News - General News - Government
Committee to seek details of Elizabeth plan
Senators Carr and Xenophon to hear more about plans to save Elizabeth plant
10 Feb 2016
By IAN PORTER
SHADOW industry minister Kim Carr threw his support behind the ambitious the plan to save the General Motors Holden plants at Elizabeth and Fishermans Bend ahead of a Senate committee hearing in Canberra last week.
The plan, put forward by Belgian engineering entrepreneur Guido Dumarey, entails keeping both the South Australian assembly plant and the Melbourne engine plant in production after General Motors ceases manufacturing in 2017.
Mr Dumarey has visited Canberra several times for talks with various politicians, including industry minister Christopher Pyne, prime minister Malcom Turnbull, opposition leader Bill Shorten, former industry minister Senator Kim Carr and South Australian Senator Nick Xenophon.
All have given Mr Dumarey and Punch Corporation a letter of support, except the prime minister, who is believed to have committed to giving a letter of support.
Mr Dumarey has also spoken with representatives from both the Victorian and South Australian state governments and both these governments have also given letters of support.
The letters are expected to bolster Punch’s case as it negotiates with General Motors in Detroit and, possibly, with financiers.
Senator Carr told GoAuto the proposal is for Punch Corporation to take over the Zeta platform that underpins the VF Commodore, the Elizabeth assembly plant and the Fishermans Bend engine plant with a view to producing 75,000 cars a year.
If all goes well, Punch expects volumes to reach 130,000 in two years, with the bulk being exported.
The vehicles will be re-skinned and Punch wants to make sedans and utilities.
He envisaged a more thorough redesign within three years.
Senator Carr said the “very substantial change” in the value of the Australian dollar since 2013 meant that exports were now a viable option for Australian-made vehicles.
“The economics of it have changed,” he said.
Senator Carr said Mr Dumarey has indicated that the Punch project can be implemented if it is given access to the Automotive Transformation Scheme, without any extra assistance.
However, the second stage of the ATS, from 2017 to 2020, would need to be re-activated.
“That would require a change in government policy,” Senator Carr said.
He said Minister Pyne’s letter of support to Punch Corporation indicated that the Turnbull government had changed its policy towards the car industry since the departure of Tony Abbott as prime minister.
“I’m strongly supporting the project,” Senator Carr said, “as it is the best chance we have of saving thousands of jobs.
“It is probably the most advanced of the five separate projects that have come to me to talk about continued vehicle production in the country.
“It’s not a done deal, but I am pushing to have it taken seriously.”
Senator Carr said it would require GM to engage with the process.
GM has already dealt with Dumarey over a transmission plant in Europe that was slated to close in 2014. Mr Dumarey persuaded GM to sell the plant to Punch, and GM awarded a two-year contract for the supply of transmissions from Punch.
Subsequently, ZF awarded Punch a contract to make its eight-speed transmission and the plant is still in production. The ZF contract necessitated a refit that cost €250 million ($A400 million).
The proposal to keep Elizabeth operating would depend on the terms on which GM transferred the plants – Elizabeth and Fishermans Bend – to Punch.
It is believed GM would receive a licence fee for the use of its Zeta platform, in which it invested $1 billion about 10 years ago.
Senator Carr said Mr Dumarey wanted to keep the existing supply chain in operation because, if the local parts-makers close their factories, there would be no way the Elizabeth plant could continue.
This is why the Punch deal to take over Elizabeth and Fishermans Bend needs to be completed in the first half of 2016.
Senator Carr said Mr Dumarey believes there is demand around the world for an up-market rear wheel drive vehicle.
“He believes there is a niche market in which he can make money.”
Senator Carr said he thinks the proposal sounds viable and that Mr Dumarey is genuine in his attempt to take over the operations, not an opportunist.
“He is an engineer and a motoring enthusiast, but his feet are on the ground. I think he is the genuine article.”
The Road to Recovery podcast series
Click to share
General News articles
Research General News
Motor industry news