Let’s call him or her the ambassador for Detroit. There’ll also be an “Automotive Supplier Advocate to help identify new products and customers in automotive and non-automotive industries.” GM will also be establishing a “Suppliers’ Working Group to connect Australian suppliers to GM’s world-wide supply chains.” The golden opportunity to appoint a US-style “car Tsar” has, sadly, been missed.

There’s only so much terms like “co-investment” and  “developing new business opportunities” can hide before it becomes apparent that this is merely a $200 million plus bid by Australia in the international market established by multinational automotive manufacturers to determine where they can get the most handouts for establishing car plants.

There are few other industries like it, with the capacity to hypnotise politicians the world over, making them suspend their scepticism and start writing out cheques. The closest comparison is “major events”, in which sordid institutions like the IOC, FIFA and Formula 1 demand, and get, massive subsidies and legal protection from governments for the right to stage ludicrously costly events.

Although, seen from that point of view, the deal isn’t too bad: remember we blew $46 million just trying to bid for the soccer World Cup, and compare the $50m Victoria wastes every year on that noted supporter of gross human rights violators, Formula 1, for some momentary coverage and a minimal boost to tourism. The $200 million that might — time will tell — keep perhaps ten thousand workers in jobs for another decade suddenly doesn’t look so bad.

The only smart aspect of the package was a further $16m for training and support services for workers leaving the automotive industry. Its one flaw is that is should have been ten times that, to help exit a substantial chunk of the workforce.

That Gillard proudly stood next to the same vehicle as Ben Chifley did in 1948 speaks volumes: our industry policy hasn’t moved on in more than 60 years. At the ceremony not long before the “Holden 1” rolled off the production line, Chifley spoke about of exporting vehicles “beyond our borders to other people in the Pacific and South East Asia” and lauding it as an example of the Australian-American relationship.

Today there was no pro-American rhetoric, but the Prime Minister was still talking about accessing Asian markets.

Detroit would be only too happy to be here in 2076 with another PM talking of co-investments to enable Australian manufacturing to enjoy the benefits of “the Asian century”. And if they’re not, they’ll be in some other country lucky enough to have “won” the global auction that is car manufacturing.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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