The Australian Financial Review reports:
“General Motors Holden needs a commitment from the Abbott government on financial subsidies within two months or it is likely to announce it will cease making cars in Australia.
“Holden had promised it would keep its Adelaide manufacturing operations until 2022 under a $275 million ‘co-investment’ negotiated by the Gillard and South Australian Labor governments that would see it develop two new vehicles after 2015.
“But the US-owned company now argues the circumstances have changed and the new Coalition government has yet to commit to any specific arrangements for the industry beyond 2015 other than to promise a Productivity Commission review into car industry subsidies.
“If Holden is to stay until 2022 under the deal with Labor, it needs to begin preparations straight after Christmas.”
Let’s call this for what it is: extortion.
Abbott took the most sensible approach into the election, refusing to sign blank cheques for the beleaguered automotive manufacturing sector. Now the real test: will he stand firm?
It was a pretty long standing policy in opposition, apparently supported by Hockey and others. The extortion is pretty blatant and apparently General Motors feels it can keep increasing its price above previous ‘agreements’. As BK often observes, the most direct political pressure comes from the manufacturing unions, which the Coalition would presumably pride itself on ignoring. So it seems likely the Coalition will retain its policy of no more handouts to multi national car manufacturers.
Call their bluff. If GM imagine they can get a better deal elsewhere they should take it – without delay.
And they should be tipped off about building the wrong cars for the 21st century.
How can Abbott buckle now – after what he’s said?
Mitsubishi did the same for years, SA has not missed them one bit and they won’t actually miss GM.
The other night I watched a BBC doco. called Requiem to Detroit which showed how the car industry had destroyed Detroit and surrounding areas by choice, it was ugly.
The government of every car-manufacturing country in the world subsidises the industry. What is different in Australia? Perhaps we could have a GENUINE article written about that in Crikey, instead of this nonsense.
If the car industry goes – there are a dozen reasons why it shouldn’t – what is your (and Abbott’s) answer to the tens of thousands of ordinary Aussies who will lose their jobs? That is 16,000 jobs in South Australia alone. Seems there is more than a little bit of: I’m alright Jack – up yours, in the attitude of Crikey and others here.
Why don’t we think outside the square, and look at what other countries do? I understand that in France, the government does not just hand out money, but takes shares in the three car companies operating there. That way some of the profits come back to the taxpayer, they maintain their car industry, and people keep their jobs. Surely that can’t be all wrong?