General Motors announced a $1 billion investment in their Australian operations, along with a contribution of $285 million by the Australian government at the state and federal levels.
Prime Minister Julia Gillard said that they are committed to keeping Holden’s plants running until 2022. Ford and Holden’s Australian divisions are all cutting jobs amid a declining auto industry in Australia. GM cut 140 jobs from its Adelaide plant, while Toyota plans on cutting 350 jobs in Australia. The funding is expected to secure roughly 12,000 jobs at two GM plants while also securing thousands of supplier jobs.
Australia produced 400,000 cars in 2004, but in 2010 it produced just 250,000. The Australian government has been eager to help the auto industry since Mitsubishi shut down their Australian operations in 2008. Analysts have pegged Australia’s government funding to the industry at about $500 million per year since 2001, and the government is slated to continue the subsidies until 2020. Opposition parties have accused the industry of being totally reliant on government assistance, and some feel that a perpetual appetite for taxpayer funds, especially for an industry that produces increasingly irrelevant vehicles (anecdotal evidence suggests that most Commodores, Falcons etc are bought by government and private fleets) and exports little is becoming unsustainable. The Mazda3 replaced the venerable Holden Commodore as Australia’s best selling car in 2011, with the Holden Cruze nipping at its heels in 2012.