General Motors Invests $1 Billion In Australian Division, Government Contributes $285 Million
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.
More by Derek Kreindler
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Australians are generally really proud of their Holden brand so it's great to see GM getting behind it. That is after all, about the only way GM will succeed in Australia. Now I wish that GM would put more effort into Opel.
Australian car production is an anachronism of a time just passed. The Australians can now live by selling their copious natural resources to a rapacious Chinese and Southeast Asian market. They are essentially the same as a Gulf oil producing state. There is no benefit to paying extremely high Australian wages in order to produce Australian domestic market vehicles that can't be exported anywhere because of the high costs of production. This announcement is a time saving measure before the winding down of the business commences. And for everyone calling for these Australicars to be imported here, just stop it. 10 people want large RWD cars, and they rest of us are the ones not buying the 300, Charger and G8 when it was out.
Most of the gearheads who "swear that they'll buy a new RWD big car" complain about new car prices. So, end up waiting for a beat up used one. Then whine when sales tank, saying 'they have a moral obligaton to keep making my favorite car'!. G8 came here, fan boys said 'whoah, too much $', waited for huge rebates, and then complain when Pontiac was dropped. Did they forget GM went bankrupt from all the giveaways? Or, the 'bring back old style cars, Detroit would dominate market!' New Dodge Challenger comes, and all the old timers who wanted one got it first year, but now?
Sounds like a better deal than Tennessee made with VW. They paid $577 million for a $1 billion plant.