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by Jez Spinks

Holden says it is getting closer towards announcing co-investment from the Federal Government and parent company General Motors as it looks to secure the local manufacturing of the Cruze and Commodore beyond 2018.

Australia’s Minister for Manufacturing, Kim Carr, and South Australian Premier Jay Weatherill have been in talks with GM at this week’s 2012 Detroit motor show as part of a political delegation seeking future support for the Australian car industry.

Carr joined senior Ford Motor Company executives yesterday in announcing a new $103 million co-investment program that would be used for 2014 updates to the Falcon and Territory to keep the locally built large car and SUV going until at least the end of 2016.

Holden wasn’t able to announce its own confirmed co-investment strategy but the car maker’s managing director, Mike Devereux, says parties are working towards an agreement.

“The discussions with the Minister and the Premier have been very positive and productive,” says Devereux. “We’re making good progress in developing a new co-investment plan to help secure a long-term future for Holden and the automotive and manufacturing industry more broadly.

“In the meetings Minister Carr and Premier Weatherill demonstrated the clear commitment of the Australian car industry and our strong mutual desire to retain the capabilities we have in design, engineering and manufacturing.

“Car makers are investing billions of dollars to develop future vehicles, so it’s critical for Australia to have consistent and competitive long-term policies that make this country an attractive place for General Motors and other companies to continue to invest.”

Holden is reported to be seeking about $200 million from the government to ensure production of next-generation models of the Cruze small car and Commodore large car currently assembled in GM Holden’s Elizabeth plant in Adelaide.

South Australian Premier Jay Weatherill admitted to ABC News radio after the meetings that closure of GM’s Australian operations was one of the options being considered by the world’s biggest car maker.

“It’s a possible scenario [closing Holden manufacturing] and of course we’re doing everything we can to resist that,” said the Premier.

“But the truth is that car making is a global industry, so the future for Holden in South Australia and importantly the components suppliers in South Australia will involve us making sure that we’ve got a secure place in that global industry.

Weatherill says the state and federal governments are not prepared to commit taxpayers’ money for just a short-term solution and is seeking a longer-term commitment from GM to Australian car manufacturing.

“I think [GM is] committed to working with us to securing Holden’s future in Australia, and in particular the Elizabeth plant, but it will be contingent upon us reaching an agreement,” Weatherill told ABC News radio.

“Part of that agreement will involve both the Commonwealth and state governments making a substantial co-investment in the future of the Elizabeth plant.

“We are prepared to make a co-investment to make sure that Holden stays here, but we don’t want it to be just a rescue package. We want it to be something that’s going to sustain [Holden] into the future.”

Minister Carr (pictured above) admits the Australian car industry is facing difficult times with the high Australian dollar and rapidly declining large-car market.

Sales of the Holden Commodore and especially the Ford Falcon have dropped alarmingly in recent years.

The Commodore’s 15-year run as Australia’s best-selling vehicle was ended in 2011 by the Mazda3 small car, while the Falcon plummeted by 36.5 per cent year on year to its worst sales result on record – to fewer than 19,000 units.

Holden and Ford have both received recent investments from the government through its $3.4 billion, 10-year Automotive Transformation Scheme that runs to 2020 – specifically the now-defunct Green Car Innovation Fund that saw the government provide $1 for every $3 invested by the local car makers in more efficient vehicles.

The GCIF contributed $42m towards Ford’s $232 investment in a four-cylinder Falcon variant due this April and a turbo diesel Territory launched in 2011.

Holden received $149m from the GCIF and $30m from the South Australian state government to put towards local production of the Cruze small car.

Australia’s other local car maker, Toyota, has also received money from the Fund, with $35m awarded in 2008 for the local production of the Hybrid Camry.

  • Crummydore

    Without going into all the reasons, the government can put is as much as they can to keep the car industry going as far as I am concerned.

    Things are not perfect right now, but long term there is still a good business case for Holden, Ford and Toyota to keep building cars here.

    Not having a car industry in Australia in not an option.

    • 440 R/T Charger

      Agree….what comes around goes around…money spend on green car funds can keep the high paid jobs within Australia…ATO sure can get their dollars back.

      • Crummydore

        Sarcasm duly noted…. the wheel keeps on turning.

  • that other guy

    Why not just follow the examples of every other Car Manufacturing country and place higher tarrifs or increased taxes on vehicles not maunfacutered in Australia? Seems to work well in free trade countries like Thailand and Malaysia

    • JEKYL & HYDE

      don’t stop with just cars either.mind you,its getting harder to tax everything with e-trading,ebay and such…

  • Pauly

    Since Holden has the ability to make the Cruze now, does that mean they could start making the Volt here?

    It’s the same under pinnings and would drive investment to have Aussie suppliers make parts for it.

    • Karl

      They probably could, but I doubt there will be enough volume sales-wise to justify it.

  • Ramjet

    The Government is allowed to waste billions on everything else like insulation schemes and school halls that dont get used so why do people get upset if they support a manufacturing industry that is critical to not only our economy but also our national security in times of war.

