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GM deal to secure Holden future

The new deal is aimed at locking the company into GM's future global product plans.

The Koreans starred, the Japanese mounted a comeback, and One Ford hit the headlines with an extended family of Focus-based newcomers that it is certain to make a big hit in Australia. But it was one car and the commitment of its company chief that made the most impact as America fought back on the opening day of the 2011 North American International Motor Show.

The company's manufacturing operation in Adelaide and its research base at Fishermans Bend are the target for a renewed commitment from General Motors on one side and both state and federal governments in Australia aimed at taking the company through to at least 2020.

High-level talks in Detroit today have yet to produce a concrete deal but there are positive signs that the Federal government will dip into a $3.4 billion fighting fund to produce a co-investment plan to secure two car lines for Holden's factory at Elizabeth.

"I think we've reached a position where an agreement looks likely," says the South Australian premier, Jay Weatherall.

Holden is already committed to the upcoming VF Commodore in 2014 and its compact Cruze through to at least 2016, but the new deal is aimed at locking the company into GM's future global product plans. Holden knows it cannot go alone as it has in the past and the Federal Minister for Industry, Senator Kim Carr, says his government supports any move to protect jobs in the Australian automotive sector.

"It's strategically vital. The loss of the industry is irretrievable. It will cost a lot more, a lot more, if we don't have an automotive industry in Australia," says Carr.

"Our approach is about building and maintaining capability in Australia. We are in the business of fighting for jobs. That's what this is all about. Fighting for Australian jobs and fighting for partnerships that take us through the rest of this decade."

Carr met with the chairman of GM, Dan Ackerson, yesterday and says a working group has been established to plow through the detail of a new co-investment deal that would secure funding from Detroit and balance it with cash from Canberra.The government has money available from the $3.4 billion Automotive Transformation Fund, under the latest car plan that runs until 2020, to support any commitment from GM.

"Am I confident there is a way forward for Holden? Yes, I'm confident," says the chairman of GM Holden, Mike Devereux.

He will not go into any detail but says Holden wants to continue with two individual models on its production line in South Australia, as well as a continuation of its large portfolio of design and engineering work throughout the GM world.

"We are working on a long-term sustainable future for this company. We're talking about things that won't become true until late 2016," Devereux says.