Browse over 9,000 car reviews

Voters have final say on Holden | comment

Holden has barely three months to decide the future of its Elizabeth factory.

Holden factory workers may have sacrificed their wages to save the manufacturing future of the company but the nation will in fact have the final say on September 7.

Even though approximately 70 per cent of the workforce voted in favour of new wages and conditions, the vastly different policies on both sides of politics will either seal the fate of Elizabeth — or secure its future. The new round of funding to be announced in Adelaide today by Prime Minister Kevin Rudd will create at least a $1 billion gap between the support for the industry from Liberal and Labor.

The Coalition Opposition wants to cut $500 million from car manufacturing industry funding — the Rudd Labor Government plans to increase it by the same amount. And then add a further $1.5 billion ($300 million a year over five years) beyond 2020. There is another less well known hurdle for Holden that doesn’t involve cash: and that’s time.

The Coalition Opposition says it will start with a Productivity Commission review into the car manufacturing industry and wait until the findings of the report before deciding on any future funding. That process could take 12 to 18 months. The problem is Holden has barely three months to decide the future of its Elizabeth factory.

General Motors head honchos in Detroit and senior management at Holden in Australia must make the call either way by December this year at the absolute latest. That’s when the ground works for new equipment for future models begins and when the new workplace deal kicks-in.

If the Rudd Government gets re-elected Holden will be home free — providing it sticks to its pledge of $2 billion in assistance across all sectors of the industry to 2025. If the Coalition Opposition is elected Holden will have an uphill battle on its hands convincing Tony Abbott about the merits of keeping local manufacturing alive.

A big education process lies ahead given some of the naive comments from the Opposition Leader in recent weeks. Mr Abbott says he will talk to Holden about export potential to increase the output — and therefore the viability — of the Elizabeth factory. But Australia’s strong currency makes exports next to impossible and at the very least unprofitable.

Holden won’t admit it publicly but it loses money on every Caprice police car it exports to the US. And Toyota loses money on every Camry it ships to the Middle East. Even if the strength of the Australian dollar eases in the coming years there is yet another barrier to exports.

The two cars Holden will build from 2016 to 2022 will be built in other General Motors factories far more cheaply than they can be built here — even with Holden workers taking a hit to their hip pockets.

This reporter is on Twitter: @JoshuaDowling