  • tsport100

    This is an old fashioned shake down of the Australian tax payer by the US Government (Largest share holder of General Motors) Why should Aust government hand-outs be given to a profitable foreign owned multinational company? 

    Sure, no-one wants to see Holden die, but if their business plan is just more of the same… (ie. a RWD large Commodore until 2020) they’re dead anyways! Holden got 10s of Millions in Green Car Funding from the Federal Government in exchange for …. Aluminium body panels and some plastic aero under-car panels…. It’s all BS! 

    Now the big boys at GM Detroit are saying… pay up or we’re leaving. It’s just a shake down.

    • Dave S

      Let’s Hope Holden can keep doing what they are good at – selling one of Australia’s number 1 cars. True times have changed, and that’s why we now have the Cruze built in Australia.

  • Russell

    GM is about to announce a yearly profit of around 6 billion dollars and Ford around 7 billion dollars. I think they are leading the government down the garden path and just delaying the inevitable conclusion that Australia will not be building cars here in the next 10 years or so.

  • Andrew

    Maybe Ford, Holden and the Fed Govmt can consolidate and start their own car company…. No different to what is happening now really…

  • james graham

    Re Falcon sales – people forget that since there’s no more wagon that the Territory cannibalises some falcon sales.  So really this can be misleading.

  • Zandit75

    What does Holden have up it’s sleeve that they require $200 Million from the Government, but Ford only needed $34 Million??

  • chook

    Bring back the tariffs from 20 years ago !!….Isnt it so obvious that without tariffs  people will often just take the cheap option !! . Many of them say they care about aussie industry but when it comes to spending time they will just turn the other way !! …..Shame on em , clearly they care about their own aussie job and thats about it . Another fitting term is selfishness . They likely dont give a damn either about other industries affected either……like agriculture which is under siege from lousy fruit and veg from china which has been fertilised in sewerage , and to those who term the local car industry as a dead industry then you may as well put many stressed sectors of industry in the same category .  The disadvantage the local car industry faces is australian pay rates which are reflected in the purchase prices of the local models , the same pay rates which we all recieve and what some of us run off with and send  to certain maunufacturers overseas paying lousy hourly rates . If it were that some of these foreign manufacturers were to be using forced child labour to build their imports for near nothing then it would create even more frenzy among some australian import customers !!  

    • Sydlocal

       Some good points chook however what if the “Australian assembled” option doesn’t fit in with what you require? ie, the farmer who wants a ute and it needs to be 4WD because of the terrain on his property etc. Is he/she still selfish if they buy this imported 4WD ute because they need to carry more than 500-600kg in the tray as well as tow a trailer etc up to 3 tonne or so? Going by your comment the farmer should compromise his potential to make money and buy the VE/Falcon ute and accept the fact that he will get bogged more often and have to make more trips to wherever it is he has to go burning even more fuel and eating into his bottom line. Also what happens if you are a city dweller and only want a small car? Not eveyone wants to lug around a large car like the Commodore that has a bigger footprint on the road than many SUVs. Sure there is the Cruze, but even then it may be too big for some peoples needs as they may require something smaller and more economical.
      Also don’t forget that even if you buy an imported car you are still supporting Australian families etc through the dealer/service network etc.

      • chook

        Yes Sydlocal , not everything we need is built here….and sometimes what someone needs for their own needs will be an import , but if years ago the local customer supported the locals more then we would still have models like vans , new versions of small cars built here from the original 5 manufacturers  based here before , the RTV falcon ute , etc . When someone buys a local then they are not only supporting the families of the service dealer network , but theyre supporting the entire production and component supply chain . I actually live on a farm and the old 4wd here remains unregistered and just for on farm use . When i go into town i take the locally built sedan and if i need to get something big i use the trailer , which can be quickly unhooked from the car and on to the 4wd here if need be .

    • Phil

      What difference does it make if you support Australian familys or foreign familys? We’re all human!

      Also if it jobs concern you so much, why not level some of your ire at the machines and robots which have been taking peoples jobs for decades and will continue to steal more jobs?

    • Gmh-bogan

      Good comments chook.Free trade and tarrifs are becoming a huge debate in the USA Presidential elections.Countrys like America and Australia are loosing in this new global economy.

  • chook

    The robots are used at all factories worldwide Phil , as we all know , and is still quite labour intensive . The robots create consistency between each unit that is produced , with higher production speed. I have no problems with technology being used for a better product , and people are in many cases  employed to oversee the robot doing its job . Yes Phil , jobs do concern me , as you suggest …..Im not on of those people who only thinks within their own little square and while they drive an import they cannot understand why their own job is at threat in another industry . I do favour assistance for the other industries in pain also……… , tourism , other manufacturing , primary production etc . Do you also term these other industries as dead industries because times are bad ?? ……Theres not much difference between products made overseas and foreign workers illegally working here in contravention of immigration laws , only that the foreign product is a way around the immigration work laws !! . Once again I say that some things we need to import , some vehicles also , after all other countries buy from us , but it has gone way too far .