Holden to exit Aust in 2017Car maker Holden has confirmed it will stop manufacturing in Australia in 2017.
Holden released a statement saying approximately 2,900 jobs will be affected over the next four years, including 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden's Victorian workforce.
Acting prime minister Warren Truss told parliament local boss Mike Devereux was addressing employees as question time continued.
"This is a difficult day for Australians," Mr Truss said.
Victorian premier Denis Napthine also said the state government has been advised that Holden is discontinuing in 2017, and it's an "irreversible decision".
The group said it will transition to a national sales company in Australia and New Zealand as it discontinues vehicle and engine manufacturing and significantly reduces its engineering operations.
Parent company General Motors chairman and chief executive officer Dan Akerson said the decision "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".
After 2017, Holden will still have a national parts distribution centre and a global design studio in Australia.
Australian chairman Mike Devereux said the priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.
"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia," Mr Devereux said in the statement.
Mr Devereux said GM was committed to working with unions and local communities, along with the federal and state governments to support its people.
He said the sale and service of Holden vehicles would not be affected, and GM remained committed to the automotive industry in Australia and New Zealand.
"We recognise the need for change and understand the government point of view," he said.
"Moving forward our business model will change significantly however. GM Holden will remain an integral of its communities and an important employer."
Holden said its warranty terms and spare parts availability will remain unchanged.
GM said it expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013, including impairment charges for property, plant, equipment and employee severance related costs.
It expects additional charges through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the union.
Treasurer Joe Hockey told question time the government will work closely with the South Australian government and opposition, unions and stakeholders to ensure Holden's closure does not lead to a significant economic downturn in South Australia and Victoria.
Mr Truss noted in question time on Holden's decision that wages and costs in Australia are much higher than in other parts of the world.
The company has been considering its future after 65 years of making cars, as it faces a high Australian dollar and other cost pressures.
Hockey talks down impact
Earlier, Mr Hockey talked down the broader impact on the economy if Holden stops making cars in Australia.
Labor, the Greens, unions and the automotive sector have argued if Holden pulls out it would have a flow-on effect for hundreds of thousands of related jobs.
Holden says it generated $32.7 billion in economic activity in Australia from 2001 to 2012, having received $1.8 billion in assistance over the same period.
"The numbers involved in employment are greatly exaggerated when it comes to the motor vehicle industry," Mr Hockey told Fairfax Radio.
Mitsubishi had pulled out in 2008 and Ford planned to go in 2016, but "the world has not come to an end", the treasurer said.
Half of the parts used by Holden were imported.
Mr Hockey said it was "incredibly frustrating" that Holden had refused to confirm its future plans.
Acting prime minister Warren Truss on Tuesday wrote to Holden boss Mike Devereux urgently seeking clarification of the company's future.
Toyota workers will vote on a new workplace agreement on Friday, which the company says is crucial to it boosting productivity and getting costs down.
Unions say the agreement must come with a new commitment from Toyota that it is in Australia for the long-term and guaranteed support from the federal government.
Mr Hockey said the car industry workforce needed to be more "flexible".
Asked what sorts of things should be done, Mr Hockey said: "You can have different work shifts, you can get rid of union picnic days and various other things."
"They want to be more competitive but everyone needs to work together to make that happen, including the unions."
The government says it is awaiting for a report from the Productivity Commission into the car industry, due in March 2014, before making any new policy decision.
Labor frontbencher Tony Burke said this contradicted Mr Hockey's call for Holden to immediately come clean on its future.
"It's no wonder that big companies are saying how on earth do you deal with a government that keeps changing the goal posts, that's ripped $500 million out of support for the car industry and is changing the rules day by day," he said.
Opposition industry spokesman Kim Carr, who helped negotiate a post-2020 assistance package for Holden before the September election, said the industry's future could be secured for "considerably less" than $150 million a year.
Mr Hockey said the government had put $1.4 billion "for future years" on the table for Holden and Toyota.
Read more:
http://www.businessspectator.com.au/news/2013/12/11/politics/holden-exit-aust-2017