The US company said it has made no decision on whether to stop making cars in Australia after 2016, but added that it would need continued assistance from the Australian government to survive long term.
Annual subsidies of about Australian $150 million ($136 million) a year result in A$33 billion of economic activity, Managing Director Mike Devereux told the government’s Productivity Commission in Melbourne today. Detroit-based GM hasn’t made a decision on its future in Australia beyond 2016, he said.
“That is a very good return for the economy of this country,” Devereux said. “There is a level of assistance that needs to be there for GM to make a business case viable to be able to make cars here.”
Japan’s Mitsubishi was the first to pull the plug on manufacturing in Australia, exiting in 2008. Ford announced in May it would close its two Australian auto plants in October 2016.
“We need a public-private partnership over the long term to be relatively competitive,” Mike Devereux also said.
His appearance before the panel was being closely watched as there had been speculation he might announce a decision Holden’s future.
It costs $3,750 more to build a car in Australia than at GM’s other plants in Asia, he said, and that gap would have to shrink with the help of government assistance and further cost-cutting in order to keep the operations open.
He praised the U.S. government’s decision to bail out car makers during the global financial crisis, saying that had spurred the industry’s resurgence, and said as the No.2 car brand in Australia, Holden wanted to continue making cars here.
Australia’s Acting Prime Minister Warren Truss has written to GM asking for an “immediate statement clarifying their intentions,” he told parliament in Canberra today.
Holden continues to make the case to GM that it wants to make two types of vehicles in Australia, Devereux said, amid reports by the Australian Broadcasting Corp. and the Wall Street Journal that the unit will cease production in the country as soon as 2016.