Acting PM demands answers from Holden

ANOTHER fiery question time in Canberra this afternoon has resulted in acting prime minister Warren Truss writing a letter demanding that GM Holden declare its investment intentions “immediately”.

The letter came only hours after GM Holden chairman and managing director Mike Devereux told the Productivity Commission that General Motors had not yet made a decision on whether to progress with a planned $1 billion investment in two new models to be made at its Elizabeth assembly plant in South Australia from 2016.

An industry source close to Holden has told GoAuto that the letter is being seen as a further gathering of the clouds around the federal government’s intentions towards the car industry.

The source said the apparently extraordinary decision to make the letter public – it was circulated on a press release distribution site – was actually done to ensure it got into the media, in a bid to discredit the company and the industry.

In the letter, Mr Truss claims that the federal government wants the automotive industry to thrive and flourish.

He lists the budget allocations made available to the industry in recent years and cites the Abbott government’s decision to reverse the Rudd government’s decision to tighten the fringe benefits tax regulations as evidence of its support.

Mr Truss also points out that in 2011 General Motors said that it had achieved “sustained profitability in Australia”, although this is believed to include the company’s importing business as well as it local manufacturing.

“Yet since last week there have been successive reports that General Motors has made a decision to end its Australian operation but has postponed an announcement until next year,” Mr Truss wrote.

He noted Mr Devereux’s statement to the Productivity Commission earlier today, but accused him of “failing to provide a commitment that Holden will remain in Australia well into the future”.

The letter says this creates uncertainty for Holden’s workers, their families and the supply chain.

“It is the Australian government’s view that GM Holden must immediately provide a clear explanation of its future intentions and explain what its plans are for its Australian manufacturing operations,” Mr Truss wrote.

“An immediate clarification of GM Holden’s future plans is needed to end the uncertainty for Holden’s workforce, its suppliers and the people of Australia.”

Holden has regularly said it will not commit to the $1 billion plan until the future assistance arrangements are made public and deemed suitable.

A Holden source told GoAuto this afternoon that the company was not likely to make a formal response to the letter.

Industry minister Ian Macfarlane is being described by the Canberra press gallery as the lone voice at the federal government’s cabinet table in support of providing more taxpayer assistance to the Australian car industry.