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South Australian Premier Jay Weatherill has hinted Holden could receive additional government funding to help shore up its local manufacturing future.

Weatherill told News Limited he was prepared to go to great lengths to save Holden, though insisted the South Australian manufacturer would have to present a compelling business case and would not simply be handed money blindly.

“Of course, it’s not a blank cheque, but we’re prepared to do the appropriate things to make sure there’s a long-term sustainable future for Holden in South Australia,” Weatherill said.

News Limited last week reported Holden was chasing an extra $265 million in taxpayer money in addition to the $275 million already promised by the federal, South Australian and Victorian governments to continue building cars in Australia.

A source close to CarAdvice confirmed the changing economy had forced Holden to reassess its business plan and renegotiate with the government for an expansion of its co-investment deal.

holden-production-1

Weatherill confirmed over the weekend that Holden has not yet put forward an official request for additional funding to his government.

Executives from Holden parent company General Motors will reportedly meet in September to discuss the future of its Australian manufacturing operations.

The premier said he was prepared to meet with GM executives in Detroit before then in a further show of support for the manufacturer and the local industry.

“I’ll do whatever is necessary to make sure that we get the right arrangements for Holden,” he said. “I think that this is going to be dealt with in the near term.

“There’s [also] some very important discussions to happen at a national level [that] we’ve been involved in.”


  • rickdingo

    Close them down. They dont deserve any more money.Why did they get double the Ford got?

    • Karl Sass

      Based on how much subsidies their competition overseas receive, they do deserve more. They got more than Ford because they spent more on development than Ford and produce more cars.

    • XR6Turbo17

      I agree with you Rick your spot on, Holden import most of their parts , where Ford has the most Local Content.Ford should have got the same amount of money or even more due to they use more local content which brings more jobs.

      • Daniel D

        Ford didn’t apply for government co-investment in the last round of funding, for what are now obvious reasons. They had already planned to close down.

      • Zaccy16

        i agree, holden deserve more funding but ford deserved it more because the falcon was a all aussie car when the new VF has a big global influence

    • MD

      I would love to see Ford Oz continue with the Falcon but most agree that Ford OZ has been set up by their global parents or it could be that they are just plain hopeless – they’re not interested in marketing the EcoBoost but maybe not a bad idea perhaps after the ‘walking fingers’ ad that introduced the FG. Now we have their imported product being advertised by ditzy females who buy on the basis of a shoe compartment or “i’ll have that one” as if she was buying herself a dress. Advertising works well to sell a product but Ford don’t seem to understand that.

    • JoeR_AUS

      see my reply to gkm22

    • guest

      They should get more investment based on the sort of overseas funding other manufacturers get.

      What could also happen is that free trade is made more equal for everyone. Make it as free as the free trade our partners do with us. So if they set tricks and traps, we should do the same too.

  • delcotexas

    Hello they refer to quote
    “A source close to CarAdvice confirmed the changing economy had forced Holden to reassess its business plan and renegotiate with the government for an expansion of its co-investment deal.”
    Its (not) changed radically overnight , I do not think so , we see it all the ups and downs as we have interests in a business turning over small $100mill p/a we fight on the ground against Asian imports , what it will do is we will start to source components of shore as long as poss to retain staff, we have no one to cry too for help we have almost run our race ………….
    according to the R.B.A. not a lot has changed with our economy and the federal Govt is very happy with the economy …….so explain what has changed or was this part of the sneak up on them plan………….its simple mathematics ……….they need too sell more local production !!……..e.g. oh what a feeling Camry 70,000 + later
    Everyone cast your minds back to the ORBITAL ENGINE CO left Australia and are doing well ??

    • JoeR_AUS

      In Holden case the sales volume has dropped a lot recently and more for Falcon.

      The RBA only controls interest rates and looks at GDP, it does not control population increase which drives our GDP or industries that are going under. The government is happy because the numbers look good but turns a blind eye to people in industries without growth (CPI) and redundancies that do not appear on the unemployed numbers.

  • gkm22

    I agree, close them down and spend the $540mil on staff to find new jobs.

    • Karl Sass

      That money would be swallowed by lost revenue if the industry folds.

    • JoeR_AUS

      You closed down Holden local production, then Toyota would fold and all the manufacturers that support the local Automotive industry, 250,000 people and 23 billion dollars in activity. Around 10% of Australia GDP, without it we would enter a recession, and to find new jobs to make 10% GDP could take up to 10 years

      • bb

        you’re being alarmist, the figures you quote are for the whole aussie car industry, not just cars manufactured in australia. locally made cars make up a smaller and smaller proportion of the australian car industry.

