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Holden CEO: no decision made on Australian future

Holden chairman and managing director Mike Devereux says no decision has been made on the future of the car maker's Australian manufacturing operations.


Speaking to the Federal Government's Productivity Commission in Melbourne, Devereux said there is no timeframe for a decision on whether Holden's operations would continue in Australia.

"This industry is an important part of the economy," Devereux told the commission.

"Hopefully through my testimony today I can continue to make that case."

The comments follow reports from late last week that Holden had decided to cease vehicle production in Australia from as early as 2016 and back up statements by Industry Minister Ian Macfarlane that the car maker had assured him a decision on its future had not yet been made.

Devereux did, however, say that Holden's withdrawal from Australia would have a disastrous effect on the economy, with the cost of losing automotive manufacturing dwarfing costs to keep it.

"The economic benefit of us making things is $33 billion to the Australian economy," Devereux said.

"That's 18 times the assistance we receive."

He also said every automotive industry job resulted in the creation of two to three others in the wider economy.

Citing costs of $3750 per car, or around $300 million extra per year, to manufacture cars in Australia, Devereux told the commission while Holden does not expect the Federal Government to "close that gap", a public-private partnership "over the long term" is needed to be competitive.

"I wouldn't speculate on what contribution will be needed ... because I can't tell you what future currency rates will be or what free trade agreements we will sign," he said.

"We've been fighting the fight, but I can't tell what the future will look like."

Devereux brought up the "build where we sell" philosophy of Holden's parent company General Motors, saying, "We have continued over the years to tell our parent that we want to continue to build things in this country."

"Is the cost of labour higher here than it is in Asia? Of course it is ... it's one of the challenges we have to overcome, but it's not the only driver of why things cost more to make here."

Last week Prime Minister Tony Abbott demanded Holden make its intentions clear about its local manufacturing future, saying, “I do wish Holden would clarify their intention because at the moment they have got everyone on tenterhooks.”

Shadow industry minister Kim Carr, who has previously said the death of Australia's automotive industry would slash $21.5 billion from the economy, last night told the ABC an additional government commitment of under $150 million a year would be enough to secure Holden‘s local manufacturing future until 2025.

Devereux ends his time as head of Holden at the end of this year, following a promotion within GM announced in October.

Set up to review the current state and future of automotive manufacturing in Australia, the Productivity Commission’s interim report is due to be released on Friday, December 20 with the final report to be submitted to the government by March 31, 2014.

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