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High tech plan to prevent another Le Cornu at Holden site

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A wholesale shakeup of the tertiary sector and reform of BioInnovation SA is set to be outlined in the June state budget, with a multi-million dollar investment in transitioning the South Australian economy beyond its fatal reliance on outmoded auto manufacturing, InDaily can reveal.

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Premier Jay Weatherill spoke to InDaily today at 4am Adelaide time, minutes after his meeting with Detroit-based General Motors executives, when he hinted at a broad, multi-faceted plan to seize the opportunities of new technology – in a bid to stop the doomed Holden operation’s Elizabeth hub becoming another Le Cornu site.

“That’s exactly the risk we’re trying to mitigate,” Weatherill said.

“That’s what we don’t want, and we’re insisting that would be a negative legacy in destroying GM’s brand in Australia.

“They’re conscious of that; they want to leave the site with something that leaves a positive impression of them.”

To that end, Weatherill has demanded a multi-million contribution to the northern suburbs community, to “pay some respect for the fact the community has supported them over the last number of decades”.

No commitment was forthcoming.

But the Premier says: “I think they understand… leaving it vacant is not an option.”

“It’s their site… they’re proposing lots of ideas [but] I think they want to divest themselves of it.”

There are substantial resource implications, but the guts of it is making sure we’ve got strong innovation policy

In the meantime, “they’re proposing constructive proposals like using it as a test facility” for driverless cars, with GM moving aggressively into the autonomous vehicle market.

The company recently acquired Cruise Automation, a software company dedicated to self-driving car technology, with plans to accelerate its development of autonomous vehicles.

GM has also invested $500 million in Lyft – a ride-sharing startup and rival to the controversial Uber.

The Government is poised to release its response to an independent review of the taxi and vehicle hire market, which is likely to fit within its broader plans to encourage local investment in emerging technology.

Weatherill said GM outlined a vision for growth in four key areas – autonomous vehicles, electric cars, car-sharing and “connectivity of inputs” – and he’s evidently determined to maximise South Australia’s potential to capitalise.

“We’ve undertaken a very substantial exercise over the last nine or so months, about what it would look like to have that innovation system in SA,” the Premier told InDaily.

“We’re in the final stages of consideration of that policy – it’s something we expect to land around budget [day].

“There are substantial resource implications, but the guts of it is making sure we’ve got strong innovation policy, making sure our institutions such as BioInnovation SA are somewhat reformed to play the role they need to play, that we get research ideas out of our universities and making sure we can commercialise them… and making sure we’ve got the venture capital to support this entire process.”

That reform’s impetus might have been hastened by the fact BioSA chief executive Dr Jurgen Michaelis is currently facing charges of abuse of public office, after an ICAC investigation.

Nonetheless, Weatherill said there were opportunities to build on areas of relative strength, including food manufacturing, health industries and information and communications technology.

“We think it’s a very exciting opportunity for SA,” he said.

The changes that have occurred in the last five years are faster and more profound than in the previous hundred

He said he would encourage GM to use part of the Elizabeth site – and others around Adelaide – as a test facility, exploiting a shared partnership with Carnegie Mellon University.

“GM have a long-term partnership with Carnegie Mellon… we want to insert ourselves into that research supply chain,” he said.

“What GM said to us is in the changes to technology that have occurred in the last five years are faster and more profound than in the previous 100, and they can see that rate of change accelerating.”

Weatherill said the shift was in remaining a cog in the auto manufacturing industry, “but being part of broader innovation agenda”.

And, he said, the shift is “already happening”, through companies like local Cohda Wireless, whose technology is used in autonomous vehicles around the world.

“This is a fast-changing and dramatic landscape, and we want to be a part of it,” Weatherill said.

He said Adelaide needed to emulate the feats of “so-called rust-bucket states more generally”, such as Illinois, Pennsylvania and Michigan, where “what’s emerged over the last couple of decades is quite exciting and interesting, with the transformation of the economy of each of those major cities and regions”.

He said Pittsburgh had gone from around 20 per cent unemployment to just over four per cent, off the back of a quarter of their workforce now being comprised of high-tech jobs.

“These are well-paid jobs, better on average than the rest of the economy,” Weatherill said.

“It’s really a relationship of taking the old skills and capabilities and getting industry working with investors and innovators – they call it the ‘innovation ecosystem’… students coming up with smart ideas through their research and matching up with entrepreneurs and venture capital to take them to scale.

“This whole innovation system has been at the heart of the transformation of the rust bucket states, and it’s been a successful transformation.”

He said unlike some of those US states, which “actually hit rock bottom… fortunately we’ve got a pretty diverse economy”.

Weatherill and his entourage toured “Mcity”, a mock-city built onsite at the University of Michigan for the testing of driverless cars – a concept he wants to develop locally, likely in conjunction with Adelaide campuses.

“We need different test facilities in different jurisdictions, essentially,” he said.

“There are different [driving] conditions that occur in different places in the world that need to be modeled [as well as] different driving behaviours and different regulatory arrangements.”

7/20/15 Mcity grand opening

Autonomous vehicle technology being tested at MCity’s grand opening last July. Photo: University of Michigan.

He said there may be implications – both commercial and ethical – from a road safety perspective.

“We’re still killing 100 people a year [on] our roads, and 90 per cent of those deaths are avoidable… there are technological developments that could minimise road deaths,” he said.

He also raised Holden’s phased shutdown with GM management, in what he said were “positive” discussions.

“We sought assurances they would do the right thing by workers, the local community and the broader SA economy about how they deal with the arrangements,” he said.

He said they were assured, as GM has previously insisted, that the closure would be “world’s best practice in terms of transition, information, time off for workers to try to plan for their future and redundancy”.

“That’s consistent with what they’ve said [previously],” he said.

Remediation of the site remains a contentious point, but Weatherill insists “they have obligations under our state remediation legislation”.

“We’ve got quite strong legislation and those obligations sit with them… we’re in discussions with the EPA and they’ll be submitting a plan to deal with that.”

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