Magazine of Socialist Action in Australia

Rudd bails out car industry bosses

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In late 2008 the Rudd Labor government announced that will be handing over a $6.2 billion bail out package to the car industry. This in effect is corporate welfare on a massive scale.

The reason for the bail out is allegedly to “save” the car industry from collapse during this time of economic crisis, but no guarantees have been made to workers to ensure that jobs, wages and conditions are protected. This is not a package to save the car industry but a package to save the profits of the big car companies.

The Australian car industry has experienced its worst sales performance in 30 years. Car sales in 2008 fell by 14.5 per cent, mirroring similar trends worldwide. The Australian bail out package also comes on the back of a similar handout to US car companies who are set to receive $US13.4 billion after a decision by the US Congress.

Apart from the fact that the car companies are not obliged to protect jobs with this money, the biggest problem with the package is that all of the major decisions about how this important industry is run are being left up to a few ‘leaders’ of big business. There is nothing to stop the car giants pocketing the handouts while continuing to downsize operations. Compare this to the strict regime that people on unemployment benefits are forced to adhere to!

The car industry bosses are the same people who have presided over the wholesale demolition of the manufacturing industry in Australia for years. They are also the same people who have created the situation which has made the car industry so vulnerable.

For example, with petrol prices so high people are wanting to move away from big six cylinder cars and towards smaller more efficient models. There is also a big demand for electric and hybrid cars. But we have seen next to no investment in new green car technology or the production of these cars on a mass scale. The big car companies continue to try and force us to buy bigger cars so that they can make more money.

Many of the car industry bosses are located in the US. They actually have no interest in protecting the Australian industry. As Henry Ford once said “we don’t make cars we make money”. In effect this package is really an incentive for the big car companies to not pack up and move their plants overseas where they can pay workers less. This will remain a temporary situation as it will only be a matter of time before the car companies come back cap-in-hand. Unless we break from the idea of corporate hand outs big business will continue to hold the government over a barrel by threatening to move off shore.

The Socialist Party does not want to see the Australian car industry collapse. At the same time, simply lining the pockets of the people who drove the industry into this crisis doesn’t make sense. The car industry bosses shouldn’t be entrusted with any public money.

The only way to protect jobs, wages and conditions is to bring the car industry into public ownership under democratic control and management. Decision-making should not be left in the hands of big business or government bureaucrats. It should be run by a board- consisting of union members, elected representatives of local communities where the plants are located, and elected government representatives- in the interests of ordinary people and the environment.

A plan should be drawn up to retool the plants to provide for the transport, energy and infrastructure needs in the coming decade. The production of more environmentally friendly cars should take priority. Plants could also be retooled to produce new buses, trams and trains.

However, to turn around the economy it would not be enough to just bring the car industry under public ownership. The entire financial system is clearly not geared towards serving the interests of ordinary people. By also bringing the big banks under public ownership, funds could be directed to build new environmentally friendly products to provide for the long-term needs of society. This is the only way to secure a decent future for working people both in Australia and worldwide.

By Socialist Party reporters