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Holden boss meeting GM manufacturing heads

Holden is negotiating for further taxpayer assistance in return for a guarantee it will continue to build cars beyond 2016.

Holden boss Mike Devereux has flown to Shanghai to meet with General Motors executives in charge of manufacturing -- but the future of Holden's car-making factory is no closer to a resolution.

Tim Lee, the head of GM's global manufacturing operations, was due to visit Holden's factory in Elizabeth and meet with politicians last month. But those plans are understood to have been postponed while the new Federal Government awaits a Productivity Commission review into the struggling car manufacturing industry.

Holden is negotiating for further taxpayer assistance in return for a guarantee it will continue to build cars beyond 2016, when the current Commodore is due to be phased out.

Holden says Mr Devereux's visit to Shanghai this week is "routine business". But Mr Devereux will for the first time meet his new boss Stefan Jacoby, the former Volvo CEO and senior executive at Volkswagen, who is now the vice president of GM's international operations, based in Shanghai. Tim Lee, the president of GM's international operations and the head of global manufacturing, is also based in Shanghai.

"There's nothing more to say right at the moment," Holden sales and marketing director Philip Brook told News Corp Australia, when asked for an update on Holden's negotiations with the Federal Government. "We're doing everything we can to make sure we have a viable future here … a huge amount of work's got to be done."

Contrary to speculation, international General Motors executives were not trying to shut Holden's factory, Mr Brook said. "Everyone's keen to keep manufacturing here," he said. "We've still got a strong manufacturing business, no question about it. We're pretty comfortable with the numbers we're doing and the forward projections."

Holden is on track to build about 88,000 cars this year, half its peak from a decade ago and about 20,000 less than market leader Toyota. But Holden is still building more cars than Ford did last year (35,000) and what Mitsubishi built in its final 12 months of operation before closing in 2008 (12,500).

Holden has been buoyed by a 15 per cent rise in Commodore sales since the new model went on sale mid-year -- and the swing to private buyers who typically pay retail rather than heavily discounted fleet prices.

Sales of the Commodore to private buyers over the past three months were up by 60 per cent, Mr Brook said. Despite the Commodore's resurgence, the former number-one car for 15 years in a row is only just managing to stay among the top five sellers.

Federal Industry Minister Ian Macfarlane has asked the Productivity Commission to fast-track a report on the car manufacturing industry before negotiating with Cabinet colleagues early next year for a new round of taxpayer funding.

Holden had originally said it needed to know by Christmas if the Federal and State Governments were going to increase their contributions. Holden also asked workers to vote on changes to their wages and conditions to meet the deadline.

But that deadline has now been extended well into next year. Mr Macfarlane recently said a decision on funding could be made by "March or April" but could be delayed until even later in the year.

News Corp Australia understands that Holden can wait-out the Federal Government. If the decision is post-poned much later than the middle of next year then Holden will simply push back the on-sale date of the two new models planned: the second-generation the Cruze small car and a large sedan replacement for the current Commodore.

This reporter is on Twitter: @JoshuaDowling


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