Holden has transitioned to an engineering company, Mitsubishi has already closed shop and now Ford Australia has discovered that the engineering for a new RWD platform will be done in the US. Ford Australia can only survive in Australia as a manufacturing concern with government subsidies. It has no export market and the only niche vehicle it manufactures for the Australian market is having the engineering done in the US.

Ford Falcon via Automatt's flickr photostream

It is not bad news for Ford Australia, most likely they will thrive by ditching their manufacturing concern and just importing cars for the Australian market. After all numerous car manufacturers make a lot of money in that manner; Toyota, Honda, etc.

Asking for government subsidies to keep the factories open would be a bad business decision. Shedding the high capital cost of a manufacturing operation will be of benefit to Ford. Just the same as the government throwing money at a factory to keep it open in order to save a small number of jobs is equally wasteful. The time when manufacturing offered well payed, stable, middle class jobs is gone.

The decision by the Rudd and Rann governments to subsidise Toyota to build hybrid cars in Australia is a stupid one. We have just seen Mitsubishi run out of the automotive manufacturing business even with subsidies and unless there is a strong export market for the hybrid Camry then it will be the same for Toyota. This is bad policy.

I do not know why the automotive industry is seen as a such a necessary one for political patronage. It is not a large industry, there are certainly larger ones if the politicians want to buy votes, plus it is a shrinking and unprofitable one in many instances. Additionally parochial and nativist pride is diminishing in this area. Even so, bad policy remains bad policy.

Tim Dunlop makes the point that private capital investment is best suited to these decisions on market and economic grounds; a government is woefully inefficient in this area and remarks;

Is public money best spent on subsidizing private businesses in the way of the Toyota deal, or would the money be better spent on things where governments can really make a difference--public transport--and where no-one else is going to step into the breach?

I agree. There is the argument that capital intensive public transport such as light rail is middle class welfare, and that buses are not only cheaper but have greater utility in public transport delivery, however; it is not like there isn't a tonne of middle class welfare already, and long haul public transport from the suburbs and exburbs do aid in commuter choice.

It appears that Holden may have lost the engineering for the RWD Alpha platform. This was to be a smaller sized car than the Commodore, probably 3-Series BMW sized, which now seems to be going to GM North America as Cadillac has more control over it.

This is a blow for Holden, in my opinion, as they transitioned to an engineering company with the Zeta platform and provided a high quality and extensible platform which is used in the Commodore, Camaro and the stretched platforms such as the Buick in China.

GM has been making decisions all over the place recently; cutting this, cutting that, project so-and-so is on, project so-and-so is off, project so-and-so is on again, etc, etc. Not confidence building for an industry with high capitalization requirements and long lead in times.

Currently the moving of the Alpha engineering to North America is rumored, so maybe Holden will be able to get that business back;

In another rumored move, Global Product Board has taken development of Alpha from GM Holden and has given it to the GM North America and GM Europe operations. This was done to placate Cadillac, who does not want to compromise on Alpha's development for their planned BLS-replacement. What Cadillac hopes to achieve is to get a flexible enough platform to support 4, 6, or 8 cylinder engines, as was deemed necessary by the Wreath & Crest brand.

Holden is in a tough spot. The manufacturing numbers are too low to be sustainable for any long term - though government has been happy to throw money at Holden in Australia - and permanence will most likely be based on niche engineering ability, much like Lotus survives. Losing the Alpha platform's engineering would be a nasty loss.