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Australian Government ‘taunted’ Holden into bailing out

on December 12 2013 | in Industry news, Latest news | by | with Comments Off

Here’s a sample of what Australia media are reporting on the end of Holden as a carmaker:-

A text by a Holden executive listening to debate in Canberra over the carmaker’s future said the Federal Government was “taunting” Holden.

It did the rounds of media as Acting Australian Prime Minister Warren Truss and Treasurer Joe Hockey were ripping the carmaker to shreds during parliamentary question time.

It was seen as a calculated performance – one designed to flush out GM’s intentions and back the carmaker into a corner.

Hockey said it was time for Holden to ”come clean” and be ”fair dinkum” over its future in Australia. ”Either you’re here or you’re not,” Hockey said.

Truss chimed in: ”They owe it to the workers of General Motors not to go into the Christmas period without making a clear commitment to manufacturing in this country.”

For Holden management, which had been in hushed discussions with the government for months, it was a clear signal that the federal cabinet had turned on the company and wanted a swift end.

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Richard Reilly, the chief executive of the Federation of Automotive Products Manufacturers, said Holden buys more than A$2 billion worth of parts every year.

He said about 32,000 people were employed in the car parts supply chain, many of whom would be able to retrain into other areas in the coming years, although some would be unable to be redeployed.

The focus now turns to Toyota, which at this stage will be the only carmaker remaining in Australia after 2017.

Reilly said while many of Toyota’s suppliers supplied just Toyota, he doubted whether the Japanese company could continue to achieve its economies of scale.

Toyota said in a statement: “We are saddened to learn of GM Holden’s decision. This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia.”

Australia’s A$21 billion automotive manufacturing sector employs 50,200 workers, according to the Bureau of Statistics.

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Holden boss Mike Devereux delivered the news personally to workers at the manufacturing plant in Adelaide, from the back of a truck with a microphone in hand. Many heard it over a loudspeaker. By all accounts, many jeered loudly.

But the decision was catharsis for some who had watched production at the Holden plant nearly halve over 10 years.

Elizabeth, the home of Holden in Adelaide, scores low on nearly every socio-economic indicator. Unemployment runs at 14 per cent and is about to go higher.

Cost cutting had got so bad the company put signs on the fridge telling employees the milk was for tea only. When workers took a toilet break, managers walked in.

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One business columnist celebrated the end of Holden.

“Good riddance to the great Australian con – that we needed a local car manufacturing industry,” she wrote, in part.

“GM is teaching Australia a very clear lesson: they are closing up shop because it is in their commercial interests.

“Our future lies in innovation – not propping up an industry that serves no purpose other than an antiquated sovereign status symbol.

“The loss of jobs on the shop floor is perhaps the only legitimate argument pertinent to this debate – but it is not even near sufficient to justify the billions in contrived handouts that have been gifted to the foreign based manufacturers.”

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