October 2016

Collapse of Australian car manufacturing will harm R&D in other sectors: study

-Abbas Valadkhani, Professor of Economics, Swinburne University of Technology By the end of next year, car manufacturers Mitsubishi, Ford, Holden and Toyota will all have largely exited Australian manufacturing, taking their assembly lines overseas where the cost of production is significantly lower. This will create a vacuum for 260 businesses that supply accessories and components to the Australian automotive sector. But beyond the direct impact to suppliers, our research shows there will be a significant impact on output and tens of thousands of job losses in downstream and upstream industries, and in particular, the Professional, Scientific and Technical Services (PSTS) sector. This sector, defined by the Australian Bureau of Statistics, currently employs more than one million people, or around 8.5% of the total workforce. There are several reasons for the closure of Australia’s car manufacturing industry. The Australian market is too small and the industry cannot fully exploit economies of scale. To remain solvent they have no choice but to use cheaper foreign production inputs including both labour and parts. The domestic market conditions in Australia has become untenable with a) the lowering of import tariffs and the signing of Free Trade Agreements; b) higher wages and better work conditions demanded by the unions; and c) the appreciation of the Australian dollar. It is very difficult to compete when labour costs in some Asian countries are only one-fourth of that of Australia. But the car manufacturing industry does not operate in isolation. In 2009-2010 there were approximately 73,772 full-time employees in the motor vehicle industry (which includes the production of other transport equipment as well as parts), producing a total gross output of approximately A$20 billion. The output and employment multipliers in this industry are two and seven respectively, suggesting that $1 million in additional final demand can directly and […]

Made in China: Chinese business has evolved from imitation to innovation

Bruce McKern, Honorary Professor, Business School; Recently Visiting Fellow at Hoover Institution, Stanford University and Oxford University, University of Sydney. Most of us use products made in China every day and are aware of its growing economic power as a factory to the world. But China intends to become a developed nation by mid-century and integral to this ambition is its intense focus on innovation. In a very few decades, Chinese companies had evolved from imitators to imaginative and effective innovators. As part of my research with my colleague George Yip on this issue, we identified three key phases in China’s development: 1. From Copying to Fit for Purpose 2. From Followers to World Standard 3. From Seeking New Resources to Seeking New Knowledge Chinese companies now pose a challenge to established multinationals, as they enter the markets of the developed world to become insiders. Since China’s former leader, Deng Xiaoping, implemented market-oriented economic reforms to China in 1979-80, the driving forces of this transformation have been the customer and the culture. Chinese customers have an insatiable and rapidly growing demand for products, as the large, diverse population seeks better lives. This has stimulated many companies to develop affordable products for those needs. And a culture of entrepreneurship in the business sector has been facilitated by a far-sighted government with a strong drive for independence and economic development. The Chinese government has fostered an innovation ecosystem across the country, consisting of some 100 science and technology parks, universities and government research institutions, which provide support for new enterprises. The Chinese government and business invested some US$190 billion in research and development in 2013, which is around 40% of the annual R&D investment in the United States. China’s research and development expenditure represents just over 2% of its GDP, which is slightly […]

