Holden seeks extended warranty
The company announced this week it would attempt to slash wages at its manufacturing plants.
On Wednesday, managing director Mike Devereux also indicated the company's future in the country was not certain if government funding was not locked in over a long period.
Coalition industry spokeswoman Sophie Mirabella, who has been in discussions with Mr Devereux, said if Tony Abbott won the federal election, she was confident the car industry would survive.
Under the Gillard government's assistance scheme, $1.5 billion will be paid out between 2011 and 2015, and a further $1 billion over the following five years.
The Coalition will cut the first round of funding to $1 billion, but it has also pledged to leave the second round of funding in place, while simultaneously promising to hold a Productivity Commission review into car manufacturing. This has caused some doubts within the auto industry over the money.
Ms Mirabella said Labor's plan to save the car industry had not worked.
"Ford has gone under their watch, when they've given more and more money to the car industry," she said.
"We think there can be a viable auto sector, but there needs to be a change in funding guidelines to look at long-term viability of the industry."
She said "no car company has said to me they are going to leave the country because we have reduced the fund by $500 million".
Following a funding pledge from federal and state governments last year, Holden said it would spend $1 billion on its Adelaide plant. But Mr Devereux said this was not certain. "Some people think that we have already been given money to do that investment but that is a prospective investment that we have not made."
He said the long lead-times of the car industry meant Holden needed certainty for the next decade on government funding.
The company is poised to start investing in its new Adelaide plant by the end of this year to help manufacture new-model Cruze and Commodore vehicles, but wants guaranteed funding until about 2022 before it begins spending the money.
Other industry figures said if Holden believed there was a risk to funding from the federal government, the company would simply walk away from production in Australia and import vehicles, because this would be more profitable.
The national secretary of the Australian Manufacturing Workers Union's vehicles division, Dave Smith, said: "If [car makers] can't lock in the required government funding from a Coalition government ... they will leave Australia."
Frequently Asked Questions about this Article…
Holden says the car industry needs certainty because of long lead-times for vehicle programs. Managing director Mike Devereux warned the company's future in Australia is uncertain unless government funding is locked in over the next decade, and Holden wants guaranteed support before committing to major investments.
Under the Gillard government scheme, $1.5 billion was scheduled to be paid between 2011 and 2015, with a further $1 billion planned over the following five years, for a total of $2.5 billion.
The Coalition plans to cut the first round of funding to $1 billion (a $500 million reduction) while keeping the second round intact and commissioning a Productivity Commission review into car manufacturing. This uncertainty has raised doubts in the industry and is a key reason Holden is pushing for longer-term guarantees.
The article reports Holden warned it could follow Ford out of Australia if long-term government funding is not secured. Industry figures and the Australian Manufacturing Workers Union national secretary, Dave Smith, also said carmakers could walk away from local production and import vehicles if funding can’t be locked in.
Following earlier federal and state pledges, Holden has said it would spend $1 billion on its Adelaide plant. However, Mike Devereux clarified that this is a prospective investment and not guaranteed — Holden wants funding certainty up to about 2022 before beginning the spending.
The company announced it would attempt to slash wages at its manufacturing plants as part of cost measures, according to the article.
Sophie Mirabella said she was confident the car industry would survive if Tony Abbott won the federal election. She also argued Labor’s plan had not worked, saying ‘Ford has gone under their watch,’ and noted that no car company had told her it would leave because the fund was reduced by $500 million.
Holden said it was poised to start investing in its new Adelaide plant by the end of the year to help manufacture new-model Cruze and Commodore vehicles, but it wants guaranteed government funding until about 2022 before it begins that spending.
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