Was Joe Hockey’s famous threat against Holden behind company’s shock exit?
The beloved car brand’s days are now numbered – but a politician’s furious 2013 threat might have ultimately sealed its fate.
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Aussies are still reeling from the shocking news Holden will exit Australia within months.
But as the reasons behind the dramatic withdrawal are being analysed and dissected across the country, one six-word threat made seven years ago has come back to haunt car lovers – and the Government.
It was 2013 when former Treasurer Joe Hockey famously dared Holden to leave the country following a frustrating back and forth over government subsidies to the carmaker.
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At the time, the local car-manufacturing sector was grappling with the high Aussie dollar and rising production costs when the Coalition government refused to boost its subsidy to the industry.
The Abbott government wanted to slash the subsidy by $1.63 billion to $1.02 billion, and Holden was playing coy about its commitment to Australia and Australian manufacturing.
That’s when a clearly irritated Mr Hockey urged the company to “come clean” over rumoured plans to shut down in Australia and notoriously daring the auto giant to leave.
“We want them to be honest about it, we want them to be fair dinkum,” he declared in parliament.
“Because if I was running a business and I was committed to that business in Australia, I wouldn’t be saying that I haven’t made any decision about its future.
“Either you’re here or you’re not.”
Those six final words were seen as little more than a politician’s bravado at the time – but in the wake of Holden’s announcement yesterday, they now seem more like a prophecy.
Of course, the company limped on until 2017 when it pulled out of Australian manufacturing before announcing late last year it would stop selling its most iconic car, the Commodore.
Yesterday’s announcement it was abandoning the Aussie market altogether was just the final blow following a years-long demise.
HOLDEN ‘CHASED OUT’
After Holden revealed it would end Aussie manufacturing and close its Adelaide plant in 2017, former South Australian premier Jay Weatherill placed the blame firmly on the Coalition’s shoulders, claiming it had “chased out” the brand.
According to the ABC, Mr Weatherill said he was present at a meeting where Holden made an offer to remain in the country that the Coalition “ignored”.
“Every country in the world that has a car industry subsidises it,” Mr Weatherill said at the time.
“There’s about 19 countries in the world that make cars. If you want a car industry, they are the rules of the game.
“I think we should have kept the car industry.”
SUBSIDY BACKLASH
But now attention has turned to the generous subsidy Holden did receive, with the Federal Government lashing out at General Motors for “walking away” from the Australian market and killing off the iconic Holden brand after accepting billions of dollars to keep its operation afloat.
In 2013, it was revealed the car manufacturer had been gifted a staggering $2.17 billion in subsidies over just 12 years to help keep the thousands of jobs ticking over – a figure far higher than previous estimates.
“I am disappointed but not surprised,” Prime Minister Scott Morrison told reporters yesterday in response to the Holden bombshell.
“I am angry, like I think many Australians would be. Australian taxpayers put millions into this multinational company (but) they let the brand just wither away on their watch.
“(It’s) very disappointing, that, over many years, more than $2 billion was directly provided to General Motors for the Holden operations.
“Now they are leaving it behind.”
According to UTS Professor Roy Green, an expert on innovation and manufacturing, while Australia’s car industry was tanking, there were some small to medium-sized enterprises specialising in car components that were “doing extremely well” and exporting to “global markets”.
He told news.com.au that he didn’t believe the subsidy should have been withheld, but it could have been put to better use.
“In retrospect … just imagine if the (same) level of subsidy went into growing the components industry as went into assembly – imagine where we might be placed?” he said.
“I wouldn’t like to say they shouldn’t have (provided a subsidy to the industry) because it certainly maintained employment for a very long period and enabled the growth of high-skilled jobs in an important global industry, but it didn’t prepare us for the future.
“A lot of that subsidy should have been targeted at the industry’s restructure and transition.”
Originally published as Was Joe Hockey’s famous threat against Holden behind company’s shock exit?