      • gkm22

        Where do you get your figures from, there is not 250000 people directly or indirectly that would lose there jobs if holden stopped making cars in Australia. Holden will still continue to sell cars here as will Ford and Toyota. If you are going to use industry figures break them down to the topic at hand. Don’t use them as a general figure as it is not the car industry leaving Australia.

        • JoeR_AUS

          Manufacturing is different to selling. What your saying if Holden becomes eg like Mazda, they will only have dealers (most are privately owned) and the engineering/design staff left. Toyota has come out and said without Holden the manufacturers who support the car makers will not be sustainable. This has been estimated to be 250,000 people all up, the total manufacturing industry employees 1.1 million people in Australia.

  • John

    I wish they would stop using the term co-investment. Its only a joint venture when Holden is leaking money. We look like fools.

  • Dave W

    It’s simply delaying the inevitable.

    Doesn’t matter what the govt does, as long as Holden’s making cars that people don’t want to buy, it’s not sustainable in the long term.

    You can’t say we should buy them because they’re Australian either. Us buyers should be able to say we bought it because we want to buy it, because it’s genuinely desirable.

    • matt

      when will this get trough peoples heads, we just don’t have the sales figures to support an indigenous car, even if holden was the maker and seller of lets say the mazda 3, that 4000 or so a month still does not compare to the mid 90′s when holden sold 5000+ commodores a month, its not a case of “making cars people want to buy” that’s just a stoopid, stoopid comment.
      We simply don’t have the capacity to buy a car model In that volume anymore. No wonder fords out of here, 1000 or so falcons a month is nothing, they sold 68,000 F-150′s in America alone last month.
      Holden and Toyota factorys here are only geared to make around 100,000 cars a year, no where near enough for long term sustainability, Toyota and holden need to let us design 3 or 4 cars off the camry/commodore platform each, then let us try and export them as top end models, the world over. The government needs to be firm and tell them both, we want you here, but you need to design and export at least 150,000 cars a year each, no more games. (requiring factory upgrades for both to build at least 200,000 cars a year each)

      • Dave W

        If Holden can make the Cruze more desirable and reliable, I don’t see why they can’t steal customers from BOTH Corolla and Mazda 3.

        How naive are you to talk about expanding production and designing new cars when their current Aussie cars aren’t even selling well. If the govt put their foot down and tell them that, they’ll just say “screw you, we’re going to Thailand.”.

        We don’t have the leverage to make any demands. That’s why they’re squeezing the govt for more money now. Holden only said that cars cost $3000 more to make in Australia, they
        never said they’re losing money on each car sold.

        See this is what happens when we rely too much on foreign companies in Australia. Now we’re stuck between a rock and a hard place.

  • Shak

    For all the folks who want to shut down Holden, remember Toyota would need to close up shop as well as they are simply not big enough to support the supplier base on their own. Also if the auto manufacturing sector disappears, we wold lose billions of dollars in tax revenue. Where do you think all that extra tax is going to come from? Clue: Your hip pockets. So if you want to campaign for the closure of Holden, get ready for the government to dig much deeper into YOUR pockets.

    • Tony Abbotts No1 Fan

      You know, I agree with what you’re saying, but at what stage does a Government draw a line in the sand, if the manufacturer & it’s parent can’t or won’t allow the manufacturer to produce a car/s that can be sold around the world in volume & not rely on domestic sales & effectively token export sales to achieve income.

      • Shak

        It’s one of those situations where both sides seem to want the same outcome, that is to keep Aussie manufacturing. They are just not in position to gamble. Our governments can not take the chance of calling Holden’s bluff on the off chance that they actually DO leave. Like i said previously, we need GM and Toyota, they do not need us. If we dont help them out somehow, whether through co-investment, tax breaks, increased tariffs or help with exporting they can very easily shut up shop and become full line importers.

        I agree with you that we have to draw a line somewhere, but at the same time you cant very well tell to stand on their own now of all times. With the dollar where it is, the uncertainty of our government and basically no viable exports, we need to keep them here as long as we can so that we can make them viable in the future. Telling Holden to go at it on their own now, is basically signing their death warrant in Australia.

        • Sheldon

          The industry is already a vegetable. Does not hae a brain wave. Even its family has stopped visiting the ICU. :(

          • JoeR_AUS

            that vegetable contributes almost 10% of GDP, to big to let go!

          • Lehmann Brother

            Too big to fail. Hmmmm….where did i hear THAT before???…..

          • LC

            That’s not what he said in the slightest.

          • JoeR_AUS

            Glad you mentioned that, most probable the single collapse that precipitated the GFC and that did not cause grief did it?

