Coalition asks for time on car industry funding

The federal government has committed to a "no nonsense" final stand to save the Australian car industry, but in the same breath acknowledged it cannot give manufacturers what they really need: a quick decision on long-term funding.

The federal government has committed to a "no nonsense" final stand to save the Australian car industry, but in the same breath acknowledged it cannot give manufacturers what they really need: a quick decision on long-term 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."

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