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The $275 government assistance package that will keep GM Holden making cars here until 2022 will also trickle through the rest of the component supply industry.
Holden had publicly declared the need for continued government aid to keep making cars in this country and yesterday's announcement guarantees that two new platforms will roll down the production lines at Elizabeth, South Australia, in the second half of this decade.
Instead, 4600 Holden staff can now have some certainty in their job security. It also ensures the Gillard Labour Government won't deliver bad news across multiple states, as would have occurred had Holden announced it was shutting local production.
"In January this year we were at real risk that there would be no more Holden in Australia, that we wouldn't have Holden here producing motor vehicles," Julia Gillard said yesterday.
"That wasn't acceptable for me as Prime Minister and it wasn't the right thing for the nation's future. "It would've been a knockout blow for manufacturing in this country, given the importance of the auto industry to all of manufacturing."
Holden estimates the investment will return around $4 billion over the life of the agreement. "Holden will receive government co-investment of $275 million and directly invest well in excess of $1 billion dollars in the 10-year vehicle development and manufacturing program," Holden chairman and managing director Mike Devereux said.
"The investment will help Australia retain its capability to design, engineer and build cars with two all-new vehicles going into production at Elizabeth, South Australia, in the second half of this decade."
The Federal Government is believed to have chipped in $215 million with the South Australian and Victorian governments thought to have contributed $50 million and $10 million respectively.
AT A GLANCE
Holden to contribute $1 billion with $275 million of government aid to keep making cars for the next decade Two new architectures to be built in South Australia. Holden doesn't have to decide which models, but the next-gen Cruze is a logical starter, with either a large sedan based on a GM global platform, or a SUV.
The move follows January's announcement of a $103 million government aid package for Ford, which has kept its Geelong and Broadmeadows production sites open until 2016.
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