Uphill battle
Published: July 13, 2013 - 3:00AM



Advertisement It's moving. You know it's meant to, but the line in the general assembly area at General Motors Holden in Elizabeth, South Australia, still looks faintly disorienting. Today's "takt time" - the period it takes a car body length to pass a set point - is 57 seconds. You wonder how anyone could keep up, but they do.

The machinery provides the initial spectacle, such as the IP robot that slips bulky dashboard assemblies through windscreen spaces with the sleight of a sinuous arm. But it's the people who are transfixing - their concentration, dexterity and agility, physical and mental. General assembly puts together no fewer than 45 different models, and no two consecutive vehicles on the production line are alike. As each gleaming shell looms the operator must identify it - yellow Cruze notchback, red Commodore VF sedan, black Calais, white wagon, blue ute, long wheelbase, short wheelbase, front-wheel drive, rear-wheel drive - and have the requisite bits of metal, plastic, wiring or harness ready for installation inside a minute.

Watch a while and it becomes exciting. Will they get it done? They never fail. It's even beautiful, in the physical precision and kinaesthetic awareness on display. "On production you learn skills you never thought you had," says Lucinda Gregory, a petite 33-year-old mother of two with 15 years at Holden, of her intricate choreography. "Using two hands at once; doing this while you're doing something else over here ... Each job has a flow. You start one job, and you flow to the next. There's no point zig-zagging all over the car, so you have to get a nice flow going."

"You can go into a blind spot underneath the dash and put a nut on a stud just by feel," says quality checker Tony Poole. "Your arm automatically goes there. It's just ... incredible." He still gets a thrill from observing skilled colleagues. "I was watching an operator putting in side-rail airbags and he wasn't even looking!" he says. "Y'know, in - click-click-click." He laughs gustily: "Lad's been doing that job for a while!" Poole, a father of three, has been at Holden 26 years; he would like, he says, to stay another 26.

Until 2039? For the automotive industry's detractors, Poole, Gregory and more than 2000 others at Holden's remaining vehicle assembly plant in Australia cannot be gone quickly enough. To them, the industry, despite still employing almost 50,000 people and turning over almost $50 billion, embodies an old Australia and has become a luxury that a country with a small population can no longer afford.

Locally produced passenger motor vehicles now represent a fraction of a market they dominated before the phased reduction of tariffs began in the 1980s. To continue, American-owned Holden and Ford, and Japan's Toyota, have needed billions of dollars of state support, through a $5.4 billion Automotive Transformation Scheme from 2008 to 2020, plus a range of project-specific grants - what critics call "handouts" and defenders call "co-investment".

The car makers argue that for that outlay, they create many times as much economic activity: sales, wages, taxes, expenditure on materials, research and development. Nonetheless, when Ford in May foreshadowed closure three years hence, it reopened a debate about an industry through which money can appear to flow like water through a bucket with a big hole. Pressured to respond, Julia Gillard, the prime minister at that time, was hesitant. "I think supporting the car industry is important for our nation's future," said Gillard, the "I think" diluting it from confident assertion to bland opinion. It was hardly a resounding riposte to shadow treasurer Joe Hockey's lambasting of the "waste of taxpayers' money" involved in industry assistance.

Strangely, nobody seems bothered by the stupendous subsidies our giant mining companies, domestic banking oligopoly and private healthcare industry enjoy; nor by the fact that high levels of state support for local car industries are often uncontroversial overseas.

Not long ago, ironically, the industry was regarded as a shining light. While imports' share of the market grew from 15 per cent in 1985 to 60 per cent in 2000 as tariffs were wound back, vehicle and component exports grew tenfold in the same period. Optimism abounded. Greg Combet, then secretary of the Australian Council of Trade Unions, gushed in the Canberra Times that the car industry "should rightly be regarded as Australia's biggest manufacturing success story". Quite. Forced to compete, Australian cars have never been of higher quality. The problem has been quantity.

