No decision yet on GM Holden's exit in Australia

By Nicel Jane Avellana

Dec 10, 2013 12:19 AM EST

General Motors Co has not decided on whether to exit car manufacturing in Australia after 2016, a Reuters report said. However, GM Holden said it would need the help of the government of Australia to be able to survive for the long-term. The report said that for years, the auto industry in the country has relied on government support as costs have increased and the Australian dollar has strengthened. They have also depended on the support from the government because of weak exports and cheap imports.

GM Holden's Head Mike Devereux told a government-appointed panel, "We need a public-private partnership over the long term to be relatively competitive." The panel was appointed to look at the car industry's future in Australia, where Devereux's appearance was closely anticipated as there have been rumors that he would make an announcement about the future of Holden.

Reuters reported that the first carmaker to exit manufacturing in Australia was Japan's Mitsubishi Motors Corp, who pulled the plug five years ago. In May this year, Ford Motor Co said it would be closing its two auto plants in Australia in October 2016.

Devereux said it would cost USD 3,750 more to have a car built in Australia as compared to the other plants of GM located in Asia. Government assistance and further cost-cutting measures would be needed to help close the gap so that operations could continue. He also lauded the decision of the US government to rescue carmakers during the worldwide financial crisis, saying that this led to a revival of the car industry.

Devereux said Holden wanted to keep on manufacturing cars in the country as it is the No. 2 car brand in Australia. He added, "The budgetary cost of losing this industry would dwarf the cost of keeping it." However, he did not say how much financial assistance they wanted to get from the government.

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