$20m Ford grant faces the axe

Poetic Justice · 06-02-2008, 12:37 PM

Source: http://www.news.com.au/heraldsun/sto...3-2862,00.html

THE Rudd Government wants to axe a $20 million grant to Ford promised by its predecessor.

The Rudd razor gang decided in December to ditch the grant, which could jeopardise plans to build a new four-cylinder Ford at its Broadmeadows plant.

But the new Government has since received legal advice that Ford could pursue a legal claim based on a breach of faith.

The Herald Sun learned of the Ford setback on the same day Mitsubishi announced it would close its Adelaide plant.

In May 2006, the former Howard government pledged $52.5 million in special assistance to Ford.

Ford has received $32.5 million, but the remaining $20 million was not due to be paid until 2009-10.

The grant was intended to help Ford start production on a new Falcon project, known as E8.

But last July Ford sought to modify the agreement so the money could be spent on developing the four-cylinder Focus.

Production of the Focus, Ford's first locally made small car in a decade, is due to start at Broadmeadows in 2011, creating 300 jobs.

But the new contract between Ford and the Government was not formally amended before the November federal election.

Sources said the Government's strategic Budget committee of Cabinet met on December 18 and discussed axing the grant.

Subsequently, the Australian Government Solicitor advised the committee Ford could sue if it proceeded with its decision.

FordACE · 06-02-2008, 12:42 PM

I hope the governement does the right thing. Taking the grant away won't help our economy. I have my faith in the labour government though

**Polyal** · 06-02-2008, 12:44 PM

I think that would be the stupidest thing the gov could do right now, wont happen. Plus AU20M isn't that much to the US in comparison.

TZENU · 06-02-2008, 12:47 PM

We are trying to strengthen the economy not weaken it... I cant see realistically the government pulling the pin though.. Well hopefully not

Poetic Justice · 06-02-2008, 12:49 PM

Yeah but what do the masses care about... Buying locally built cars, or letting the government make the biggest amount of budget cuts they can so as to restore faith in interest rates?

**Polyal** · 06-02-2008, 12:52 PM

Quote:

Originally Posted by blackout

Yeah but what do the masses care about... Buying locally built cars, or letting the government make the biggest amount of budget cuts they can so as to restore faith in interest rates?

Cutting that wont do jack for interest rates. The rates are largely out of the govs control.

They sook about changing with the times, well here it is, I cant for the life of me see this happening.

XCSEDAN · 06-02-2008, 03:53 PM

man i am so glad we have labour, they just know so much about running the country, best thing that ever happend to australia

/sarcasm

told you so.
they are stupid if they go through with cutting the grant, ford is been co-oparative, creating 300 new jobs etc, government doesnt seem to care at all...

TZENU · 06-02-2008, 04:09 PM

With the threat of legal action i don't think the government has much of a choice but to honour the remaining 20mill

Oh the beauty about living in a democratic country

FGII-XR6 · 06-02-2008, 04:14 PM

what next another "recession we had to have "

F6 R-Spec · 06-02-2008, 04:24 PM

Quote:

Originally Posted by au3xr6

what next another "recession we had to have "

hahahahah

I heard that money was promised to the unions, MUA here to stay!

4Vman · 06-02-2008, 04:21 PM

this Is An Unmitigated Disgrace If Its True And Does Happen.

:

Nikked · 06-02-2008, 04:44 PM

Wow, thats real inteligent government work there.

ClevlndStemer · 06-02-2008, 05:37 PM

I've never been a fan of government handouts for upcoming models. Why should governments prop up businesses who keep building mediocre products.
I am all for government grants into building products that show innovation and big benefit to the community.
The shift of the $$ to the development of the Focus is a much better idea, the plant would be more flexible and it would keep people in work.
I hope the government keep their contribution, it can lead to Ford AU keeping some manufacturing here.

**Polyal** · 06-02-2008, 05:47 PM

Quote:

Originally Posted by ClevlndStemer

I've never been a fan of government handouts for upcoming models. Why should governments prop up businesses who keep building mediocre products.
I am all for government grants into building products that show innovation and big benefit to the community.
The shift of the $$ to the development of the Focus is a much better idea, the plant would be more flexible and it would keep people in work.
I hope the government keep their contribution, it can lead to Ford AU keeping some manufacturing here.

I agree with that to. Dead wood shouldn't need help keeping afloat. But in this case its different as its actually a move in the right direction for once.

