Minister see no future for Holden
Friday 1st November, 2013
Author: Mark Kenny

Holden will be gone from Australia in three or four years no matter what Canberra does to prop it up, senior ministers in the Abbott government now believe.

The bleak conclusion, which has not been stated publicly, is fuelling strong resistance inside the government to further taxpayer subsidies to the automotive industry.

Also fuelling ministerial anger is the assistance sought by Holden in current crisis talks, which according to one is "in excess of $200 million" per year from 2015, when the current car plan expires.

The minister said there was a recognition that too much good money had been spent after bad and that the end of the sector could not be forestalled forever.

A looming policy showdown between economic rationalists and those in favour of a new car assistance plan is shaping as the first major division in the Abbott cabinet, and the first real test of Prime Minister's economic policy instincts. It comes as the ALP dramatically stepped up the pressure on the government on Thursday to throw a lifeline to Holden.

Former industry minister Kim Carr urged the government not to wait for an interim Productivity Commission report due before Christmas. Declaring there wasn't a single car on the road tat had not been subsidised, he said Canberra needed to act within a fortnight or the General Motors board, meeting in Detroit, would vote to shift its operation to China. "It may well be that as soon as the December meeting, a decision is taken to actually wind down manufacturing facilities in the country," he said.

Economic minister are said to be increasingly cynical about Holden's intentions and are convinced the company's Detroit headquarters has resigned itself to pulling out of Australia, citing among other things, the imminent redeployment of Holden's chief executive Mike Devereux to China.

They suspect the amount being sought in exchange for few, if any, commitments - such as increased exports or minimum job numbers - suggests Detroit is virtually inviting Canberra to say no.

Toyota is also feeling the pinch of the high dollar, announcing it will require productivity improvements from its 2500 employees to reduce the cost of its cars by $2800 by 2018. "We need to take urgent action because we are now seeing gaps in our transformation plans," chief executive Max Yasuda said.

Tony Abbott brushed off claims of a split in Coalition ranks. "The government is absolutely at one in its commitment to give the car industry every chance of success. I want us to be a country with a car industry," he said.