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Can't that argument be applied to most produces that are now produced in places like China? We aren't saying that Australia shouldn't have engineering and devel
by robryan 13y ago
Can't that argument be applied to most produces that are now produced in places like China? We aren't saying that Australia shouldn't have engineering and development skills in these areas. Manufacturing and assembly absolutely makes economic sense not to be done here, unless you are in favor of lowering the minimum wage.
- tankenmate 13y agoThat's not my argument, it costs money to transport goods to the market; in this case cars and trucks from Japan, Korea, and to a lesser extent US and Europe, to Australia. These goods have a mark up above and beyond the cost of manufacture (i.e. the profit), typically at a percentage. So the cost of shipping mined bauxite and iron ore to Japan, Korea, China, then manufacture, then shipping it back with the concomitant margins for all the players in between. Why not go back to manufacturing steel, aluminium, the parts then cars? In the end the cost of rebuilding that institutional knowledge will be so high that Australia is forever locked out of manufacturing; even if capital costs aside it would be profitable to do so.
- robryan 13y agoBecause despite the freighting costs a country like China can still make cheaper cars for our market. Even if the whole chain is here it is likely going to still be more expensive. If this wasn't the case then it wouldn't have been slowly dismantled over time.
- tankenmate 13y agoMy whole point is that this advantage that China has might be illusory, what if in 5 years time the balance of wages in China and the cost of fuel goes up? China moves to robots? Why not have robots in Australian factories with Australian know-how?