MRJUCY · 06-02-2008, 05:57 PM

One of Labor's election promises was to ban all government fleets from buying Australian built cars so I guess it fits in with their policies. I expect they'll come good on the money tho especially with Mitsubishi pulling out & a little union pressure but if it does go to court I hope they get their ***** handed to them even tho it will be us paying for it of course.

dishpig · 06-02-2008, 06:47 PM

Quote:

Originally Posted by MRJUCY

One of Labor's election promises was to ban all government fleets from buying Australian built cars so I guess it fits in with their policies.

Why on earth would they not buy locally made cars, I can't see the benifit in that, hey lets screw over the little guys.

ClevlndStemer · 06-02-2008, 07:52 PM

Quote:

Originally Posted by dishpig

Why on earth would they not buy locally made cars, I can't see the benifit in that, hey lets screw over the little guys.

Governments are being run like businesses, as they should.
While some may think money gets thrown around willy nilly, it doesn't. I have worked with many Government departments, mainly state, but they are still accountable for their budgets.
If they can get a better deal elsewhere (better lease price, resale, etc) then why not. They usually try and get cars with better resales so as they don't lose too much at change over time.

GS608 · 07-02-2008, 07:22 AM

Quote:

Originally Posted by ClevlndStemer

Governments are being run like businesses, as they should.
While some may think money gets thrown around willy nilly, it doesn't. I have worked with many Government departments, mainly state, but they are still accountable for their budgets.
If they can get a better deal elsewhere (better lease price, resale, etc) then why not. They usually try and get cars with better resales so as they don't lose too much at change over time.

so if toyota give the police force a better deal with that heap of hybrid car..we'll end up seeing them as cop cars? yeah that'll work out great
:togo:

ClevlndStemer · 07-02-2008, 08:26 AM

Quote:

Originally Posted by XR-CHIEF

so if toyota give the police force a better deal with that heap of hybrid car..we'll end up seeing them as cop cars? yeah that'll work out great
:togo:

_ Do you really think the police force would be looking at that type of vehicle?

I would have thought common sense would be used, for standard fleet unless there is a need for a Falcon/Commodore then why would they go for that when the value currently is in the smaller economical cars?

ltd · 06-02-2008, 07:34 PM

The ear wax eating muppet only wants hybrid cars; presumably so he can create more smug and smell his own flatulence like on South Park.

I would rather sell chop out my own liver than vote for the troglodyte bunch, so don't blame me.

steamin63 · 07-02-2008, 12:51 AM

why should the government give away our tax dollars to prop up any big business .interest free loans maybe ,but grants no way. how much money did the government pour into the inline 6 only to have ford pull the plug on it.

RPO83 · 07-02-2008, 01:37 AM

Well done to the Rudd Labor Government's 'razor gang', the previous government would have simply called them minister for finance and treasurer but why not dumb it down for us. I hope this 'razor gang' move is not all motivated from FoA giving donations and openly supporting the Coalition.

I'll be very interested to see how this pans out, Ford have a small window right now where they have the option to pull the pin on the whole plan which wouldn't exactly come without an exit strategy.

The Rudd Labor Government is vehement on pushing the hybrid car with substantial cash grants on offer in a market where it is not financially viable to do such a thing according to industry experts, not to mention a long term timeframe would be needed in a market that needs real solutions now. The Focus is an economy car but does not have the much important 'hybrid' buzz word attached to it. The Australian automotive industry is far better off being granted assistance aimed at aligning the industry into producing more efficient C/D cars and small cars like the Focus that produce short term viable outcomes. The market would have their popular economical cars assembled here, keeping the environment and our manufacturing industry far better off.

RPO83 · 07-02-2008, 02:46 AM

Looks like they have taken advice not to pull the grant which is good to see.

ltd · 07-02-2008, 07:51 AM

OK, lets be clear about a couple of things here. The government should not pull assistance in the form of R&D grants for many reasons. The first obvious one is that they don't necessarily want large factories like Ford to close down. Imagine the bad press for the PM, and Rudd being a populist as effective as a wet lettuce leaf you can expect him to not do anything decisive that could result in bad press. Secondly is the fact that the previous ALP administration tried to abolish tarriffs which began the demise of the Australian auto industry. Yes, this was done for many reasons etc but tell me, which countries exactly don't have tarriffs or embargoes to protect their auto industry? Thirdly is the cost of thousands of employees now looking for benefits on the public purse which will amount to a number far greater than the 20 million grant they had. Fourthly is the fact that the liberal government was trying to lure investment into the country through R&D grants which are more enticing than a country which does not offer them. They were also trying to stop an exodus of companies taking advantage of cheaper input costs in foreign markets such as China and India.
Finally, the onflow effect of Ford closing would affect over 20,000 people both directly and indirectly (suppliers); that's more votes than Rudd took office with.
BTW, they are going to away more than 20 million on useless enquiries and buraucracy anyway, I'd much prefer the money go to ford.