The debate over the future of Holden moved into top gear on Tuesday when chief executive Mike Devereaux told a Productivity Commission inquiry in Melbourne that there was no timeframe for the decision on Holden’s Australian operations.
Mr Devereux told the Productivity Commission that the cost of losing the car manufacturing industry would dwarf the cost of keeping it, and warned of the disastrous effect Holden’s withdrawal would have on the economy.
“The economic benefit of us making things is $33 billion to the Australian economy,” he said. “That’s 18 times the assistance we receive.”
But he also declined to outline any timetable for a decision and warned that ongoing government support was vital for the company to continue to invest in local production.
“We need a public/private partnership over the long term to be able to be relatively competitive,” Mr Devereux told a Productivity Commission inquiry into the automotive industry.
Everyone else has their say
It was an appearance that triggered a spirited response from all sides of the debate.
“So today I have written to the general manager of Holden, Mr (Mike) Devereux, asking General Motors to make an immediate statement clarifying their intentions,” Mr Truss said during question time.
Mr Truss said just two years ago the company was reporting sustainable profitability, yet now it had not ruled out abandoning manufacturing in Australia.
“They owe this to the workers of General Motors – let us not go into a Christmas period without them making a clear commitment to manufacturing in this country,” Mr Truss said on Tuesday.
Asked about Mr Devereux’s comment that the cost of losing the local car manufacturing industry would dwarf the cost of keeping it, Mr Hockey said: “There is no shortage of money that has been going to the motor manufacturing industry.”
The treasurer said $1.1 billion was given to the sector in 2011 – equating to about $48,000 per manufacturing worker – and another $1 billion had been put on the table.
“There is a hell of a lot of industries in Australia that would love to get the assistance that the motor vehicle industry is getting,” Mr Hockey told parliament.
“A hell of a lot of other businesses and foreign owned businesses that would love to be able to remit taxpayer money from Australian taxpayers to head office in Detroit, or London or Tokyo or anywhere else.”
Meanwhile, the opposition said that without a car manufacturing industry Australia risked being just a quarry, a farm and a beach.
Holden is considering its future in Australia as it battles the high dollar, cost pressures and tough overseas competition.
South Australian Premier Jay Weatherill said Mr Devereux had made it clear the company wanted to stay in Australia and had “kicked to death” reports that a decision to close had already been made.
“Mr Devereux has given the clearest of possible indications that Holden is not going to close and they want to continue making cars in Australia,” the premier said.
“It’s over to the federal government. No more excuses, the focus is on them. The future of Holden is in the hands of the prime minister.”
The Australian Manufacturing Workers Union (AMWU) said Mr Devereux’s comments were good news but failed to provide any assurances for workers.
“It keeps us in the ball game,” a spokesman said.