GM, Toyota Not to Blame for Oz Pullout, Former Government Official Says

The Australian government’s portrayal of General Motors and Toyota as villains in their decision to cease vehicle manufacturing in Australia is being called fraudulent by a high-ranking official with the last administration.

Former Industry Minister Kim Carr tells Manufacturers’ Monthly magazine he uses the word fraudulent because some people are implying the car companies were not sincere in their negotiations.

“The inference is that they were lying to us,” Carr says. “However, the amount of work they put into our 2020 car plan, puts a lie to that.”

Instead, Carr says, GM and Toyota were hounded out of Australia by the government of Prime Minister Tony Abbott.

“You can’t describe international companies and their senior executives as grubby rent-seekers and not expect a reaction,” he says. “The car companies knew they weren’t welcome here. I don’t rely on my passion for the manufacturing industry; I rely on what the companies actually said both publicly and privately to me.”

Just before last year’s general election, which saw the Labor government defeated by a coalition of two right-wing parties, Carr says he was having detailed conversations with GM and Toyota about new investments.

“We were discussing two new models for GM and two for Toyota,” he says. “The reason we announced a renewed car plan for the 2020s prior to the election was that I knew that the companies would be taking up the investments if the policy settings were right.”

Carr says if the new government had been serious about keeping the auto industry, the announcement that it was going to take A$500 million ($469.3 million) out of the co-investment program should have been discussed with them privately.

“They should have gone to Detroit and Nagoya and talked to the principals about their new co-investment plans,” Carr says. “If I was still Industry Minister, we would still have a vibrant and exciting car industry in Australia, beyond 2017.”

The idea of raising tariffs on imported cars back to 10% or 15% would have made little difference. “The horse had already bolted,” he says.

Carr tells the magazine the coalition government’s approach to the auto industry was an attitude born out of misconceptions about how a country’s economic system actually works.

“The government has not taken into account the cost to the budget in terms of social security, which will dwarf any co-investment payments that would have been made under Labor,” he says.

“Plus, there will be the costs of social dislocation that comes about with the destruction of these industries, and also the economic cost to other industries because of the spillover benefits that come from automotive.”