      • Daniel D

        The parties on both political sides could start by acknowledging that free trade agreements don’t work if they aren’t enforced. Holden’s CEO has spoken a number of times to the unbalanced trade agreements to a collective blank stare from the government. Not once has the coalition said they will fix it either and given past track record they won’t.

        Its all good to point the finger at Holden and Toyota, but a lot of the mess they are dealing with was created by the Commonwealths completely naive belief that other countries wont develop tax laws to get around free trade agreements and protect local interests, manipulate their currencies or outright subsidise business to assist their industries international competitiveness. Most do all three.

        Australia is the only country who thinks the world is flat and manufacturing doesn’t need support. Kind of explains why the only industries we have any success with is growing the public service, the army of barista’s to make us coffee and digging holes to sell non renewable resources cheap to other countries so they can sell it back to us as finished goods. Something which, when we have left nothing but big holes where Australia’s natural wealth use to be, and destroyed our industry so we have not the skills to do anything else, our great grand kids will surely love us for.

        • JoeR_AUS

          The press only reports the next statement and then we discuss, the debate needs to move on to how we re-engineer our manufacturing to suit a world market.

  • marc

    There goes another group of schools/hospitals/civil projects that also employs 1000s of people.

    • Brayden Cresswell

      And if Holden goes under 250000 people loose there jobs.

      • Doc

        GM is asking $265m plus the $275m. Just give it straight to the 250,000 Aussies who will lose their jobs. At least, THEIR taxes will directly benefit them… And not be converted to profit to be sent Back to detroit… Or be turned into a $25M golden handshake for the CEO.

        • Brayden Cresswell

          I agree would be better if they don’t give the money to Holden have this as a back up for the workers .

          • Chairman

            $2,160 per person isn’t going to go very far if you’re unemployed..

        • LC

          $265,000,000 + $275,000,000 = $540,000,000

          $540,000,000 / 250,000 = $2,160 per employee

          I’m not going to assume that’s going to be a one-off payment, because that’ll barely last them a month. Assuming it’ll be paid once a month (like a wage):

          $2,160 x 12 x 250,000 = $6.48 Billion in monthly payments for ex-auto workers per year.
          And that’s before taking into consideration the consequences for our economy if we were to suddenly lose the 10% of our GDP that’s bought in by our automakers.
          This is a cost you WILL feel, in the form of increased taxes, reduced services, or both.

          Yeah, it’s cheaper to keep Holden. And at the cost of a ONE-OFF payment of $23.35 per taxpayer, it’s a dirt cheap way to keep us in a good economic position.

          • Doc

            I see your point. But this ASSUMING Holden keeps its promise to REMAIN in business and not run with our money, like Ford is about to do. There should be TIGHTER STRINGS attached to any subsidies. Otherwise, i see Ford and Holden topbrass giving themselves $10M bonuses and saying, “so long, gay boys” (like that character in The Hangover).

          • LC

            Ford actually didn’t apply for the last round of funds. Everyone thought that was strange at the time, but now we know why.

            The “strings attached” point I agree with. I’d say that the government should hand out the funding on the condition that all the IP and copyright titles, plus the deeds and rights to the factories, local engineering facilities and talent, are left with the Australian government. That way, if they do a Ford, we can keep going at it alone.

            However, if they say “no”, then what? We’re hardly in a position to bargain here, and the carmakers and the government both know it. We need GM and Toyota, they don’t need us. They could close down/offshore tomorrow and they won’t feel any financial pain for it. So we can’t risk calling their bluff.

      • sf

        people in the car industry have had a fair amount of time to get out. the writing has been on the walls for a long time.

      • gkm22

        Where do you get your figures from, there is not 250000 people directly or indirectly that would lose there jobs if holden stopped making cars in Australia. Holden will still continue to sell cars here as will Ford and Toyota.

  • Doc

    I am sorry to sound insensitive to car industry people here. But this has become a money pit. Dumping millions more into an ailing business model is likig repairing a total wreck. It will cost u less if u just push the junk in a ravine and cu your losses. The Aussie car industry has died a long time ago. It is just on artificial respirator, morphine, pressors, parenteral nutrition, colostomy bag, etc….

    It is sicker than Mandela. Stop the heroic measures and his suffering. Just pull the plug already and let it go in peace. The sooner we mourn, the sooner we heal.

    Life is a b!7@h, and then you die.

    • JoeR_AUS

      your are a bit naive

      You should read the Australian Trade & Assistance Review 2011-12

      Every industry gets some form of assistance: eg

      Budgetary assistance by industry grouping 2012

      Motor vehicle and parts 620m
      Financial and insurance services 914m

      Tax concessions by Industry Groups

      Motor vehicle and parts 40m
      Financial and insurance services 845m

      • Doc

        If dropping more money into the industry is such a wonderful idea, why did Mitsubishi close, Ford closing, and Holden and Toyota cutting people?

