Australian Manufacturing Minister to Meet With U.S. Auto Execs in Detroit

Australian Manufacturing Minister Kim Carr says GM Holden will decide its long-term manufacturing future in Australia within weeks, and Ford and Toyota are close to major investment decisions in the country.

The Age newspaper in Melbourne says Carr will meet with auto industry executives in Detroit next month to urge them to guarantee the future of their operations in Australia.

Carr says the three major auto makers, under increasing pressure from reduced demand for large cars, market fragmentation, low import tariffs, a push to globalize products and a high Australian dollar, nevertheless should be confident of the Australian government's commitment to the industry.

Ford and GM Holden plan to update their Falcon and Commodore large cars, but neither has announced any decision on new models for their Australian plants beyond 2017.

Carr says he believes in government partnership investments rather than handouts and will be seeking to help the auto makers with money from Australia’s A$5.4 billion ($5.38 billion) New Car Plan for a Greener Future federal fund.

The government recently redeveloped the fund and is looking at using research-and-development concessions, elements of climate-change industry assistance and a reordering of spending in the existing fund to secure new investment commitments from the major car companies.

The Australian newspaper quotes Carr as saying local auto makers are under “acute stress,” and he will present a reworked plan to the CEOs in Detroit in an effort to secure a new round of investment.

Carr also says he wants to send a message of reassurance to the auto industry that the projects on which he had been working when he was dumped as industry minister and moved to oversee manufacturing will continue.

Carr’s intention for his trip to Detroit during the North American International Auto Show is to discuss ways to overcome the serious challenges facing the Australian industry, which directly employs more than 50,000 people.

The high Australian dollar, which has risen above the U.S. dollar for much of this year, has had a devastating impact on export markets.

“We are now facing a situation where we are producing less cars today than we did in 1957,” he tells The Australian. “We have 40-year lows. This is a direct consequence of the price on the Australian dollar."

GM Holden's Elizabeth manufacturing plant in South Australia and its design, engineering and engine facilities in Melbourne are facing “considerable pressure” in an environment where the industry is moving towards global platforms, Carr says.

But the minister says he remains “absolutely confident” of keeping GM Holden, Ford and Toyota in Australia if the right policy settings, as well as future investment commitments, are in place, because the auto industry is at the core of the county’s manufacturing capabilities.