Goodbye Holden - What's next? - Andy McCourt's ReVerb

Manufacturing in Australia is about to undergo the most significant upheaval since the 1940s. The announcement by GM Holden that it will stop making cars in Australia in 2017 is the latest in a series of blows to ‘traditional’ manufacturing that began  with the 1980 exit of Chrysler, which then morphed into Mitsubishi Motors Australia until it finally closed in 2008 after losing an estimated $1.5 billion over ten years.

Nissan ceased manufacturing cars here in 1992 and now Ford and Holden will stop in 2017, while Toyota’s operations are under review. We are quite possibly staring down the barrel of ceasing to be a ‘car economy’ with $21.5 billion wiped out (Source: Monash University’s Centre for Policy Studies and Allen Consulting Group), along with about 45,000 jobs. That is approximately the same as if the entire Australian Printing and Packaging industry were to collapse. Rest assured that is not about to happen because our industry is SME-driven and not at the mercy of decisions made in Detroit or Tokyo.

Traditional manufacturing is going through a socio-economic revolution, no different to the industrial revolution that created it.  I grew up not far from the largest car factory in the world – British Leyland’s Longbridge, Birmingham plant where 250,000 were employed at its peak. It was formerly known as the Austin-Morris and then BMC factory where the iconic Mini was made. While still at grammar school, my mates and I would work there cleaning machinery and air conditioning ducts during the annual two-week shutdown. It was filthy work but the pay was great and we urchins ended each day looking like Dickesnsian street kids. My Mother once dumped my jeans and shirt in the bin rather than try to wash them. The money was fabulous to 15 and 16 year olds because we all lied about our ages (18) and received dirt, danger and overtime penalties.

This factory complex that once sustained so many jobs and families, some say an entire city, is now a technology park, housing estate and shopping mall. The remains of the car business, called MG-Rover by 2005, was purchased by a Chinese company Shanghai Automotive and, while design and development takes place, only a trickle of MG cars are assembled there, from knock-down kits imported from China. This is industrial change on an apocalyptic scale.

IT’S NOT THE END OF THE WORLD

Despite the bad news from Ford and Holden, there are positives. Some Australian after-market manufacturers, such as Harrington Industries, foresaw the inevitable and started to diversify and open offshore a decade ago. Suspension, brakes, add-ons such as bull bars, roll over protection, mag wheels and so on form a market that accounts for around 16,000 of the 45,000 jobs in automotive manufacturing here - and it exports. We should not forget printing’s contribution in the form of vehicle wraps which continue to grow to a point where ‘paint replacement’ is a viable term in the auto after-market.

The demise of car manufacturing in Australia has been inevitable for some time but I do not buy GM Holden’s Mike Devereaux’s ‘perfect storm’ explanation for one minute. The obvious fact is loss of market share to better featured, cheaper and appealing vehicles. Put another way – they’ve been making the wrong cars.  While GM Holden has been busy banging out Commodores and Ford staying with its ‘family car’ equivalent the Falcon; Australians have been buying smaller but fully-featured cars, SUVs and prestige imports from Europe. The female market has been ignored – how many women do you know with a burning desire to own a Commodore or Falcon? I would have thought Australia would be the perfect place to develop the world’s best 4WD and all-terrain passenger vehicles. Equally, we should be leading the world in solar/electric transport. We don’t because the Detroit mentality stymied any revolutionary development in favour of the same old model and easy government hand-outs.

The Tesla electric cars made in the USA, while still expensive, are an example of how our automotive industry should have been thinking 20 years ago. While our transformation to an all-imported, locally sold and serviced car platform will continue to provide jobs in showrooms, parts warehouses and garages; manufacturing should stimulate R&D, which stimulates innovation, which can make a country like Australia a world leader much in the same way as the Cochlear ‘bionic ear’ now dominates the world market for such hearing implants.

We need to be using our nation’s considerable brain-power to invent new manufacturing industries, in particular concerning Bio-Tech and Nano-Sciences.

AND SO, FOR PRINTING’S FUTURE?

Our printing industry, or more correctly printing and allied industries; has already been through a form of apocalyptic change but much more still needs to be done. Those still printing symbolic ‘Commodores and Falcons’ will not survive. Digital production techniques favour a market such as Australia – and New Zealand. Short runs of rapidly produced product, close to the markets where they are consumed, still offer the best hope for growth and profits. If you are still in the high volume, mass production offset/flexo/gravure market then heavy automation is the answer but ultimately digital print production will be your game too.

I find it quite encouraging seeing digital and hybrid digital/offset businesses changing. Companies like Focus Press in NSW, Civic Media in Qld in the signage and display space, Finsbury Green, IPMG with its move to Warwick Farm; New Zealand’s Benefitz and so many others. It shows change can be managed and managed intelligently.

BRAVE NEW WORLD?

We are yet to see the full impact of the latest forces of change and printing will not be exempt from the fall-out. A recent NASA paper presented at a future-forum in the USA asserts that we are about to move into an entirely new phase of human development. The historical phases all had massive impacts on communities:

• Nature-provided: the hunter-gatherer era of 1 million to 10,000 BC.
• Nature-controlled: the agricultural era where humankind was able to control its food chain and habitats; from 10,000BC to 1800AD. We also changed from oral to written and then printed literate societies.
• Mechanised everything: the Industrial Revolution and its subsequent evolution that created the modern world from 1800 to 1950.
• Automated everything: we are still in this phase and it includes the IT and Telecommunications revolution. Agriculture and Industry are now automated almost universally; 1950 up to 2020
• Bio-Nano: already nascent but tipped to begin in earnest by 2020. Fortunes will be made in Bio and Nano technologies and it even exists in printing with Landa’s Nanography.
• Robotisation: 2050-? By 2050, Robots will not only be running most IT, Bio, Nano, Industrial and Agricultural technology but will be able to self-replicate and possible surpass human intelligence. Robots are not just R2D2-types but can be Nano-robots used in medicine to enter the bloodstream and destroy cancerous cells for example.

If NASA’s predictions prove correct it begs the question: “What will humans do in a fully robotized, automated manufacturing and food production world?” A rather eerie expression used in the NASA report is: “Beyond human AI.” (Artificial Intelligence). Even the equivalent of Cyborgs get a mention. Humans with robotic implants and ‘second brains’ using low-energy Petaflop computing.

It’s a big question, one for the ethicists. The only answer I can come up with is more time at the beach, reading good books. It may never happen on NASA’s postulated scale but one thing is certain – we need to get ready for and embrace change at every level of manufacturing. Printing and its allied disciplines are no exception and already we can see new markets bubbling up from the IT soup such as 3D printing, printed electronics, artificial skin, super-thin tough materials, digitally-printed textiles and so on.

As an industry, we are not in a bad position compared to others; our adoption of digital processes right from the start of the PC era in 1984 and on to the introduction of full colour digital printing in 1993, continue to serve us well. And, with around 6,000 print-related businesses across the country, we have a strong foundation of family and SME organizations and no one in Detroit, Tokyo, London or elsewhere and make a single decision that will devastate the entire industry.

Wishing you all a wonderful Christmas break and I look forward to seeing you back, refreshed and revitalized, in 2014.

ENDS