Sussan Ley (Farrer, Liberal Party, Shadow Minister for Justice and Customs) Share this | Hansard source

I appreciate the opportunity to speak on Appropriation Bill (No. 3) 2008-2009 and the related bill. Appropriation bills, as the parliament knows, are about appropriating dollars for government to go about the very important business of funding activities and services within Australia. I want to focus today on a particular concern in my electorate of Farrer, and that is the future of a company called Drivetrain Systems International, or DSI. DSI presently finds itself in a very difficult trading position—not, I have to say, of its own making and certainly hugely influenced by the global financial crisis.

I asked a question in the parliament today on behalf of the constituents of my electorate, in particular those in Albury. I asked Mr Rudd for support for Drivetrain Systems International under the Green Car Innovation Fund and, most importantly, for support for the 400 workers and their families who are facing redundancies and job losses. You can imagine that 400 workers lost in a town like Sydney or Melbourne would be quite a shock. Let me tell you that in a town the size of Albury it is savage, is unexpected and will have long-lasting ramifications if in fact those jobs are permanently lost. So my purpose today is to raise this issue in the Parliament of Australia to make sure that we draw a line in the sand if we possibly can for the future of this company and manufacturing in Australia, especially innovative manufacturing, and for job losses that I do not think need to go ahead.

Let me clarify that. The company DSI is currently facing liquidation and that, I think, is fairly inevitable. But, following this, the receivers and managers are looking to sell it as a viable proposition, possibly to a global car company. Local reports have identified Mahindra, from India, and Geely, from China, as possible purchasers for the company.

We are focusing on two things. The first is the welfare of the workers who, as I said, are facing redundancy. Because the money is not there to pay entitlements—in some cases, accumulated over 20 or 30 years—they are enormously worried and angry about the situation they find themselves in, and that is understandable. So I am focusing on the welfare of those workers, to make sure that we provide whatever government services are available should they—as it seems inevitable they will—face redundancy and be unemployed for a period of time As we know, that time in a person’s life is the most stressful.

The second thing we are focusing on is this. On the other side of the equation, I want to be positive and to focus on the future, because while Drivetrain Systems International, I am certain, will be no more—it has had receivers and managers appointed, and is in voluntary administration—I very much want to see a company, if possible a local consortium, take on this company, under a different name obviously, and continue trading and manufacturing transmissions in Australia. That is the most important thing.

Let me make it very clear: this is a viable, profitable business. The company DSI has had several incarnations. It is often called by the locals ‘BorgWarner’, because that was what it was for many years, and then it was BTR and then ION, and then it became DSI. So it has travelled a difficult road at times. But it is important to note that it is basically viable. There is no doubt that BTR and BorgWarner took sizeable profits from the company and it provided a lot of returns for the people of Albury and their families. It is actually doing now exactly what we want an Australian export focused company to do. In fact, I think we need another 15 DSIs. Remember that our future lies in integrating ourselves with global trade, and nobody here is talking about protecting Australia from overseas trade influences. The important thing is that Drivetrain Systems International is manufacturing the most elaborately transformed manufactures—and that is a technical term—in Australia today. It is world class. It is competitive on the world stage. It is all-Australian. And 35-plus years of technology have gone into this company.

I want to stress the key role that this company plays in manufacturing technology and consequent spin-off employment in Australia. Over all of the last 40 years, DSI and its predecessors have developed a great deal of technology. And that technology has been highly sought-after by overseas companies. Interacting with DSI has helped other companies hone their skills which, in turn, have been transferred to other high-tech manufacturers throughout Australia. So it has played a critical role across Australian manufacturing industry, and allowing it to disappear would actually undo a great deal of this work, much of it done in the 1920s and 1930s—part of industrialising Australia and making it a world-class economy. So, as I said, this company is doing exactly what we want it to do. With all our AusIndustry and export focused programs, we have the perfect example here.

The receivers, I presume, are looking for overseas purchasers and domestic purchasers, too. I would like to make a plea to our industry minister and to our government to turn their attention to this problem and to engage with what is happening in Albury. I would like to see a local capital-raising, a new management team, perhaps a stock market float. But to have a successful local company, I think we need a local customer—if we are serious about manufacturing in Australia and an automotive industry. That local customer has for many years been Ford. Ford has played a critical role in the development of DSI. I thank them for what they as a company, Ford Australia, have given to my local regional economy and industries over so many years. The company at the moment is finalising the manufacture of a four-speed gearbox for Ford, and also has in its production capability a six-speed, rear-wheel drive gearbox, also for a later Ford model.

DSI has invested—I read in the press today—about $40 million on developing a gearbox for its major current customer, which is SsangYong from Korea. This is a front-wheel drive, six-speed electric gearbox. As many know, SsangYong is currently in receivership and discussions are being had between it and its Chinese parent about whether it will in fact cease manufacturing in Korea altogether. This is the point: the main customer of Drivetrain Systems International has folded, as a result of the global financial crisis, and that has put this company, and Australian transmission manufacturing, in a very difficult position.

It is also the case that DSI has manufactured, or has gone a large way towards manufacturing, a hybrid petrol-electric gearbox. That might have been for SsangYong, its main customer; I am not sure. There is no doubt that I am not an expert on types of gearboxes or whether there are gearboxes looking for cars or cars looking for gearboxes in different parts of our manufacturing industry, but what I do know is that it would be a tragedy to lose this manufacturing industry from Australia.

There is no doubt that the worldwide auto industry is in a very difficult position. I understand that Volvo in Sweden is close to closing, and there are huge bailouts happening across Europe and America. General Motors Opel in Germany is receiving, or has asked for, a $7 billion bailout. The amount of dollars that we are talking about here—the support that we are asking for from government—is not large, but it would not be in the form of a bailout either. We are talking about basically a viable production process going through a difficult period. Some have said that to continue manufacturing for the next few months for Ford would be like a bridge to the future, when hybrid transmissions are going to be far more in demand. That is something that the government and its green car package should be supporting.

As local members, we know that, when we are looking for assistance for industries in our electorates, we need to find a government program, and, once we have found one, we sometimes have won half the battle. There is a government program in this instance, and it is called the Green Car Innovation Fund. The Prime Minister and the Minister for Innovation, Industry, Science and Research, Senator Carr, in December last year promised that $6 billion would flow under this fund to support the Australian automotive industry and to keep manufacturing here in Australia. Applications for the fund open in July this year, so it is not possible for them to be made at this stage, but I really hope that our government will sit down at the table with the people who have the future interests of this company or this type of manufacturing at heart, and with Ford Australia, and demonstrate what they, as the government, could provide in support under the green car fund.

As I told these workers that I represent—400 families in the district—at a meeting last Friday, I do not want to fight for their Centrelink benefits; I want to fight for their jobs. I know that the company they work for is folding, but it is so very important that another company takes its place. For us to lose the intellectual property, the research and development—as I said, a hybrid gearbox, a new generation six-speed electric front-wheel drive gearbox, which is the way of the future—and for that all to be packed up and sent overseas, perhaps to China and India, would be a tragedy for Australian manufacturing.

I asked Mr Rudd about this in question time. I hope that he will turn his attention to the question that I asked. The Prime Minister did not appear to be in tune with what was actually happening with DSI. That does not surprise me, because he has got a lot on his plate at the moment, but, having asked the question, I hope that he and his office now turn their attention to what is going on here and take sensible steps to rescue an Australian manufacturing industry that is a world leader in innovation, research and development.

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