Holden planned to stop taking government handouts 15 years ago — then accepted billions of dollars

A FORMER Holden boss has revealed he did a deal with the Howard Government to put an end to car industry handouts.

Former Holden boss Peter Hanenberger says there was a plan to wean the Australian car industry off government funding 15 years ago. Picture: Supplied.

HOLDEN had planned to stop taking taxpayer cash 15 years ago — but a change to the Rudd Government saw the car giant ask for more.

The manufacturer received more than $2.17 billion in government subsidies over 12 years — double the amount Ford and Toyota received in the same period — but it was still not enough to save the planned closure of its car assembly line next year.

The bombshell revelation to end government handouts to the car industry is made in a book to be released this week called “Holden: Our Car”.

In the book ‘Holden: Our Car’ former boss Peter Hanenberger says the Australian car industry could have survived without government funding. Picture: Supplied.

The book quotes former Holden boss Peter Hanenberger, who led the company between 1999 and 2003, a period of record sales for Holden and the Commodore — and also the last time Holden was the top-selling car brand, in 2002.

“It was under the Howard Government with (industry minister Ian) Macfarlane that we negotiated a deal at that time — in 2000 or 2002, it was — that we committed to have no more support by the Australian government. For that, we got $2.5 billion to make this industry a modern, globally based industry,” said Mr Hanenberger, who hinged his plans on exporting the Commodore to Europe and the USA.

Former Holden boss Peter Hanenberger with a shipment of Holden Monaro coupes to be sold as Pontiacs in the USA, in 2003. Picture: Darren Seiler.

When asked about Holden’s plan to wean itself off government assistance, Mr Macfarlane told News Corp Australia: “Hanenberger gave me an assurance that they (Holden) wouldn’t be back for more money after 2015”.

Furthermore, Mr Macfarlane added, “the amount (Mr Hanenberger) is referring to is the amount just for the (three car manufacturers). There was more money on top of that for the (automotive parts supply) industry, and the whole package was worth $4.3 billion with a ‘B’.”

Mr Macfarlane said it was “definitely” General Motors’ position at the time that it could build cars in Australia without government assistance.

“John Howard and I and Peter Hanenberger all shared the same view, that this is it: this is $4.3 billion between the manufacturers and the component people and it was to get the industry on its own two feet,” said Mr Macfarlane.

Then Federal Industries Minister Ian Macfarlane visiting the Holden factory in Elizabeth, South Australia, in 2013. Picture: Supplied.

In a statement to News Corp Australia, Mr Howard said: “I was certainly supportive of an approach which steadily eliminated government support for the industry. Of course I (am) sorry to see the end of car manufacturing in Australia by Holden. (But) I agreed with the stance taken by the Abbott Government (to cut car industry funding).”

When the Howard Government was replaced by a Labor Government under Prime Minister Kevin Rudd in 2007, the car industry negotiated another $1.5 billion-dollar funding boost.

“When we lost government, we lost grip of pushing that plan (to cut government assistance),” said Mr Macfarlane. “I think the Labor Party went a bit soft on the car industry and gave them more money and no conditions about export, and that’s really where the wheels fell off.”

The Adelaide-built export version of the Holden VF Commodore — the Chevrolet SS sedan — on the road in the US. Picture: Joshua Dowling.

However, Mr Macfarlane says he is “not blaming the Labor Party, because in the end, getting the industry to export was what it was all about, but they (the Labor Government) didn’t load the extra taxpayer assistance on (exports). Holden didn’t like the export concept either.”

Senator Kim Carr was industry minister at the time and is credited with doing a deal that saw the Cruze small car built alongside the Holden Commodore, Toyota locally produce the hybrid Camry, and Ford introduce a four-cylinder Falcon sedan and diesel-powered Territory SUV.

The funding boost — based on producing more economical cars — was designed to prolong the manufacturing future of Ford, Holden and Toyota in Australia.

An Arizona police officer with an Australian-made Holden Caprice, exported to the US as a Chevrolet police car since 2010. Picture: Supplied.

However, Senator Carr told News Corp Australia: “At no point have General Motors said to me that they could survive in this country without public co-investment. And it’s demonstrated by when the Liberal Government chose to drive General Motors out of Australia. They did it by cutting government support.”

“The claims that (Holden) could get by without co-investment means that they could do something in this country they could do nowhere else in the world. It’s a nonsense, a complete nonsense,” said Senator Carr. “There is not a place in the world that has an automotive industry without support from the government.”

Senator Kim Carr at the start of production for the Holden Cruze small car in Elizabeth, South Australia. Picture; Supplied.

When approached by News Corp Australia, Holden declined to comment on what it said were private discussions between one of its former bosses and the government of the day.

In December 2013, Holden announced it would shut its local manufacturing operations in 2017.

The confirmation came just one day after then Treasurer Joe Hockey goaded General Motors with his now famous “either you’re here or you’re not” speech — a reference to Holden negotiating to continue manufacturing in return for further government funding.

Holden was asking for another $750 million -- $150 million per year — to build the next generation Commodore from 2016 to 2020.

A month after Holden’s announcement, Toyota said it would close its Camry factory in Altona, also in late 2017, because without Ford and Holden there was not enough output to support businesses that made parts for all three car makers.

Ford workers send off the last Falcon ute (centre) on the Broadmeadows production line on 29 July 2016. The factory will fall silent forever on October 7 2016, when the last Falcon sedan and Territory SUV are built. Picture: Supplied.

When asked about the shutdown of the Australian car industry, which starts when Ford closes its Broadmeadows assembly line and Geelong engine and stamping plants on October 7, Senator Carr said: “My view is that this is a national disaster and it is totally unnecessary. It came about because of deliberate government policy to drive General Motors and Toyota out of Australia.”

This reporter is on Twitter: @JoshuaDowling