Holden to end car manufacturing in Australia and import cars
UPDATE: SA Premier Jay Weatherill says Holden could close sooner than 2017, as Industry Minister Ian Macfarlane rejects claims he knew the company would quit.
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SOUTH Australian Premier Jay Weatherill has warned Holden could close sooner than 2017.
General Motors has announced it will close its Holden car-making operations in Australia by 2017, throwing 2900 people out of work.
Holden said 1300 jobs would go in Victoria when it closes its Port Melbourne engine plant at the end of 2016, and its engineering centre will close by 2017.
Holden's Adelaide factory will shut at the end of 2017, when the final Australian-made Holden rolls off the production line, costing 1600 jobs.
Speaking on ABC Radio this morning, Mr Weatherill said he had advice that Holden could cease manufacturing at its Elizabeth manufacturing plant earlier than what it announced yesterday.
However he would not say when that could be.
"I have my own advice and analysis that suggests it could be earlier," Mr Weatherill said.
"We need to be realistic. We need to be very clear-eyed about the fact that there are risks associated with that (2017) schedule.
"If people stop buying Holdens that could be a risk so we urge people to keep supporting this company."
Meanwhile, Industry Minister Ian Macfarlane has rejected Mr Weatherill's claim the Federal Government knew the car maker would quit Australia if it didn't receive guaranteed funding this month.
"Everyone understood the deadline was going to be March or April next year, perhaps as late as May. Holden at no time raised that as a showstopper,'' Mr Macfarlane told the ABC today.
"There were no signals from Holden that they couldn't accept the timeline that was laid down.''
Mr Macfarlane said he was always hopeful of keeping Holden in Australia.
"I knew we were up against it, but I was ever hopeful ... that Holden would decide to stay in Australia,'' he said.
He said money earmarked for Holden would probably now be redirected to Toyota.
"That money will go to Toyota and the component industry, providing they accept the plan that is worked out through the consultation process,'' Mr Macfarlane said.
But he flagged that workers at Toyota's local manufacturing plants needed to change work practices for the company to be globally competitive.
"We need a car industry that has work practices - I'm not saying wages, I'm saying work practices - that are similar to the countries we compete with,'' he said.
"We don't have that, we simply won't be competitive.''
Prime Minister Tony Abbott has said he wants Toyota to continue making cars locally, and has spoken with the company's local chief executive.
Holden's announcement has put pressure on Treasurer Joe Hockey to explain what the wider economic impact will be.
Shadow Treasurer Chris Bowen says car parts and components are manufactured nationwide, so there would not be a state or territory left untouched by Holden's decision.
"The loss in tax revenue, the unemployment payments right across the board will see the Australian government revenues hit, and potentially hit hard,'' he told reporters in Canberra.
Mr Hockey needed to either release or commission Treasury modelling to show what the real impact will be on the economy across the board.
Opposition Leader Bill Shorten insists a Labor government could have kept Holden making cars in Australia until 2025.
But it would have cost taxpayers about $500 million on top of the assistance the industry is receiving from government.
Unions said Holden's "devastating" announcement will leave 50,000 jobless and is tipped to rip $21 billion out of the nation's economy.
The decision places at risk the future of the only other car maker in Australia, Toyota.
"I do not believe a car industry can survive in Australia with a Coalition government,'' Mr Shorten told ABC Television today.
Labor had vowed to pump in another $500 million to the automotive transition scheme, he said.
"It would have been to the middle of the next decade.''
Mr Shorten defended Labor's record in government, especially its response to the Bracks review which recommended lower tariffs on imported cars.
"You can build all the tariff walls you like, they're never going to be big enough to stop competition.''
Former Victorian premier Steve Bracks shared Mr Shorten's sentiments.
"I think it was actually avoidable,'' Mr Bracks told the ABC today.
"I think the issue that really tolled on General Motors on their decision to now cease production in 2017 for Holden was the uncertainty in Australia.''
The car maker's parent company, General Motors, cited the strong Australian dollar, high cost of production, small domestic market and competitive global auto market as factors for the decision.
Mr Bracks said he suspected the Federal Government also influenced the exit with its "decision to take about $500 million out of assistance''.
He said another factor was probably the government's productivity commission review "which was ongoing with a divided government uncertain about whether they wanted to give assistance''.
"What the head office companies want, what Detroit wanted, was a certain path for the future ... so they could actually make production decisions now which are years ahead,'' Mr Bracks added.
He said the government needed to give Holden a "way of operating long term''.
Independent Senator Nick Xenophon slammed senior government ministers for forcing Holden's hand.
"The tipping point was those reckless comments made in the parliament,'' he told reporters, citing Treasurer Joe Hockey's dare of "either you're here or you're not''.
Former Labor industry minister Kim Carr agreed, saying the government had taunted General Motors and abused its executives.
Billions of dollars would now have to be spent to make up for the damage done.
"I am shocked, just completely shocked at how incredibly stupid and incompetent this government is,'' he said.
Tony Abbott dismissed the claims, saying the government was not prepared to "throw more money at a problem".
