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OFFICIAL: Holden Ending Australian Production By 2017 Photo:
 
 
Mike Stevens | Dec, 11 2013 | 50 Comments

HOLDEN ENDING AUSTRALIAN PRODUCTION

UPDATED 15:55 AEDT WEDNESDAY.


Holden has today confirmed what many had expected, but most hoped would not come about: the carmaker will close its Australian manufacturing operations by the end of 2017.

The General Motors Holden company and brand will remain in Australia "as a national sales company", transitioning to a fully imported range. The company will also maintain the existing design studio at its Port Melbourne headquarters.

The announcement came just 24 hours after Holden Chairman and Managing Director Mike Devereux told the Federal Government's Productivity Commission in Melbourne that a decision on Holden's manufacturing future had not been made.

Mr Devereux said yesterday that he would not speculate on the carmaker's future in Australia while the Commission's inquiry was still ongoing.

Victorian Premier Denis Napthine confirmed today that his office had been advised that the decision was made by General Motors in Detroit.

GM Chairman and CEO Dan Akerson joined Mr Devereux in making today's announcement.

“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," Mr Akerson said.

Holden's exit from manufacturing in Australia will directly impact around 2900 positions: some 1600 at the company's Elizabeth plant in South Australia, and around 1300 in Victoria.

Also under threat are the jobs of around 45,000 people employed directly and indirectly by vehicle carmakers and suppliers here.

Toyota, also known to be reviewing its Australian operations in a bid to reduce production costs per-vehicle by around $3500 before 2018, may have its hand forced with Holden's departure.

Mr Devereux said today that a top priority for the company over the next four years will be to ensure "the best possible transition" for its workers in South Australia and Victoria.

“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” he said.

“We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people."

The company confirmed it will incur costs through 2017 for incremental future cash payments of employee severance, with negotiations planned with the employees' union.

He said that GM as a global company remains committed to the automotive industry in both Australia and New Zealand.

General Motors, Mr Devereux said, recognises the need for change and understands the Australian government's position on funding.

"Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed," he said.

"The appreciation of the currency alone means that at the Australian dollar’s peak, making things in Australia was 65 percent more expensive compared to just a decade earlier."

Toyota Australia has responded to today's announcement:

"This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia," the company said in a statement.

We will now work with our suppliers, key stakeholders and the government to determine our next steps and whether we can continue operating as the sole vehicle manufacturer in Australia.

We will continue with our transformation journey as planned."

Holden's 2017 manufacturing closure will see it join Ford (ending in 2016), and Mitsubishi, which closed its Australian production facilities in 2007.

 
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