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Manufacturing reaches crisis point (opinion piece)

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Manufacturing is going through a major transition period. 

There are dark days ahead for automotive manufacturing. A series of unfortunate events have culminated into what even the Australian Motor Industry Federation chief has labelled a 'perfect storm'. 

So how did we get here, and where to next? 

This is what we are asked here time and time again. 

The 'how did we get here' question is obvious, a high Australian dollar, cheap foreign imports, a lack of support for the continuation of the manufacturing industry - there are a number of well known factors that caused this current situation. 

The only upside for Australian manufacturing is the fact that it seems to be a global phenomenon, and not just a localised one. 

But that does little to salve the pain of the manufacturing contraction. 

After all of this, the question that everyone is asking, and not many seem to have an answer for is 'where to from here'? 

Where do we go now, and how can we do that in the most painless way possible; because the current situation in the industry, no matter what way we look at it, will only be resolved by much belt tightening, more than likely a few more job cuts, and a Federal Government that realises the importance of the industry to Australia - the most difficult part of it all. 

Manufacturing is going through a major transition period, the likes of which has not been seen since the industrial revolution, and this change will be hard. 

Yet the hardest part won't be for the actual car manufacturers - Holden, Ford, and Toyota. Their fate is basically already written. Those that will be hardest hit and need to look at how they can continue into the future will be the Australian companies that supply automotive components to these manufacturers. 

People such as Futuris, SMR Automotive, Precise Global, and Quality Plastics and Tooling are the ones that will feel the brunt of it, company wise. 

In fact Futuris has seen a downturn already.  

One commentor on our website, www.manmonthly.com.au, made a cogent point - "If we have manufactured components for cars in the past, what is stopping us exporting them even if we no longer produce cars?" he asked. 

"What's happened to reverse engineering? We did it with things like crusher wear liners, so why not with car parts? After all, buy one car and strip it down and get the information we need to produce replacement parts. No industrial espionage, just genuine reverse engineering," the commentor states. 

Is this possible? 

Can Australia become an exporter of quality automotive components and somewhat weather this 'perfect storm'? 

Not without government support. 

And in the run up to the election we will see just how important manufacturing really is.

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