"There's been rumours, if you like, intelligence, if you like, circulating for months that Holden were reconsidering their position and it's good that it's now been clarified,'' he told ABC Radio today.
He said Holden had been hit by a "perfect storm" and warned it was not a time to be "playing politics or indulging in the blame game or peddling false hope".
"The South Australian Labor Government wasn't able to keep Mitsubishi, the former Labor government in Canberra wasn't able to keep Ford beyond 2016. I think it's very easy for people who are understandably upset to look for people to blame, but the fact is Holden were doing it tough in this country."
SA, Vic premiers to meet Abbott on Holden
South Australian Premier Jay Weatherill and Opposition Leader Steven Marshall, and Victorian Premier Denis Napthine will meet with Mr Abbott in Canberra today.
Mr Weatherill had scheduled a meeting before Holden's decision to quit car building by the end of 2017 was announced yesterday.
He had expected to argue the case for extra government support for the company but will now be looking for assistance for the 1600 workers who will lose their jobs along with help for the wider auto sector and the state economy.
The premier has already been highly critical of the Commonwealth for failing to provide further help to Holden to secure its commitment to building two new model cars from 2016.
Mr Marshall said he wanted to focus on developing a plan to get SA back on track.
"We all need to work together to make sure the South Australian economy transitions through this difficult time,'' he said.
A spokesman for Dr Napthine said he would be travelling to Canberra meet with the Prime Minister and his South Australian counterpart.
Dr Napthine broke the news of Holden's decision yesterday, and said it was more significant than the closure of Ford.
He had also been pressuring the Federal Government to offer financial support to Holden.
Dr Napthine told 3AW radio that he met with workers at Port Melbourne this morning to reassure them they won't be abandoned.
"The questions they're asking about are the availability for funds for retraining and they also quite rightly said that we also need to grow jobs in advanced manufacturing, food production, a whole range of areas - and that needs substantial government assistance," Dr Napthine said.
A package of substantially more than $50 million will be needed to help Victoria's Holden workers cope with the closure of local manufacturing operations, he said.
Holden says 1300 Victorian jobs will be lost when it ceases manufacturing cars in Australia
Holden's decision to stop production is now also expected to feature on the agenda for the Council of Australian Governments meeting in Canberra on Friday.
Holden to become shell of itself
HOLDEN'S shutdown will see the once iconic Aussie company become a shell of its former self and import most of its cars from the neighbouring Asian countries that have forced it to abandon its factories.
The iconic car maker triggered a storm of outrage after announcing it will no longer manufacture cars here from 2017.
READ: GENERAL MOTORS CEO TOLD MIKE DEVEREUX TO SHUT HOLDEN
And Toyota is set to follow, with the withdrawal sounding a death knell for the Australian car industry.
"It's now highly likely that Toyota will leave Australia, in fact it's almost certain," Australian Manufacturing Workers' Union spokesman Dave Smith said.
"Fifty thousand workers will be losing their job because of a decision by General Motors today.
"It's a very bleak day indeed."
The announcement has been anticipated for months and the Federal Government has been under mounting political pressure to offer increased subsidies to the Detroit-based company to ensure it continued manufacturing in Australia.
"The decision to end manufacturing in Australia reflects the perfect storm of negative influences the industry faces in the country including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,'' GM's chief executive Dan Akerson said in a statement.
By closing its Australian manufacturing operations Holden will lose critical government contracts that give preference to local car makers, which represent up to one-third of the sales of some models.
Once Holden is reduced to a sales and marketing operation it is likely to be knocked out of the top-three selling brands for the first time since it started building cars in 1948.
Holden has been the number two selling brand for the past 10 years behind Toyota, but is on track to post its lowest sales in 20 years and was overtaken in several months this year by Mazda, Hyundai and Nissan.
As it is, the locally-made Holden Commodore sedan and Cruze small car rank behind the Toyota Corolla and Mazda3 from Japan, the Toyota HiLux pick-up from Thailand and the Hyundai i30 hatch from South Korea in the sales race so far this year.
The closure of the engine plant in Port Melbourne in 2016 will cost an estimated 300 jobs, while the car assembly line in Elizabeth in 2017 will see 1600 employees out of work.
Holden boss Mike Devereux said the decision by General Motors was "irreversible" and sympathised with the workers.
"No matter which way we apply the numbers our long term business case to make cars in this country is simply not viable," said Mr Devereux.
"As painful as it is to say, building cars in this country is just not sustainable … there is nothing I can say to anybody to take the sting out of this announcement."
The Federal Chamber of Automotive Industries and the Australian Manufacturing Workers' Union have lobbied that all car makers around the world receive government subsidies.
"There is not a car on the road that doesn't get some form of Government assistance," Shadow Industry Minister Kim Carr has said.
However, foreign vehicle makers build more cars, employ more workers and export more vehicles because they are operating in more favourable economic conditions, including lower wages.
By comparison the taxpayer subsidies to Australian car makers aren't internationally competitive.
- with AAP
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