In the first half of the noughties, local vehicle production surged. In 2005, when Holden was employing 5600 people in Elizabeth and making 900 cars a day across three shifts, it exported more than 60,000 sedans, utes and coupes in right- or left-hand-drive configurations to five continents. But despite growing local car sales, Australian production began trending in the opposite direction. Last year, Holden, Toyota and Ford sold just 224,000 vehicles, and only 139,000 domestically - 12.6 per cent of the total number of vehicles sold in Australia. They have survived this downturn with the help of government support and by self-administered austerities. Holden at Elizabeth, down to a single shift in general assembly and now making only 400 cars a day, is in the process of finalising 400 voluntary redundancies, and next month will ask workers to vote to cut their own wages.

What happened? Traditionally, the Australian vehicle market has been dominated by powerful, rear-wheel-drive "family cars", particularly the Holden Commodore and Ford Falcon, the type of vehicle that offers slightly better profit margins and longer production runs.

Over the last decade, however, the market has not so much shifted as fissured, moving in several directions simultaneously, with the growth markets being smaller cars with lower fuel consumption, luxury European marques, and sports utility vehicles. Australian consumers are demanding cars that are bigger, smaller, fancier, simpler, thirstier and more abstemious than local manufacturers provide. Why? Because they can. The lowering of tariffs has, as prophesised, been a boon for buyers, especially since the managed plunges of the greenback and yen slashed prices.

As a result, Australians now buy as many cars imported from South Korea as they do cars made here; they buy twice as many from Thailand, four times as many from Japan. More than 60 car brands and 360 models are on sale here - more than in Japan and China; more, even, than in the US, a market nearly 15 times the size of Australia's.

What this means is that nobody sells much of anything: no SUV sold more than 20,000 last year, while 2012's highest-selling car enjoyed half the sales of 2002's highest-selling car. Those numbers are fine for importers, but local manufacturers have been stretched every which way, producing ever more varieties in ever diminishing volumes at ever falling prices. Worse, the strength of the Australian dollar has largely excluded them from the export markets they cultivated: Holden sold just 14,100 cars abroad last year, and Elizabeth has felt the pinch.

It might now be fraying at the edges, but Elizabeth was Australia's first "new town", built in the 1950s with implicit support from the state government to perpetuate South Australia's lower living costs and provide the state with an industrial bedrock. Finding that the residents of Adelaide were reluctant to travel 30 kilometres north to work in Elizabeth, premier Thomas Playford laid out a welcome mat for Holden, offering cheap land and infrastructure support in the town's south.

New British arrivals came in the tens of thousands (Elizabeth's most famous son, Glasgow-born singer Jimmy Barnes, claims that he did not hear an Australian accent until he was 11 years old). Perhaps the biggest day in the town's history was the 1963 visit of the Queen, who came to the Holden plant and waved to employees from a specially built verandah.

The area's vestigial Britishness has faded; so has the industry. Today, unemployment in the City of Playford, of which Elizabeth is part, is 14 per cent, youth unemployment 44 per cent, and localities such as Davoren Park bear the blights associated with joblessness: derelict shopping marts, shuttered community facilities, drive-through bottle-ohs with security guards, and graffiti tags, of which the council removed a record 180,000 last financial year.

Yet range farther afield, for Playford spreads its 80,000 inhabitants over 346 square kilometres, and the picture changes. An affordable housing project, Playford Alive, has attractively regenerated Smithfield Plains. A Lend Lease development, Blakes Crossing, offers "stylish village living". Far from shrinking, Playford is officially "the fastest-growing council in South Australia", its population forecast to grow 70 per cent by 2026. Which causes you to wonder: where will these new arrivals work?

Probably not at Holden. Because it has recently been contracting rather than expanding, it has taken only eight of the 500 apprentices placed by the impressive local technical college, St Patrick's, in the last five years. "We certainly get the sense that there's no point engaging with Holden," says principal Rod Thomas, "because there's no guarantee that a young person will be able to finish an apprenticeship there." Nonetheless, Thomas feels, the company's leaving would devastate the city: "Holden is the glue of this community."

That feeling envelopes new arrivals as they circle the "Holden Bulldogs roundabout" on entering town. Holden has sponsored the dearly loved Central District Bulldogs Australian rules club since 1989, and the club's veteran chief executive Kris Grant supports them right back: "I've never driven anything else my whole life. I don't think there is a better car for Australia." He'd rather not contemplate their closure: "We have a membership of 2500, and I'd venture to say that 50 per cent work at Holden, with another high percentage in associated industries. So it all filters down, because people's spend here is relative to how things are going there. If Holden disappeared, it would be pretty difficult for us to carry on." Among the jokey fines the players levy among themselves is a $5 penalty for being seen in proximity to a Ford.

