Parts makers ring alarm bell on car sector survival odds

Car parts manufacturers would be devastated and thousands of jobs lost if Holden quit manufacturing in Australia, industry figures warn.

Car parts manufacturers would be devastated and thousands of jobs lost if Holden quit manufacturing in Australia, industry figures warn.

"We know that Ford's leaving - if Holden decides to leave, then we don't believe Toyota is sustainable," Diver Consolidated Industries chief executive Jim Griffin said.

"That means the industry will effectively die in three to four years and that would just about be curtains for us."

Ford has committed to closing its plants in 2016 and Mr Griffin argues that if Holden was also to shut down, that would force suppliers out of business, leaving Toyota without a large enough manufacturing base to make its local operations viable.

Based in the northern Melbourne suburb of Reservoir, Diver employs 115 people stamping, die cutting and welding parts, 70 per cent of which are supplied to Ford and Holden.

"We are a company that's been supplying to Holden since 1948, so if they were to leave the country, it would be not very good news for us whatsoever," Mr Griffin said.

He said speculation about Holden's future was "unhelpful".

Holden may reveal more about its plans on Tuesday, when it appears in front of a Productivity Commission inquiry into the automotive industry. An interim report is due before Christmas.

Federation of Automotive Products Manufacturers chief executive Richard Reilly said Holden bought more than $2 billion in parts a year.

"If Holden ceases manufacture here in the medium term, there's no doubt some companies will cease manufacture in Australia," he said. "Thousands of jobs would be lost."

FAPM estimates that of about 45,000 people employed in the car making industry, between 30,000 and 33,000 work for parts makers. Mr Reilly said those businesses faced "diabolical scenarios" if only Toyota remained in Australia.

"Essentially the question is: can you have an automotive industry with one manufacturer here? I think it's pretty unlikely."

Mr Griffin attacked free trade agreements entered into by Australia, saying they did not help car makers enter foreign markets.

He said he wanted the government's support of the industry to continue.

"Australia really needs to make a decision - they either want an elaborately based automotive sector or they don't, and if they don't, we're going to have to find something else for these people to do.

"I'm afraid I can't see that there's anything else for these people to do and it's going to leave a huge hole."

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