Oz Industry Minister Unsure of GM Holden Aid

Australia’s new industry minister says it will be “one hell of a challenge” to save the 105-year-old local production at GM Holden.

But Industry Minister Ian Macfarlane calls his visit to the automaker's manufacturing plant in Adelaide, his first since the Coalition parties defeated the Labor government in the Sept. 7 general election, a first step toward helping secure a future for local car production.

He tells the Australian Broadcasting Corp. he wants to wean GM Holden off taxpayer assistance in the longer term, but hopes the General Motors parent in Detroit will be patient regarding the next round of federal subsidies, which he says will be the last.

Macfarlane tours the plant before talks with GM Holden Chairman and Managing Director Mike Devereux, other federal officials, state government and opposition representatives and union delegates.

“All parties have shown a willingness to take part in a genuine dialogue on the future of one of Australia’s major manufacturing sectors,” he says in a statement.

“(The) talks are part of a series of discussions I am holding with all parts of the industry because the issues it faces are not confined to just one manufacturer and any solutions will be sectorwide.”

Macfarlane says any future action on the industry will be guided by a Productivity Commission review that will consider issues of productivity and sustainability.

“I am determined to ensure that car manufacturing in Australia will be able to become self-sufficient,” he says. “This is a goal that everyone would share and I believe it is achievable.

But the Australian Associated Press quotes Macfarlane as saying he doesn't yet know where the money to assist GM Holden will come from and warns parent GM that it could take some time to find a solution.

“This is one hell of a challenge,” Macfarlane tells reporters. “One hell of a solution is required. There will be one shot at this.”

Founded in Adelaide in 1856 as a saddlery manufacturer, Holden moved into the automotive sector in 1908. It became a GM subsidiary in 1931.

Devereux declines to say how much extra assistance GM Holden now needs on top of the A$275 million ($284.4 million) agreed to last year, but AAP says it is thought to be close to A$500 million ($517.2 million) before the automaker commits to developing and building two new models beginning in 2016.

Macfarlane, meantime, says the government also intends to stand by its election promise to cut A$500 million from total auto-industry assistance.

“It won't break the car industry,” AAP quotes him as saying. “I'm confident I can get around that. I’m not concerned about the next six months. I'm not concerned about the next three years. My goal is to see Australian cars built here for 100 years.”

The industry, however, must become internationally competitive and survive without ongoing government assistance, he says.