Government Minister Says GM Holden Denies Oz Pullout

The Australian Broadcasting Corp. is reporting GM Holden has decided to end manufacturing in Australia as early as 2016.

Citing unnamed senior government ministers, ABC says it was told the announcement was to be made this week but has been put off until early next year.

Industry Minister Ian Macfarlane tells the government-owned broadcaster he has spoken with GM Holden since the ABC report was broadcast and the General Motors subsidiary has denied the reports.

ABC quotes GM Holden as saying its discussions with the government are continuing, and it does not respond to speculation.

The federal government has said it won’t make a decision on auto-industry aid until it receives the findings of a Productivity Commission inquiry. A preliminary report is due before Christmas and the final report in March.

However, ABC says a source told it GM Holden wants to leave Australia regardless of any assistance package.

The Australian car-manufacturing sector is under pressure from soaring production costs, a high Australian dollar and low import tariffs, making it cheaper for most consumers to buy foreign-made cars. About 85% of sales are imported.

Mitsubishi ended local manufacturing five years ago and Ford is doing so in 2016.

The Australian Manufacturing Workers Union says if GM Holden ends local production, the resulting higher supply costs likely would force Toyota to follow suit.

John Camillo, AMWU secretary for South Australia, says GM Holden Chairman and Managing Director Mike Devereux did not mention a closure when he addressed workers Thursday at the automaker's Elizabeth plant in Adelaide.

“He just indicated to workers he will be continuing his role as CEO of Australia until February (2014), until he gets a replacement,” Camillo tells ABC. “He indicated a decision will be made by GM in Detroit whether Holden stays or not.

“I find it strange he addresses all the workers, doesn't indicate in regards to closure or speculation, and all of a sudden there is discussion or talks about a senior minister having understandings of this ceasing operation in Australia.

"At this stage we have to treat it as speculation, but it is up to the senior executive at Holden to allow the workers to be the first ones to be told if there is any truth in this speculation.”