Above all, perhaps, Holden has traditionally defined "work" in Elizabeth. Economists like talking about Australia's "inevitable transition to a services-based economy". Tourism. Hospitality. Education. Health. Aged care. At his triumphalist best, Paul Keating once dismissed the employment cost of restructuring secondary industries: "People have found better jobs. I mean, did we ever hurt anybody liberating them from the car assembly line?"

But nobody here craves such "liberation". When Holden offered redundancy packages in April, senior technical officer Steve Brecht did consider ending his 25-year career: "I went through moments of sheer clarity. 'Yes, I'm going to go, and take control of my future.' But five minutes later it would be, 'Why would I want to leave this place?' Because despite everything that's going on, I love it. Outside of the people here, none of my friends have worked in the same place for more than 25 years. Most of them have been through multiple jobs, some of them dozens."

Brecht wonders aloud what could ever replace his existing job satisfaction: "I read a local report about an aged-care facility saying: 'Oh, we'd be looking to take on Holden workers.' Really? Because I can't see myself wiping some 90-year-old dude's butt in the middle of the night for a job. No disrespect to him, or the person who might do that job, but I don't want to be that person; I don't look on that as a great way to earn a living."

Brecht says this advisedly: his own grandfather is 96. But the thing is, his grandfather also worked at Holden, as did his father and his brother. Between them, they have invested almost 100 years in the company. And they're not unusual. Critics who deem automotive manufacturing an "industry of the past" are in one respect correct: institutional loyalty and identification run deep.

The average Holden career lasts 16.8 years; the average Toyota career lasts 12.8. Employees commonly wear Holden shirts and jumpers casually, even after retirement, and Lucinda Gregory describes "the nod" that workers exchange at the sight of one another, which in her case is especially meaningful, as she married another general assembly worker, a so-called line chaser, who supplies operators with the components they need.

It can be tough work - confronting, wearying. "Toyota are putting people on at the moment, and they're lasting half a day, maybe a few hours," says Dave Smith, national secretary of the vehicles division of the Australian Manufacturing Workers' Union. "Most people think you just sit there and bolt things on. You have to understand the production systems, the quality regime. People come and either leave very quickly, or stay a long, long time. Because it's difficult."

But difficult is also challenging and energising, and critics, most of whom will seldom do other with their hands than scuffle keyboards, also reveal something of their metropolitan alienation from the sheer joy of planning, making and fixing stuff. Because in conversation with Holden workers, this theme recurs. "A lot of people probably look at us and think, 'There they are walking into that same plant, every day, same thing again', " notes dimensional engineer Dan Hayward. "I've been here 15 years and I've never had a dull day."

The joy is real; nor does it fade. Bubbly human resources manager Jody Williams recalls the general assembly job she began 31 years ago as a first glimpse of accomplishment. "We were making the Gemini at the time. There were two lines, a slower line and a faster line, making door trims, and once you got proficient at it, you went over to 'the rocket line'. And I got there. So I was pretty proud of myself ... I thought I'd be here two years while I figured out what to do with my life. Then I realised I could make it my life. I cry at 'Football, meat pies, kangaroos and Holden cars'. Holden grabs you like that."

So it would seem. "This industry attracts problem solvers," says Joel Buchanese, a serious young electrician who joined Holden in 2002 by obtaining one of 10 apprenticeships from 1000 applications. "Some people prefer a cruisier job, mowing lawns or whatever. I'm in my element when I've got a puzzle in front of me, and this place sometimes fires them at you like a machine gun. In metals stamping, we've got huge machines worth hundreds of millions of dollars with complex control systems. When they stop throwing panels out the back end and you have guys standing around doing nothing, you've really got to switch on your A-game."

Because what's worst understood about Australia's automotive industry is how exacting it has needed to become in order to meet a low-volume, high-competition market. Holden is a prime specimen of technology honed by a century of improvements: 300,000 square metres of floor space turning half a million parts a day from 650 different suppliers, worth $3 billion annually, into tens of thousands of cars in six body styles, nine variants and 45 different models. General assembly is only the culmination of a 22-hour, seven-kilometre process beginning in the stamping plant with the pressing of body sides, floor pans and roofs from steel, and ending with a complete car.