        Should we also subsidise OTHER industries that are offshoring (ie, call centers, accounting, canning, paper making, farming,…) just to keep Aussie jobs?

        Businesses will always find CHEAPER ways to manufacture. America did it in the 70s and 80s with sweatshops manned by illegals UNTIL EPA, unions, etc shut them down. Companies moved overseas, workers lost jobs and the govt missed out on taxes.

        But high wages is just drivig production costs sky-high and investors are in business to MAKE MONEY, not to CREATE JOBS. Thats just the plain and painful truth.

        Yes, America subsidises Detroit but look what it did. American cars went from BEST to close to crappiest. Jobs were saved but quality nosedived, the world stopped buying American, and they went from richest to biggest borrower nation.

        Politicians will keep subsidies because they want to remain in power. But driving the country deeper and deeper in debt will eventually hurt not only people in the car industry but the entire nation as well when the economy tanks, like what happened to America.

        Feeding a dead business is like paying a credit card debt with another credit card. You THINK you are coping bt you are SINKING deeper and deeper.

        • JoeR_AUS

          You should research the But ton plan, it was designed to rationalize our local industry and it was based on volume ie low volume payers would leave, Nissan, Mitsubishi. If you read the Australian Trade & Assistance Review you will find every industry gets some sort of assistance.

          In the end we have 10million people working and to maintain life styles we need them to continue to do so. If we lose the manufacturing, around 250,000 people, everyone will have to bear the cost.

    • LC

      It would cost a lot more to lose it than keep it. Governments have determined it to be the most cost effective approach, and that’s why they pay.

      And also, be happy that you pay for the equivalent of one Holden badge on one Holden car, that’s it. If you lived in the Germany you’ll be paying 5 times more to subsidize their industry, 10 times more if you lived in the US, and 15 in Japan, plus a 40% tariff on a new car if don’t buy Japanese.

  • tony

    Gm has already commited to global platrofms. So the future models to be built in australia will have substantial export potential. Holden exports are already starting to ramp up and with the recent drop in the dollar, the american launch of chevy ss will be an even bigger hit. Manufacturing is viable in australia. You just need strong government with long term policy. Yes the industry needs to be subsidized. This money isnt just going down the drain. Its filtering back into the economy. Dont forget the quater of a billion bollars already promised is over a 10 yr period . Thats not alot of money per year. Gm will contribute 3 to 1 for the government money. Again this money filters into the econmy. And the flow on effects are even greater. Stop being so short sighted people. If your so worried about money perhaps you need to do some reasearch on real govenment waste.. there is plenty to choose from with the current government. So stop picking at one of the few good investments that they have actually made. Lets nurture the Industry and hopefully help it grow.

    • Doc

      GM needs to educae Americans that the SS is Aussie-made, NOT from Detroit – and therefore far superior to Impalas, etc…

      The Monaro suffered as the GTO because of Pontiac’s bad reputation. Need to distance the Holdens from the Detroit Chubbies, i mean Chevys. My apologies.

  • gtrxuone

    If the SA Premier decides to give Holden more money to stay in SA.Its an issue for the South Aussies to debate.If the free traders arnt from that part of the country there opinion doesn’t really matter.

  • cv

    Does anyone know what is happening to fords plant and equipment when they close? couldn’t the govt buy this very cheaply as I doubt ford will ship it back to the USA. then the govt could start another local car industry and have total control over it. this would protect jobs etc etc

    • JoeR_AUS

      A empty factory with no IP, is only worth land value.

      A local industry would require to build or attempt to build every component here. So you would have to design/engineer/test it first and then deign a platform to build a car. This would be a tall order and require billions up front.

      It might be easier to get another manufacturer to come to Australia but this is the problem, which was the same problem in the USA. That we need to start with wages and awards from scratch, follow best practice and scale the volume to build millions of car a year. Korea has done it but it did not happen overnight as they started in the 70′s.

      • Doc

        As soon as the Third World, with its low wages, started to industrialise, that was the beginning of the end for manufacturing in the First World. It cannot be reversed. Once Asia itself become First World,it too will lose manufacturing to poorer countries in Latin America and Africa. It is inevitable.

  • Nikolas

    The withdrawal of foriegn owned industy to be established for peanuts in China was inevitable as this is how the banksters operate. They have been milking the Australian public since 1953 when PM Menzies gave them a tax free advantage over aussie businesses with the Double taxation Act. this act was the deathnell of Australian owned businesses who still had to pay taxes while the foreigners paid next to nothing. Today we are suffering for this and our criminal politicians are still hading out our money to bribe them further.