Reality check !

The news that General Motors will close it's Holden factories and quit Australia in 2017 should come as no surprise.   The " Perfect Storm " that caused that decision - a high Australian dollar - an advanced economy wage structure - and a small domestic market - have been brewing on the horizon for years.

Ford is switching the lights off in 2016 and it now seems an inevitable certainty that Toyota will eventually follow.  Car manufacturing has had an unhappy history in Australia.    Mitsubishi quit in 2008,  Nissan closed down in 1992 - and most people have forgotten that Leyland P-76 plant closure in Sydney way back in 1974.

The big car manufacturing companies have started to rationalise their operations.  For some time they have relied on government subsidies to remain in countries with unfavourable trading conditions, and these Australian closures are just part of world restructuring.   Car plants are closing in several countries because the subsidy demand was becoming rapaciously excessive.

The Australian GM closure will shed 2,900 jobs directly in Adelaide and Melbourne, but the real damage will occur in the hundreds of subsidiary manufacturers who supply the parts that go into creating a motor vehicle.   The final outcome there is unknown at this stage, but there are at least 28,000 jobs involved.

The loss of Ford and then Holden will have a scaling down of production runs by these manufacturers because Toyota will be the last car customer standing.   This loss of "economy of scale " means certain component price increases.   What they manufacture will be the " spare parts " of existing cars for years to come.

We are stepping into the unknown.   It seems certain that some of these parts manufacturers will close their doors.  Others will shed staff and survive because car parts were only part of their inventory - while others will diversify and find new markets by reinventing themselves and what they produce.

It seems certain that these plant closures will bring an upward blip in the unemployment statistics but to keep plants open by an ever increasing drain on public funds by using ever increasing subsidies to " buy jobs " was an impossible policy.

It is not all " doom and gloom ".   It is certainly a challenge to be a " clever country " and absorb these job losses by changing direction and creating a new demand.    That old axiom that when one door closes - another door opens usually takes bright and inventive minds to bring to reality.

That is the challenge that now faces Australia !