Automotive is the industry that trailblazed techniques of "lean production", in which inventory is anathema, supply lines are taut and mutual dependence acute. In adjacent Edinburgh Park, connected to Elizabeth by a private bridge, are 10 key components suppliers, such as Futuris, which manufactures seats and door trims, and Tenneco, provider of exhausts. A few others are located elsewhere in Elizabeth, like Exide, maker of batteries, and Hirotec, stamper of doors, bonnets and boot lids. "Trucks leave here every 21 minutes," says Hirotec's assistant manager, Brett Heaven - note, not "every 20 minutes or so".

Some components are sourced from as far away as Mexico and South Korea; the bulk from Victoria. For example, three semi-trailer loads of 50 different parts arrive daily from a former sauce-bottling factory in Reservoir, Melbourne, owned by Diver Consolidated Industries, a third-generation, family-owned metal fabricator with 100 employees. Founded in 1937, DCI still has on display its original hand-operated metal stamp. Having provided components for the first Holden in 1948, it now exports to Holden's parent company, General Motors, in China, Thailand and Brazil.

Jim Griffin, the Holden alumnus who runs DCI, is a manufacturing man through and through. "We can't all be baristas on the Gold Coast," he says sardonically. Examining one of his beams, his expression grows almost beatific, like that of a new father overlooking a cradle.

It's marching in step with Holden that entrepreneur Andrew Downs says has helped him build a $70 million business in Adelaide's Melrose Park. Downs founded SAGE Automation in his mother's backyard 20 years ago. His breakthrough was obtaining a contract to supply Holden, he says, because their demands were so relentless: SAGE control boxes with touch screens now festoon Holden's general assembly and body shop areas.

"If a water plant stops, usually they've got some backup, and it's pretty slow to move," says Downs. "When automotive lines stop, every man and his dog is affected: that's irrecoverable costs of many thousands of dollars a minute. I've witnessed it, unfortunately. As the minutes go by, the number of suits pouring out of the offices grows exponentially. I'm telling you, it is the worst feeling."

While economists conduct angels-on-a-pinhead debates about the degree of innovation "spillover" that the automotive industry offers the wider economy, DCI and SAGE are the phenomenon's living embodiments. DCI has applied its fabrication expertise to heat shields for fire engines, foldaway steps for trucks, and the popular Triton Work Bench. SAGE cites a host of intellectual properties originated at Holden: a fault-alert system for a Beringer Vineyards bottling line; a smart control network connecting pump stations and tank sites for SA Water; a railcar-dumping system adopted for ore in Perth.

Interestingly, each shows the slipperiness of industrial definitions. Data collectors might deem them, respectively, investments in food and beverages, utilities and mining. But, observes SAGE's CEO Adrian Fahey, they're all manufacturing processes. "If you've got a 12-kilometre train of trucks and want to dump from them in a hurry, you must have processes that are best-in-class, high-speed, super-reliable - which we can achieve because of the knowledge we've gained from automotive about stripping out cycle time."

Manufacturing is usually presented in Australia as a discrete sector - one which, in fact, we can comfortably dispense with, on grounds that labour will almost invariably be cheaper elsewhere. Yet the manufacturing that has endured here with little encouragement, in often adverse market conditions and with few natural advantages, is often extremely good. And business knows it. The bosses of Australia's top two resources giants, BHP Billiton's Jac Nasser and Rio Tinto's Sam Walsh, are veterans of which industry? Automotive. Why? Because after a decade of effortless growth, mining is suddenly about cost.

Rio Tinto's revolutionary iron-ore operations centre at Perth Airport is inspired, Walsh says, by the model of a "vehicle assembly plant", as he saw first at Holden, later at Nissan. "In the car industry, you measure things in cents," he explains. "That cost focus, that cash focus, is awfully important. That's what I brought over to mining, a focus on every part of the business - productivity improvement, efficiency - the things the car industry has had to focus on to survive ...

"The mining industry obviously focuses on its exploration and finding world-class deposits, on mine planning, mine design and plant design. Once you've got those in place, you're probably 80 per cent of the journey. But the last 20 per cent is where the car industry excels."

