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GONE

Rick-Davies-Gone

It’s now almost exactly 14 years since I decided I needed to find another career. January 1999. The BMW X5 had just been released at the Detroit motor show and I was in the Corporate Planning division of Mitsubishi here in Adelaide.

The large car segment in Australia was already in decline and had been for a while. Tariffs, fuel prices – a number of things were having an impact. With Australia lagging the US trends by about 5 years it was pretty clear what the next “big thing” was going to be. SUVs.

Of all the Australian manufacturers, Mitsubishi was best placed to respond. The entire fleet, including the then current platform the Magna sedan was based upon, was available in 4WD. Drop the Magna wagon at the next model change, due in 3 to 5 years and replace it with an SUV, just as was later done in the US (though not with much success there, I admit, but maybe there were other issues at play in that market). Move the rest of the fleet to 4WD.

I did float the plan and whilst it was acknowledged as having merit, it nevertheless didn’t get past the first step. MD said no. I walked out of his office and started to think about what I needed to do to prepare for the day when the company stopped making cars in Australia. I chose law. Commenced external studies in 2000. Admitted to practise in December 2004, 9 years and 5 days ago.

In the mid 90s, the three top selling cars in Australia were doing over 20,000 units between them. Commodore and Falcon up around 7,000 to 10,000 a month and Mitsubishi around 5,000 Magnas.

In 2013, the TOP selling car in Australia, Corolla, did less than 3,900 units. The next 3, Mazda 3, i30 and Commodore each ran up figures in the low to mid 3 thousands.

Australia is an open market for cars. What happened today is a sad, inevitable reflection of that open market. Toyota won’t be able to stay on its own, as the supplier industry won’t have the volume to survive. No matter what car it produced here, it just couldn’t get decent, long term volume. When, not if.

And what next? The engineering, manufacturing and management skills base of this country will suffer from the loss of the automotive industry. There will also be a lot of people looking for work. For many of them, alternative employment will be very difficult to find.

My guess back in 2002 when I left Mitsubishi was that it would only keep manufacturing for another 3 years or so. I figured the PS41 (US designed Galant that was the 380) would be canned before it got to production. I was wrong, but only missed the end date by a couple of years. I thought then that Ford was the next most vulnerable, then GM and finally Toyota. I gave them 10 to 15 years. Unfortunately, I was pretty much around the mark.

It’s a sad day today, but one that I’ve seen looming for nearly 14 years.

My condolences to all those that will be hit by the news.

Rick

Oh – the photo. There used to 12 Apostles. No more.