Holden closure: Kim Carr says documents show company can be saved for $150m per year

Updated

Former Rudd government minister Kim Carr says the Coalition could save Holden for as little as $150 million per year and secure the entire Australian automotive industry by spending double that.

On Friday Prime Minister Tony Abbott declared there would be no more taxpayer's money for the car company and called on it to reveal what it has planned for its Australian operations.

Senior Government ministers have told the ABC they believe Holden is on the verge of announcing it will cease production in Australia as early as 2016, although Industry Minister Ian MacFarlane says no decision has been made.

But Senator Carr has told Newsradio the Government has known for some time that preserving Holden's Australian operations would cost less than $150 million extra per year.

"There is no question that this government is seeking to drive General Motors out of Australia," he said.

"For $300 million a year, Holden, Toyota and 160 component manufacturing companies plus all the suppliers that flow from there can be preserved but the Government does not want to face up to its responsibilities."

He says the figure is based on analysis drafted by senior officials in the Department of Innovation in the lead-up to the last election, that the Coalition has had access to.

But Federal Employment Minister Eric Abetz says more taxpayer funding would not necessarily prevent Holden from closing in Australia.

He says it is ultimately a business decision.

"Mitsubishi said to the Australian government when Labor first won office - no matter how much you offer us, we are going to close down," he said.

"Similarly, Ford in recent times said the same thing. And therefore we've got to accept the fact that it's not only an issue of how much goes to these car companies."

The Coalition ministers who briefed the ABC believe the decision about Holden's exit has been made by its parent company in Detroit, General Motors, as part of a global restructure.

An announcement by General Motors that it will no longer sell the Chevrolet to Europe has added weight to their claims.

The ABC has been told the announcement on Holden's exit was supposed to be made during the week, but has been put off until early next year due to balance-sheet issues.

'Ideological obsession' costing Australia jobs: Carr

The Labor Opposition says the Coalition is deeply divided over assistance to the car industry and support for jobs.

"There are dries within the Liberal Party that are trying to force General Motors out of Australia," Senator Carr said.

"They have this ideological obsession, a hatred for the automotive industry and that's being played out to the point where hundreds of thousands of Australian workers will be sacrificed on the altar of this economic fundamentalism."

The Government has asked the Productivity Commission to carry out a full review of car industry assistance, and Mr Abbott was expected to wait until the report was handed down before making any decisions.

However his declaration on Friday that there was no more money for Holden sparked urgent requests for meetings from the ACTU and South Australian Premier Jay Weatherill.

Views on car industry support

Mr Weatherill says he will meet Mr Abbott in Canberra on Thursday, and is calling on the Prime Minister to reinstate the $500 million it pledged to cut from the industry when in opposition.

"We need to get a very clear message through to him that this is now a matter of urgency," he said.

"The Commonwealth Government needs to put back on the table the money they took off, the $500 million that they took out of auto assistance.

"This gives the best possible chance of securing a future for Holden."

Research released last month suggested that Holden's closure would cost the South Australian economy $1.24 billion and 13,200 jobs alone.

The Australian Manufacturing Workers Union (AMWU) says Toyota would be likely to follow suit, meaning the end of the Australian automotive industry.

In that case, up to 50,000 jobs could be lost across the country, with second and third-tier suppliers also forced to close their operations.

Ford announced in May it would close its Australian operations by October 2016.

Car manufacturing: A sector in decline

The Australian car manufacturing sector has been under pressure for at least 20 years.



Soaring production costs and a high Australian dollar have ultimately made it cheaper for most Australian consumers to buy foreign-made cars.



Analysts say 85 per cent of cars sold here are imported.



Mitsubishi ceased local production five years ago, while Ford announced it would cease its production by October 2016.



The shrinking car manufacturing industry is bad news for the Australian economy.



Extensive government subsidies have aimed to prevent it.



Over the past decade, Ford and Holden have shared in more than $12 billion in taxpayer-funded industry assistance.



The Australian government made a $34 million co-investment with Ford in 2012.



The Federal Chamber of Automotive Industries, which represents carmakers, says the industry directly employs more than 45,000 people across the country, but many of those workers will now be wondering how long their jobs will last.



Topics: federal-government, automotive, industry, business-economics-and-finance, australia

First posted