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Govt playing 'chicken' with industry: Carr

Mr Carr fears Holden has missed an internal GM deadline for investment allocation for production of future models.
Joshua Dowling
CarsGuide

30 Oct 2013 • 5 min read

Shadow minister for industry Kim Carr says Holden’s manufacturing future is "bleak" and has accused the Federal Government of "playing chicken" with the car industry by missing a critical General Motors investment deadline.

As the Productivity Commission today released the Terms of Reference into a new study into the struggling industry, Mr Carr revealed that the General Motors board met to discuss Holden’s manufacturing plans within the past month, just prior to promoting Holden boss Mike Devereux to an international role based in China.

"The (General Motors) board met about three weeks ago and it discussed the Australian Government’s approach, and my information coming out of that board meeting is that the mood is very bleak," Mr Carr told News Corp Australia.

"It’s quite clear this government is playing chicken with the international automotive companies. This report is a giant ruse to get past the South Australian election (in March 2014)."

Mr Carr said the Terms of Reference were so broad they were setting up the industry to fail.

"One could assume these Terms of Reference being so broad would take well over a year to conclude, or the Commission has already made up its mind," said Mr Carr.

"General Motors provided detailed briefings to the (Government when in) opposition. To claim that they don’t know what’s going on and they need further studies is, in my view, a complete nonsense."

Mr Carr fears Holden has missed an internal General Motors deadline for investment allocation for production of future models. "There are international release dates for new models for the company’s schedules around the world," said Mr Carr. "General Motors has 168 plants around the world in over 20 countries. There is intense competition for investment.

"The international investment committee’s got to make the decision to spend the money and they’ve already missed the window for Christmas."

Mr Carr said he believed the newly elected Coalition Government “just does not have a sense of urgency about this situation".

"Given the state of emergency in the industry you would have thought the Minister would have gone off to Detroit to at least talk to the senior management there.

"The fact remains if General Motors goes, given that the automotive industry is an eco-system, Toyota will not be able to survive."

Federal Industry Minister Ian Macfarlane is in Japan today to meet with senior executives from Toyota. The two most senior Toyota Australia representatives, Max Yasuda and Dave Buttner, are also in the three-hour meeting, which was due to be held between 9am and midday Japan time.

Speaking from Japan, Mr Macfarlane told ABC Radio this morning: "We’re keen to ensure that Toyota understands how important it is to Australia that we maintain a car manufacturing industry in the country and Toyota play a critical role in that.

"I’ll also be making it clear … we won’t be able to respond in terms of any long term position until the early or mid part of 2014."

When asked about missing Holden’s December deadline, Mr Macfarlane told ABC Radio: "I made it clear to Holden right from the start we’re not in a position to give them an answer before Christmas. They may not accept that readily but that’s the reality.

"I’m not going to put in place a long term car plan without doing a full assessment of the situation. This is the process it has to take time, we can’t just throw out a heap of money and hope that we fix it because that will inevitably lead to the failure of the car industry.

"If that is their drop-dead position then I can’t help them. They’ve known that for two months."

"Every other country in the world subsidizes car manufacturers, in most cases far more expensively than Australia. We want to get all those facts on the table."

A joint statement issued by the office of Mr Macfarlane and Federal Treasurer Joe Hockey last night said the Productivity Commission would “examine the best way that the Australian Government and Australian economy can ensure the ongoing viability of the automotive industry … including a sustainable and profitable automotive manufacturing sector”.

But the Terms of Reference will have the car manufacturing industry worried. The inquiry will include examination of “international competitiveness, exports, workforce structure and practices, skills levels and long-term sustainability”, areas where the Australian industry is notoriously weak.

The statement also said the independent Productivity Commission would investigate "the potential for Australian made cars to be exported overseas … and Australia’s attractiveness as an investment location for all phases of automotive manufacturing activity".

Exports have been blunted by the strong Australian dollar and investment in new factories have been quashed by Australia’s proximity to South-East Asian countries, where labour rates are one quarter of Australia’s.

The Productivity Commission will also reassess the level of taxpayer support given to car makers in other countries, most of which manufacture more cars, create more jobs and export many times more vehicles to more markets than does Australia.

This reporter is on Twitter: @JoshuaDowling

 

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