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Holden quits: Parts makers reel from decision

Part of the problem: Parts-maker Palm Products says Holden's decision to pull-out of Australia will effect more than just the automotive industry.

Parts makers shocked, saddened by GM decision to cease manufacturing

11 Dec 2013

AUSTRALIA’S struggling car parts industry has expressed shock and disappointment at General Motors’ decision to quit car-making in Australia in late 2017.

Holden’s factory closures at Port Melbourne and Elisabeth will come a year after Ford shuts in manufacturing in Geelong and Broadmeadows.

It will continue the deindustrialisation of Australian manufacturing that started after the 2008 global credit crunch when the US and Japan, among others, devalued their currencies to keep their industrial bases competitive.

Former Toyota Australia chief executive and chairman John Conomos said he preferred to leave the official Toyota reaction to others.

However, he told GoAuto he was “very, very disappointed” that GM was pulling out of car-making in Australia.

The owner of the small Tier Two parts manufacturer Palm Products, Robert Wilson, summed up the situation when he described it as “a black day for the manufacturing industry of this country”.

About 40 per cent of Palm’s turnover comes from making polycarbonate windows that cover vehicle instrument panels. The company has recently translated the high quality and low cost standards driven by the car industry into a range of drinkware and is now the country’s largest supplier of plastic tumblers and stemware.

Mr Wilson said the effect of the decision would be felt much wider than just in the automotive sector.

“I’ve always seen this industry as a means of transferring the latest skills from the parts manufacturers and the car companies to people like myself and then into the wider community,” he said.

“That’s he benefit that we will now lose.

“It is going to make manufacturing more difficult and narrower based. Not a good day.”

The Federal Chamber of Automotive Industries, the peak body for manufacturers and importers, added to the sombre mood that followed the GM announcement.

FCAI chief executive Tony Weber said the chamber was saddened by the news.

“Our thoughts are with the workers and their families at this difficult time..”

Mr Weber said.

For its official reaction, Toyota put out an unattributed press release.

“We are saddened to learn of GM Holden's decision,” the statement said.

“This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia.

“We will now work with our suppliers, key stakeholders and the government to determine our next steps and whether we can continue operating as the sole vehicle manufacturer in Australia.

“We will continue with our transformation journey as planned.”

Like Holden, Toyota is talking with unions as it attempts to reduce the cost of building cars in Australia. Workers are expected to vote on a new wage deal on Thursday.

Last week, Toyotaexecutive director of corporate services Mike Rausa told the Productivity Commission’s inquiry into automotive manufacturing that the company had launched a campaign designed to reduce the $3800 gap between Australian and overseas Camry production costs.

He said the result of the effort would have a bearing on the future of manufacturing at Altona as it would be one of the main inputs as to whether the Australian plant would get to make the next-generation Camry.

A decision is expected in 2014.

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