Holden Chairman Mike Devereux announces Holden will be ceasing manufacturing operations in Australia by the end of 2017.

THE Australian car industry is all but dead and South Australia is in shock following confirmation that Holden will cease production after more than 60 years.

Holden will now follow Ford and Mitsubishi out of the country, leaving only Toyota building cars here.

The Japanese maker is also struggling and Holden’s demise will put further pressure on its ability to stay. in Australia. Experts have forecast that it will soon announce its own closure.

Holden general manager Mike Devereux, who just a day before told the Productivity Commission that GM in Detroit had made no decision to close operations, said yesterday "this is an incredibly difficult day for everybody at Holden, given our long and proud history of building cars in Australia".

But he added: "As painful as it is to say, building cars in this country is just not sustainable."

He said the brand would stay on in Australia, however all cars would be built overseas.

In Detroit, GM Chairman Dan Akerson said a range of factors were to blame. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in this country," he said.

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Holden currently builds the new Cruze at Elizabeth, where the Commodore has been made since 1978. From 2017, it will source most of its vehicles from the neighbouring Asian countries that have, through cost competition, played a major part in forcing the shutdown.



Holden will also close its car testing facility at Lang Lang on the southeast outskirts of Melbourne and sack up to 1000 vehicle dynamics engineers and headquarters staff associated with purchasing and manufacturing.

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Mr Devereux said the company had "looked at every possible option to build our next-generation cars here in this country to replace our existing models", but had been unable to see a future. He said he agreed with the decision made in Detroit.

Holden was founded as a King William St saddlery in 1856 and produced its first complete car in 1948. It has dominated the Australian market for almost its entire history.

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But its inability to establish large export volumes, especially in a time of a strong Australian dollar and production costs that are high by world comparison, eventually prompted GM to announce the closure decision - which Mr Devereux said was made hours after he’d testified before the commission’s inquiry into the state of the motor industry.

Premier Jay Weatherill will go ahead with a visit to Canberra today but instead of lobbying the Abbott Government for industry assistance to keep Holden open as planned, he will ask for hundreds of millions of dollars in assistance for sectors of the SA community that will be shattered by the loss of a major employer. and local economic driver.

University of Adelaide economic expert John Spoehr, however, says assistance of at least $1 billion is needed to stave off long-term hardship in Adelaide’s north, which he says is already suffering from "recessionary conditions".

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Arriving home late yesterday in the day after attending the memorial to memorial service for Nelson Mandela in South Africa, Prime Minister Tony Abbott said it was a "dark day" for manufacturing.

“It’s time for a candid and constructive conversation with the Australian people and it’s time for a considered and constructive response from government,” he said.

Vote now: Should more have been done to save Holden?

Opposition Leader Bill Shorten, who also went to South Africa, attacked the Government for not doing more to keep Holden’s doors open. and said it was guilty of a "lack of leadership".

"The job of an Australian government is not to get rid of Australian jobs," he said.

"This is the biggest car crash in Australia’s history."

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Asked whether he had regrets over anything that had happened to the car industry under his own Labor Party government, he said that his "only regret ... is that the Commonwealth has slashed half a billion out of the Automotive Transformation Scheme".

South Australian independent Senator Nick Xenophon believes the closure will eventually cost tens of thousands of jobs and economic modelling concurs with that view, putting economic losses in this state at $4 billion and job losses at 65,000 by 2020.

Vote now: Should more have been done to save Holden

Although stunned by the news, community leaders in the northern suburbs have vowed to overcome the economic disaster. But they stress they’ll need real help.

Glenn Docherty, the Mayor of Playford and Liberal candidate for the electorate of Newland, said the area would need both state and federal funding.

"Whenever we get news like this there’s always a shock factor, even if people thought that this could be the case," Mr Docherty said. He added: "But we will get through this."

More: Adelaide's northern suburbs 'will need $1bn'

Manufacturing Minister and sitting Newland MP Tom Kenyon said the Government would offer retraining. to workers. "The blokes in my electorate have the ability to deal with this," he said. "It's just going to be a really difficult time to go through."

The Premier - who had been touring a manufacturing plant in Adelaide’s west when Mr Devereux called him with the news - said he would ask Mr Abbott to unlock infrastructure projects awaiting final approval to stimulate the jobs market.

"We’ve had extensive work done on contingency plans," Mr Weatherill said.

He would not say how much money the State Government could commit to supporting retrenched workers but $50 million that South Australia was to pay Holden if the company continued to produce cars after 2016 would be directed towards that instead.

More: Holden telling only half the story

"There’s going to be very much more needed," Mr Weatherill said.

"The Federal Government will have a massive price to pay.

More: I told the truth, Devereux says

"We can’t afford to walk away from these workers. I will begin discussions about that with Tony Abbott tomorrow."

Mr Weatherill accused Mr Abbott and his Coalition ministers of "creating the most hostile possible environment for Holden to make its decision".

Analysis: Holden done in by booming economy

Last week, Mr Abbott said there would be no more assistance for the industry.

"This is the most significant economic decision the Abbott Government has made and it’s going to have catastrophic consequences for our country," ACTU secretary Dave Oliver said.

"The departure of Holden will sink the car industry in this country and the flow-on effects for jobs and manufacturing will be cataclysmic."

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Australian Manufacturing Workers’ Union state secretary John Camillo, who has been deeply involved in union negotiations over wage freezes and production changes to keep the carmaker open, said the union would now "look after the workers, examine packages and retraining options".

"This is not the end. I never take a backward step," he said.

THE HISTORY

In March last year, SA Premier Jay Weatherill and then-Prime Minister Julia Gillard annouced a $1 billion, 10-year "co-investment" package to secure the future of Holden, including $275 million from the taxpayer.

In April, Holden announced 400 of its then-1250 assembly-line jobs would by cut by August of this year.

The company was also promised more cash before the September election amid suggestions it needed as much as $500 million to commit to building two new model cars from 2016.

Following the election, the coalition reaffirmed its plans to cut $500 million from overall auto industry assistance and says no further cash is on the table for Holden.

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