One Liberal MP, who asked not to be named, said Mr MacFarlane was ''out on a limb'' and that he and Treasurer Joe Hockey had very different views on industry assistance. But Mr MacFarlane said: ''I'm as dry as any of them. The issue is not whether Toyota is viable but can we get them to the point where they can compete with [Toyota operations in] Kentucky and Thailand.''

He left open the possibility of more aid from the federal Automotive Transformation Scheme, which has an estimated $1.38 billion left in it until next year, but said he would wait for the Productivity Commission to hand down its final report on March 31 before making a decision on co-investment.

Mr MacFarlane said Toyota was doing everything it could to continue making cars in Australia but the biggest threat was a battle with unions over pay and conditions.

''All I can do is plead with employees on the shop floor to think about their futures and the need for competitive work practices. I'm not comparing them to an assembly line in Thailand. I'm talking about the Toyota plant in Kentucky.

''The unions need to show leadership. The priority should be preservation of jobs, not maintaining archaic conditions in the award.''