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Canberra and Holden set to talk on

Rolling on: Industry minister Ian Macfarlane (left) and Holden chief Mike Devereux take the company bus to the assembly line for a tour ahead of the crucial funding talks.

Car industry aid decision no time soon as Productivity Commission re-affirmed

3 Oct 2013

HOLDEN appears set to accede to a federal government request to buy time to find a solution to car manufacturing funding issues that could decide the local future of the General Motors subsidiary and other Australian motor car-makers and the parts industry.

New federal industry minister Ian Macfarlane on Wednesday asked for patience from GM on its request for more government assistance to help it to fund a new generation of Cruze and Commodore vehicles to be built at the Australian plant beyond 2016.

Mr Macfarlane said the parties had only one shot to secure the Australian motoring industry, but cautioned that any assistance would also be the last taxpayer handout from the Abbott government which wanted to wean industry off such “hand-to-mouth” co-investment grants.

“That will be it, though, and I don’t know where the money’s going to come from,” he said.

“We are going to have a discussion in Cabinet, we are going to get the PC (Productivity Commission) report and it is going to take some time, and it will require everyone to co-operate.”

The minister met behind closed doors with GM Holden chairman and managing director Mike Devereux for almost two hours after touring the Holden plant yesterday.

Also in the meeting were South Australian premier Jay Weatherill, state manufacturing minister Tom Kenyon and GM Holden manufacturing executive director Richard Phillips.

The outcome of the talks remains under wraps, with an expectation that more talks will be held to progress the issue towards a solution.

Holden reportedly wanted a federal decision by Christmas, but Mr Macfarlane said yesterday that the government still wanted the Productivity Commission to look into the issue before making a final decision.

That process would almost certainly take more than a few months, meaning Holden and its Detroit parent can either wait for it or take a punt on the outcome.

GM Holden corporate affairs manager Sean Poppitt said Holden would continue to talk with the federal and state governments, and he played down reports of a Christmas deadline.

“We are not going to specify deadlines or specify anything,” he said.

Up to 40,000 jobs across Victoria and South Australia could hinge on the outcome of the negotiations that also involve the future of Australia’s biggest motor manufacturer, Toyota Australia, and the remnants of Ford Australia’s Victorian-based operations, as well as parts-makers.

Mr Macfarlane is set to visit both Toyota and Ford in Victoria on Wednesday, with further talks planned with executives of both companies.

Holden received a federal government pledge of $275 million towards its production plans for Australian-built cars out to 2022, but it has since gone back to Canberra for an undisclosed top-up, saying market conditions had changed dramatically.

Apart from Holden’s SA factory, also at stake is GM’s Port Melbourne V6 engine plant that not only supplies engines for the local Commodore range but also exports significant numbers of engines to sister companies overseas.

Mr Macfarlane said prime minister Tony Abbott was committed to a continuing manufacturing industry in Australia, saying Mr Abbott had called him before the Holden factory visit to make sure everything was on track.

However, Mr Macfarlane did not publicly reiterate the government’s pre-election commitment to cut motor industry assistance by $500 million – a policy apparently formulated by former industry spokesperson Sophie Mirabella.

He also was quiet on the government’s demand that Holden come up with a plan for significant export production increase before any further assistance would be forthcoming.

Holden’s manufacturing workforce has committed to a wage freeze to help the company stem losses, while hundreds of jobs have gone from both blue-collar and white-collar operations in Adelaide and Melbourne.

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