Coalition asks for time on car industry funding
Industry Minister Ian Macfarlane on Wednesday called on General Motors to delay a $1 billion co-investment in its Australian manufacturing operations while the Coalition awaits findings from an impending Productivity Commission review of the sector.
Flanked by Holden managing director Mike Devereux at a news conference in Adelaide, Mr Macfarlane reaffirmed his intention to save Holden and Toyota from leaving Australia, indicating the government would provide a short-term injection of funds to help car makers through the next three years.
Federal and state government help beyond 2016 remains clouded, but Mr Macfarlane said his intentions were to make the industry more independent and globally competitive.
"Time is running out ... but the reality is we're going to get this right, we're going to give this everything and I'm going to ask General Motors in Detroit to be a little bit patient," Mr Macfarlane said.
"I know they've got deadlines, I'm doing my best. These guys are all promising me we'll have a frank discussion behind closed doors - there'll be no leaks, there'll be no politics.
"I've got to have a Productivity Commission report before I hand down the final decision. I will try and do something in the short term just to keep everything going. The long-term plan is to have an auto industry here for a long time."
Before the election, the Coalition vowed to slash $500 million in car industry funding, casting doubt over whether manufacturers would survive.
Holden has previously stated that it wants clarification on future policy settings before year's end, to undertake work at its manufacturing plant at Elizabeth in Adelaide.
On Wednesday, Mr Devereux dodged questions on whether the deadline could be moved or if General Motors executives were willing to wait until next year, when the Productivity Commission report is likely to be handed down.
Asked whether GM executives in Detroit had relaxed the deadline, he said: "The discussions with government begin today and those discussions are likely to be ongoing for some time."
Mr Macfarlane said the government would stand by its decision to cut funding from the industry, but was working towards making Holden and Toyota more internationally competitive.
He also left the door open to fresh discussions with Ford, which announced in May that it was abandoning its car-making operations in Australia.
"I'm going to Ford and Toyota next Wednesday and I'm going to see what we can do over there."
Ford Australia's public affairs executive, Sinead Phipps, said there were "no plans to reverse our decision".
"We have plans to maintain a presence in Australia with a significant R&D facility, but not manufacturing. We have made that decision."
Frequently Asked Questions about this Article…
The federal government pledged a “no‑nonsense” final stand to save the Australian car industry, saying it will provide a short‑term injection of funds to help car makers through the next three years but acknowledged it cannot yet make a quick decision on long‑term funding beyond 2016.
Mr Macfarlane asked General Motors to be patient and delay a proposed $1 billion co‑investment while the government awaits findings from an impending Productivity Commission review, which he says he needs before handing down any final long‑term funding decisions.
The Productivity Commission review is central to the government’s process: Industry Minister Macfarlane said he needs the Commission’s report before making a final decision on long‑term support, and the report is likely to be handed down next year, shaping future funding and policy.
The government committed to a short‑term funding injection to support car makers over the next three years. Before the election, the Coalition had pledged to cut $500 million in car industry funding, a proposed reduction that has cast doubt over manufacturers’ longer‑term viability.
Holden has said it wants clarification on future policy settings before the end of the year to undertake work at its Elizabeth manufacturing plant. At a press conference, Holden managing director Mike Devereux declined to confirm whether deadlines could be moved while discussions with government continue.
Ford announced in May that it is abandoning car‑making operations in Australia. Ford Australia’s public affairs executive, Sinead Phipps, said there are no plans to reverse that decision; Ford will maintain a presence in Australia with a significant R&D facility but not manufacturing.
Investors should note that the sector faces material policy and funding uncertainty: the government has promised short‑term support but long‑term help is unclear until the Productivity Commission report. That uncertainty could affect manufacturers like Holden (GM), Toyota and Ford, so watch official government updates and company announcements closely.
There’s no immediate final decision: Minister Macfarlane has said he needs the Productivity Commission report before making long‑term funding decisions, with that report likely to be handed down next year. In the meantime the government plans short‑term action to keep operations going.
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