Bearings answer challenges of smaller bridge construction and upkeep

Smaller bridge construction and maintenance can benefit from cost-efficient Herculon type D sliding bearings in capacities up to 60 tons per bearing. A challenge facing builders and operators of thousands of smaller bridges throughout Australasia is ensuring such structures can flexibly and cost-efficiently cope with internal movement and stresses caused by changing loads, vibration, thermal expansion and other common attritional factors. The ability to provide cost-efficient and maintenance-free solutions to such issues is especially important to road and pedestrian access projects demanding high safety, such as those undertaken in metropolitan infrastructure projects, including health and carpark facilities. Such capabilities are also important in remote area service vehicle and pedestrian access facilities, such as those providing supply, exploration and service routes to mining and energy and oil and gas projects, where movement within access structures is caused by factors such as climate, changing uses and delivery of plant including conveyors, motors, turbines and reticulation systems. “Low maintenance is equally important also to government authorities as they face demands from local businesses to refurbish and renew private and public regional infrastructure,” says Mr David Booty, Manager, Hercules Engineering (a division of Cut To Size Plastics). “It is estimated* that there are more 30,000 timber and concrete bridges maintained by local authorities, for example, of which more than a quarter are in poor or fair condition,” *Source: National State of the Assets Survey 2015. Many of these are smaller road bridges or pedestrian walkways or bridges and could benefit from a no-maintenance, cost-efficient solution provided by Hercules Engineering through its range of Herculon Type D Bearings (HLD/SG, HLD/FF & HLD/FX), which are widely proven on applications ranging from steel and concrete beam engineering structures through to materials handling and processing facilities. Herculon HLD Bearings are part of a comprehensive range of Hercules composite […]

Konecranes extends steel industry and advanced technology leadership

In the picture:Konecranes staff at the 2016 Steel Convention. From left to right, Daniel McCarney (Operations Manager), Peter Monaghan (National Industrial Equipment Sales Manager), James Dowe (Managing Director, Australia, New Zealand and Philippines) and Steve Gagnuss (Head of APAC Region). Global crane manufacturer and service leader Konecranes is extending its technology and leadership involvement in the steel industry by being a major sponsor of the Australian Steel Convention for the 5th year in a row. At this year’s convention, hosted in Melbourne CBD from September 11-13, Konecranes, which employs over 12,000 people across 600 locations in 48 countries, demonstrated its UNITON crane. UNITON is particularly applicable to the steel industry and related uses such as materials handling, manufacturing and maintenance. A strong focus this year was on advanced technologies such as SMART features, lifecycle care through yourKONECRANES and the new Konecranes parts store, all of which are designed to provide a greater level of safety, reliability and information that can help to better plan maintenance and service schedules. “Our continued support of this convention provides us with a valuable opportunity to discuss the steel industry with other experts and help shape its future into one that is safe, efficient and reliable,” said Konecranes Managing Director, Australia, New Zealand and Philippines, Mr James Dowe. Mr Dowe will also personally be attending Konecranes’ booth at the convention, along with Konecranes Head of APAC Region, Mr Steve Gagnuss, National Industrial Equipment Sales Manager, Mr Peter Monaghan and Operations Manager, Mr Daniel Mccarney in order to answer any questions about Konecranes technologies or the steel industry in general. “Our company has a strong ethos of safety, which is vital to the steel industry. I’ve had some insightful conversations about the future of the steel industry at past conferences, and I’d invite anyone who is […]

The Ford plant closure is sad loss of manufacturing know how

Geoffrey Brooks, Pro-Vice Chancellor (Future Manufacturing), Swinburne University of Technology The closure of Ford’s casting plant in Geelong does make you wonder how losing the ability to make our own engines can be a step forward. Australia should take stock and contemplate what kind of society we are becoming. Critics of the decision to allow the car industry to leave would argue that governments should subsidise their local car manufacturing industries because of the benefits the industry brings in terms of employment and raising the general technological level of that country. In An Economy is not a Society, Dennis Glover argues that we are making a tremendous social and economic mistake in allowing such industries to close in the name of global competition. Glover outlines how the support for manufacturing in the post second world war era provided a base for many ordinary people to lead better lives, leading to many positive social and economic outcomes. He argues that the type of economy we have developed since the 1980s favours a few over the many. Certainly, the current government has shown more enthusiasm for making submarines than it did for car manufacturing, how does that extraordinary $50 billion dollar investment stack up, in terms of jobs and flow on effects? With the closing of the automotive industry, our knowledge of metals casting will clearly dive. Those employed at Ford and similar employees at Toyota and Holden don’t have equivalent jobs to take their deep knowledge to. The opportunities in the metals industry in this country are thin on the ground. The large casting plants are now in Asia, though the high technology end still prospers in part of Western and Northern Europe. The Chinese are currently known more for the low value end of metal castings but they are likely to […]