Automobile deathwatch

10 12 2013

The media is alight with reports of GMH Holden closing its doors some time in 2014.  And this, so short a time since Ford Australia told the world it was doing the exact same thing earlier this year.

There’s outrage everywhere, not least the blogosphere (like this) where everyone’s blaming the new government (for whom I have no time at all..), as if they were actually in charge….  Except they’re not in charge; larger forces at hand are, and the car is dying.  Cars are going extinct, just like the dinosaurs that they have become.

In the last census held just five months ago, there were 17.2 million vehicles counted in Australia, including motor cycles, and about half a million were ‘trucks’ of various types.  Which means that, roughly, there are some 16 million cars registered for a population of 23 million, or almost 1.5 cars per 2 people.  Let’s face it, there are two cars for two people in this supposedly green household…

I know when I drive on the freeway to Brisbane at my leisurely 90 km/h, hundreds of cars and many trucks pass me.  Every time I do this (as less often as possible you must understand!) I know we are stuffed.  All I can think about are the tonnes of non renewable fuel consumed to do this, and unbelievable amounts of debt that must be out there to pay for all that travelling.  And yet, it wasn’t like this once…..

Just pretend for a moment that you’re a farmer at the dawn of the 20th century.  You’ve got all the seeds you need for the next growing season, all the ploughs, hoes, and other accessories, too.  You’d be out in the paddocks now, except for one problem: you haven’t got a horse….!  Or a bullock…

That’s a major disaster…. How can you run your farm without a horse to do the heavy lifting….?

Three generations ago, that would have been a real head-scratcher.  Today, however, the answer is obvious: head down to Massey Ferguson and fork out for a tractor.  With debt of course……

From our current perspective, the transition from horses to horsepower appears seamless, but in fact it didn’t happen like that, nor was it accidental.  It was a complex process that leveraged emerging technologies to address rapidly changing needs in the farming sector.  At a time, let’s not forget, oil production was rising fast, and oil was cheaper than chips… Farmers didn’t just switch to tractors because tractors were more efficient than horses, they switched to tractors because farmers had to produce exponentially larger amounts of food for a population that was abandoning rural life for bustling cities, thanks to the Fossil Fuelled Industrial Revolution.  And because the farmers’ big switch worked, vast numbers of people could leave farming altogether, forcing tractors to get bigger and faster, thus  fuelling a vicious circle of dependence.

Something similar is happening to the car as we speak.

A century later, the private car is dying. Older Australians may still appreciate the vehicles parked in their driveways, but as we’ve seen time and time again, young people just don’t care.  In 1991, of NSW kids aged 20-24, 79 per cent had licences. By 2001 it had risen to 80 per cent. Yet by 2008 it had crashed to just 51 per cent and continues to decline. A new study in Victoria by Monash University shows the number of licence holders under 30 is dropping at more than 1 per cent a year.  Neither of our 26 year old twins have a license, though one of them is currently learning to drive just to be able to get work now he’s finished University……

But there’s more to it than that: young people aren’t blase about cars simply because it’s harder to get a license nowadays, or because they can’t afford them (although those are contributing factors). It’s because cars are no longer necessary.

A paper by Curtin University academics Peter Newman and Jeff Kenworthy, Peak Car Use: Understanding the Demise of Automobile Dependence, cites soaring oil prices, traffic congestion, a preference for inner-city living, public transport growth, an ageing population, and more crowded cities for pushing people away from cars. ”Peak car use is a major historical discontinuity that was largely unpredicted by most urban professionals and academics,” write the authors.

So why is everyone surprised, even outraged, that the car companies are closing their doors?  Especially when they build totally inappropriate cars for today’s capacity to fuel them….?

The rationale for building cars in Australia is about as thin as an EH Holden’s paintwork.  In competition with much bigger and cheaper global competitors, Australia’s car industry never stood a chance.  It certainly did its job to help secure an industrial base in a less specialised world, but the world has changed now, it’s one big supply chain and Australia has to sell into it and buy from it.

Mitsubishi is gone (mind you, I know from first hand experience what crap cars they built), Ford is all but gone, Holden is preparing to go and Toyota may not be far behind. There were almost 44 million vehicles manufactured globally in the first six months of 2013: more than 10 million in China, more than five million in the US, Japan close behind, then Germany, South Korea, India, Brazil, Mexico at about two million each. Australia made 94,000 vehicles in that time and ranks 30th out of 39 car-manufacturing nations, alongside Hungary and Austria.  Are we still surprised…?

Fact of the matter is, to continue making cars would need more oil and more money.  And both those commodities are in short supply.  Even the US Government is selling its shares in GM, at a loss of $10.5 billion!

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3 responses

10 12 2013
Rapideffect

When mitsubishi went, many were saying it was just a matter of time before the rest followed. Now that time is (almost) here. Without the government throwing money at this terminally ill company it would of been gone long ago. Time to turn off the life support…

This trend of companies going arse up will only continue to increase in the years ahead, but when will the majority of people start to realise that the government cannot solve these problems. Peak oil has got the global economy by the balls and will only continue to squeeze harder as time goes on…

11 12 2013
lemmiwinks

The loss of the car industry is not the loss of the car industry, it is the loss of manufacturing capacity. Skills, knowledge and the infrastructure to build things. I couldn’t give two hoots about Australian built cars (I might buy one if they made something decent instead of overweight fuel guzzling 6 cylinder tanks – the belated introduction of the Australian built small car by Holden (Cruze?) is too little too late), but manufacturing is a valuable industry.

11 12 2013
Oelsen

GM is being sold out because I expect them to have huge reserve in real estate that can be developed and has more value than the stocks themselves.
See: Privatization, Collusion.
Also what lemmiwinks says. Those workers were the last normals informed and able to “get” industrialization and how stuff works. When those are gone, there are only robots and esoteric new age groups. A very bad substrate to redistribute maker capabilities.

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