From General Motors, as reported by MacroBusiness and many others, Holden is finally leaving in 2017. I’d love to rant more about subsidising an unprofitable industry to the tune of $1.9 billion dollars annually, but we’ve been given a gift. The gift of certainty.
Jonathan Pincus, a former senior advisor to the Productivity Commission reckons in the long run it will be a significant net benefit. I’d agree wholeheartedly – up to 250,000 employees are now armed with the knowledge their jobs are at best under threat (Toyota) or basically gone (Ford, Holden, Mitsubishi, etc).
They are now truly freed to think for themselves and start looking for productive employment elsewhere (perhaps other countries if they’re really committed to the auto industry), retraining, going back to uni, etc – they are armed with up to 4 years to decide when they want to make that transition – remember the average punter gets two weeks notice when being fired by their boss. Further these auto workers will likely get decent redundancy payments so that gives them an additional margin of safety in thinking about what their dream job is and how to make it happen.
Free. Free and empowered to start innovating, creating, experimenting, learning, coming up with new and better ways of doing things, building things; actually generating more value for all humankind.
We might just get a Liberal government that will be up for some serious structural economic reform after all (hopefully this is not just a one-off). Good work Joe Hockey and everyone else who participated in calling the bluff and getting GM’s decision out there for all to know. Or they could with the removed debt ceiling start building a lot of new infrastructure our cities so badly need – that wouldn’t be too bad of an outcome either. Shame it takes 10 years to build anything these days with all the red tape that needs cutting.
Oh and when combined with the mining capex cliff there’s probably that little recession thing … I’ve never experienced what it means as Australia has had 22 years of continuous growth. Of course it’s all a dartboard and no one really knows the future. For instance you can get concerned by listening to the gold bears or the demographic headwinds as the boomers retire (e.g. Japan). Or you could try thinking for yourself if the rest of the world starts growing after their GFC blues, they’ll probably demand more resources. Or they could demand more of our world-class education system, financial services, tourism and other successful industries. Dartboard. Except for the lucky auto workers who know they have four years to prepare for their now far more certain future. Thank you GM and Holden for being honest with the Australian people.