Funding talks 'crucial' for Holden future
In meetings being described as "crucial" to Holden's future - as well as that of rival car maker Toyota and the accompanying parts supply chain - managing director Mike Devereux will host Industry Minister Ian Macfarlane on a tour of the company's Adelaide manufacturing facilities.
It is understood South Australian premier Jay Weatherill, Independent Senator Nick Xenophon and possibly former Labor Industry minister Greg Combet will be among those in attendance for the tour and subsequent sit-down discussions.
Workers are anxiously awaiting the outcome of the talks, with Holden poised to make a decision on its long-term future in the coming months.
Australian Manufacturing Workers Union SA secretary John Camillo said workers were urgently seeking clarification on their futures.
"You have 1700 Holden workers in the component sector worrying day in, day out on whether there's a future for them beyond 2016," Mr Camillo told Fairfax Media. "It's the same emotional roller-coaster they went through when Holden decided workers needed to take pay cuts.
"The final straw now is waiting on the government to make that decision: are they going to put that additional money in for a 10-year co-investment plan?"
In August, Holden workers accepted a variation to their enterprise agreement to help the company achieve $15 million in annual savings. Among the measures agreed to were a three-year wage freeze and adjustments in overtime and meal break allowances.
"We didn't just pick the low-hanging fruit in the trees, we sat down and looked at not just a wage freeze but looked at a lot of things that gives that cutting edge for Holden in regards to being more competitive in an international market," Mr Camillo said.
"Workers have given up a lot in regards to wage freezes and doing everything the company wants. Now we're just waiting on the Abbott government to give the go-ahead in regards to the replacement of the Cruze and Commodore."
Government co-investment is crucial to General Motors' $1 billion plan to continue producing cars locally until at least 2022.
Prior to the election, the Liberal Government vowed to make $500 million in cuts to car industry funding, and last month Prime Minister Tony Abbott reiterated plans to boost export numbers from Holden and Toyota in a bid to improve languishing sales.
An insider said Holden's future was highly dependent on flexibility from the recently elected federal government.
"Holden have always said that they need a decision before the end of the year to begin replacing infrastructure at their Adelaide plant; with that funding being delayed, there is some concern," the source said.
"If we've got to wait until a Productivity Commission inquiry for the automotive industry, that could take nine or 10 months. By then, Holden could have made a decision to close down anyway."
Ian MacFarlane's appointment as minister has been perceived as a blessing by the car industry and Labor insiders, taking the place of former shadow minister Sophie Mirabella. But whether he can persuade the Abbott government to change its position on funding remains to be seen.
"Time will tell on that one," the source said.
"The pressure's on the government to make a decision and if they can't, Tony Abbott will be stuck as the Prime Minister who sank the car industry."
Frequently Asked Questions about this Article…
General Motors Holden has started meetings with the Abbott government to seek funding support aimed at salvaging Australia's car manufacturing industry. The talks include a tour of Holden's Adelaide facilities and sit-down discussions to decide on potential government co-investment and other measures that could affect Holden's long-term future.
The talks are called crucial because government decisions on co-investment and funding will affect whether Holden (and rival Toyota) can continue local production, support the accompanying parts supply chain, and proceed with vehicle replacements and infrastructure upgrades needed to stay competitive.
Holden managing director Mike Devereux is hosting Industry Minister Ian Macfarlane for a tour. South Australian Premier Jay Weatherill, Independent Senator Nick Xenophon and possibly former Labor Industry Minister Greg Combet are expected to attend, along with government and company representatives.
Workers are anxious about clarity on their futures, particularly the roughly 1,700 component-sector employees who face uncertainty about jobs beyond 2016. They are waiting to see whether the government will approve additional funding and a 10-year co-investment plan that would support future production and job security.
In August, Holden workers accepted changes to their enterprise agreement to help the company achieve $15 million in annual savings. Agreed measures included a three-year wage freeze and adjustments to overtime and meal-break allowances as part of efforts to make Holden more competitive internationally.
Government co-investment is central to General Motors' $1 billion plan to keep producing cars in Australia until at least 2022. The article says Holden needs a funding decision to begin replacing infrastructure at its Adelaide plant and that delays could jeopardize that plan.
The article notes Holden has said it needs a decision before the end of the year to start infrastructure replacement. A potential Productivity Commission inquiry could take nine to ten months, and if funding is delayed that long Holden might decide to close down operations before the inquiry concludes.
If the government doesn't provide the additional funding or co-investment, Holden faces the risk of being unable to proceed with vehicle replacements and infrastructure upgrades. The article reports concern that a lack of government support could lead Holden to make decisions that might include closing local operations, with negative consequences for workers and the supply chain.
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