At mention of Elizabeth, Walsh lights up with his own memories. "You would have seen an enormous amount of effort going into ensuring that the right component is there at the right time, in the right cycle, in the right quality and with the right skills. There are jobs there I swear you could never do in the time cycle those people have. People putting a roof lining in a car inside a minute? There's no way you could do it! But streamline, streamline, streamline, train the operators, and they do."

Though Ford was their company's perennial rival, nobody at Holden took pleasure at the demise of its Australian manufacturing operation. It hurt in the aftermath, moreover, to see the whole industry dismissed as a kind of corporate dole bludger. "Those things are extremely difficult to swallow," says engineer Nick Baloglou, another 25-year veteran. "We've got a very nice factory, very nice, with a well-trained, engaged workforce which you're probably getting a sense of. We are not 'unproductive'. We are not 'inefficient'. " He sighs. "How do we demonstrate to people what we do here, without bringing every single Australian through one by one, so that they can go, 'Holy moly, look at these guys!'?"

Solace has been drawn since from the release of the VF Commodore, probably the best car Holden has ever produced. "Every time you see one on the grass here, you just want to smile," says engineer Paul Sakowits. "We've done it: what a great car."

Morale, as a result, fluctuates. "To be honest, we're on a fine edge, and it could go either way," says Anthony Roder, who runs general assembly. "We're obviously going through a restructure. That brings uncertainty. It's a topic of conversation, as you can imagine. But now people can see the VF, there's excitement around it." Andrew Shaw, Roder's maintenance chief, still buzzes with the memory of the seamless changeover. "That was my job - to make sure it dropped on the line," he recalls. "The last VE, then the first VF after a 10-car gap. It was a big day. Our maintenance crew pulled it off. It was an unbelievable experience. I will sell this car until I'm blue in the face."

So, thanks to an additional $40 million assigned to the marketing budget, will Holden. In February, the VF was unveiled in its American alias as the Chevrolet SS when it won its debut NASCAR race, the Daytona 500. Next year it will become the first passenger car Holden has exported to the US since its parent unexpectedly terminated the Pontiac G8, based on Holden's Monaro, after the global financial crisis hit. To Elizabeth personnel, that will feel good. "There is a lot of pride at seeing things you've been involved with in the manufacturing process," says Nick Baloglou. "I've been able to travel extensively with Holden, and when I see our cars on the road in America and Korea and China, I think: 'Yes! We made that!' "

The VF affords quiet satisfaction to Elizabethans generally. Not withstanding negatives about the entwinement of the City of Playford and an industry in regular turmoil, mayor Glenn Docherty wouldn't change it. "Elizabeth has gained a lot from having a focal point," he says. "There's nothing better, I think, than looking at cars in the port of Adelaide waiting to be shipped abroad, knowing that families somewhere will be taking their kids to school or driving to a sporting event in a car we made here."

Does that mean he disagrees with Joe Hockey that industry grants are a "waste of taxpayers' money"? This is a potentially awkward question for Docherty, who will be Liberal candidate for Newland in next March's South Australian state election, but he replies without hesitation: "I do disagree with him. Yes, I do. That money has helped continue the next version of the Commodore and investment around that ... That is a good thing to do. Because we have no other plan from either side of politics."

Quite. The federal Labor government abruptly scrapped a key element of its New Car plan, the Green Car Innovation Fund, in June 2011, although it had already enabled production of the Camry Hybrid at Toyota's Altona works as well as many of the VF's weight-reduction and aerodynamic improvements. The Coalition, meanwhile, feigns rigour by promising a token cut to funds allocated under the existing Automotive Transformation Scheme and to refer the industry to the desiccated calculating machines of the Productivity Commission.

And yet ... and yet ... there remains strong support for the automotive industry, and even for its special assistance, among that curiously neglected group, the Australian public, who when polled never fail to value the proposition that their country should "make things". It could be argued that in their buying preferences they express different views, but perhaps they also subtly sense - as their increasingly detached political, economic and media betters do not - what would be lost in the way of skilful, dignified and fulfilling work if Elizabeth's assembly line ever stopped permanently.



Lead-in photograph: An FJ Holden outside General Motor-Holden's Fishermans Bend plant in Melbourne in 1953. GM Holden Ltd.

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This story was found at: http://www.smh.com.au/national/uphill-b ... 2pl0v.html