Funding talks 'crucial' for Holden future

General Motors Holden will on Wednesday start funding talks with the Abbott government in a bid to salvage the ailing car manufacturing industry.

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."