Holden confirms it will leave Australia in 2017
GM Holden will cease producing cars in Australia from 2017, putting 2,900 employees out of work and Australia’s remaining car and components industry and its 45,000 workers in immediate danger.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” GM Holden’s chairman, Dan Akerson, said.
In a statement from Detroit, Holden said “approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant [in South Australia] and approximately 1,300 from Holden’s Victorian workforce.
Toyota’s response to Holden’s announcement exacerbated fears that the decision could have a knock-on effect. “This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia,” the company said. “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.”
Holden’s chief executive in Australia, Mike Devereux, said: “This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia.
“We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.”
The Abbott government had attacked Holden for failing to immediately clarify its long-term intentions in Australia, even though the industry minister, Ian Macfarlane, had commissioned the Productivity Commission to report by next March on what ongoing subsidies should be provided to car makers – something Holden said it needed to know before committing to produce another model in Australia.
“We regret the fact that General Motors will phase down its operations … Holden has been an iconic national brand and part of our heritage. many of us have had the pleasure of travelling and owning Australian-built Holdens and it is a pity that will not continue,” the acting prime minister, Warren Truss, told parliament as he broke the news shortly after the beginning of question time.
The treasurer, Joe Hockey, said the government would work with the state governments, the unions and the company to ensure the closure “does not lead to a significant downturn in South Australia and Victoria”.
The company received $1.8bn in government assistance between 2001 and 2012, but said that generated $32.7 billion in economic activity.
Mitsubishi pulled out of Australia in 2008 and Ford will end production in 2016.
Hockey said the fact that Mitsubishi and Ford announced they were pulling out of Australia during Labor’s term in office proved government funding was not “the issue” and the assistant minister for employment, Luke Hartsuyker, said immediate job-seeking support would be provided to workers who lost their jobs.
Macfarlane, who had previously argued for ongoing support for the car industry, said Labor governments had “laid the foundations” for the car industry’s failure.
But Labor’s industry spokesman, Kim Carr, said in a tweet: The Abbott government has succeeded in forcing Holden out of Australia. Workers have been sacrificed for reckless Coalition policy.
Both Hockey and the education minister, Christopher Pyne, said labour costs were a significant factor in the Australian car industry’s lack of competitiveness, blaming the unionised workforce.
In its statement, Holden said it would still have a national sales company, a parts distribution centre and a design studio in Australia after 2017, and that sales and service of Holden cars would be unaffected.
It said the high Australian dollar was a major factor it its decision, pointing out that at its peak, the level of the dollar meant Australian manufacturing was 65% more expensive compared with a decade earlier.
Speaking to journalists about the decision, Devereux said: “There is no question this is a difficult day not just for Holden but for the country … we have been part of the industrialisation of this country.”
But he said the company had determined on Tuesday afternoon, shortly after he had reassured the Productivity Commission that no decision had been made, that “building cars in this country is just not sustainable”.
He refused to answer questions about what level of government assistance could have convinced the company to stay, saying only “we understand the point of view of the government of the day”.
“Make no mistake we have looked at every possible option to build our next generation cars here in this country … no matter which way we applied the numbers our long-term business case … was simply not viable,” he said.
But the national secretary of the Australian Manufacturing Workers’ Union vehicle division, Dave Smith, said the government could easily have prevented the closure by continuing the deal Labor had struck with Holden before the election.
“They could have stopped this, absolutely they could have stopped this. they just decided they weren’t interested in these jobs. They should apologise and they should hang their heads in shame,” he said.
Smith said Toyota had told him the Holden decision would mean its operation would become unviable.
Labor acting leader, Tanya Plibersek, said the government had “goaded and dared Holden to pull out” and had now “got its way”. She said the decision, which could easily have been avoided, could cost 200,000 jobs when workers who depended on the car industry were taken into account.
The South Australian premier, Jay Weatherill, said it was a “black day for South Australia” and accused the Abbott government of “turning its back on the industry and the people in it”.
The Victorian premier, Denis Napthine, said he had been advised it was an “irrevocable decision” and that it was a “very, very sad day for Australia and Victoria”.