·High dollar hurts Holden

Holden has confirmed it will shut down operations in Australia by 2017.

Speculation about the carmaker’s future has been rife in recent months, after the Abbott government said there would be no additional assistance for the business.

“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”

Holden said it would  cease “vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017”. It would “transition to a national sales company in Australia and New Zealand”.

The iconic Holden Commodore. AAP

The decision will affect about 2900 workers over the next four years, comprising 1600 from the Elizabeth vehicle manufacturing plant and approximately 1300 from Holden’s Victorian workforce.

GM Holden managing director Mike Devereux said the company would focus over the next four years on “the best possible transition for workers in South Australia and Victoria”.

“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” said Devereux. “We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.”

In a statement, the company said the sale and service of Holden vehicles would not be affected by the decision and would continue through the dealership network.

Earlier this year, Ford announced it would close its manufacturing operations in Australia in 2016.

‘Black day’

South Australian Premier Jay Weatherill says the closure of Holden’s manufacturing operations marks a black day for the state.

The premier says the government will support the company’s workers and their families and SA will overcome the challenge and emerge stronger.

But he has also condemned Prime Minister Tony Abbott and the federal government for failing to support the company.

“Holden’s decision to close its Elizabeth plant is devastating news for the workers and families who rely on the automotive industry,” Mr Weatherill said.

“Tony Abbott and his coalition government have turned their backs on this industry and the people in it.

“By cutting funding and, in the past week, by attacking Holden, Tony Abbott and the coalition have forced Holden out of Australia.”

Holden has announced it will end car and engine production in Australia by the end of 2017, with the loss of 2900 jobs across South Australia and Victoria.

The ripple effect

The announcement comes as a major blow not only to Holden workers but to the businesses which supply the automotive industry.

The Federation of Automotive Products Manufacturers national president Jim Griffin says about 40,000 people work in the sector.

“It’s not just about Holden. It’s about small companies … all around Australia that will disappear in two or three years time if this industry does not continue,” he told reporters in Canberra on Wednesday.

“If we lose the automotive industry, we will no doubt lose many other manufacturing industries as well.”

Mr Griffin also said there wasn’t any automotive industry in the world that didn’t get government support.

“If you cut the trunk down, the branches will come down with it,” he said.

Mr Griffin also questioned whether free trade agreements between Australia and Thailand, Malaysia and South Korea would help the car industry.

“I doubt whether any of those agreements are going to result in one Australian motor vehicle being exported into those markets,” he said.

More to come