Holden could stop making cars here before 2017?

[BlueOvalPrint]

Holden boss says proposed cuts to government support could force an early shutdown for local manufacturing.

Holden boss Gerry Dorizas (right) has warned proposed cuts to the industry support could bring the local car industry to an early shutdown.
Holden has warned the local car industry could crash-out early as a result of proposed cuts to the federal government's funding scheme.

The company's managing director Gerry Dorizas delivered the bleak assessment on Tuesday, fearing that underlying component suppliers – not car manufacturers – were most vulnerable without the additional $500 worth of funding originally allocated by the Labor government under the Automotive Transformation Scheme.

“Suppliers have invested based on the ATS to break even. They needed this kind of subsidy and at this particular time they’re in dire straits,” Dorizas said.

“This is the reason why we’re actually very focussed on the supplier base because if that happens then nobody will be able produce cars, especially for the parts that are specific to Australia.”

All three car makers currently building vehicles in Australia - Ford, Toyota and Holden -all announced last year that local manufacturing was no longer a viable business.

Ford has committed to keep its Broadmeadows and Geelong factories open until at least October 2016, and is set to release fresh updates to its Falcon and Territory models in the coming months to take the company through to the end.

Holden and Toyota have said they will not close their operations in South Australia and Victoria until 2017.

When asked if any of the proposed changes to federal assistance for the local manufacturing industry. a spokesperson for Federal Industry minister, Ian McFarlane, confirmed that component suppliers could apply for a slice of the $20million Automotive Diversification Fund - one element of the ATS.

"The Government is working closely with the automotive and manufacturing sectors - including the parts supply industry - to address the changes occurring in Australian industry," the spokesperson said in a statement to Fairfax Media.

"That includes focussing on the immediate issues for workers and families that are affected by the end of domestic car manufacturing, as well as the broader issues to help Australian industry transition to new markets and create new jobs.

"The $20 million Automotive Diversification Programme is open for applications to assist businesses in the automotive supply chain move into new markets.

"The government’s National Industry Investment and Competitiveness Agenda is considering the full range of issues that impact on the global competitiveness of Australian businesses and Australian industry, as well as key issues that will shape the future of Australian industry, particularly as it transitions from a traditional manufacturing base to developing new jobs and new opportunities in high value-added manufacturing."

The government proposed the cuts to the ATS when it delivered its controversial budget measure in May. The Labor Party, Greens, Independents and Palmer United Palmer have each promised to block the cuts in the Senate.

“As far as the Automotive Transformation Scheme goes and making sure there is a transitional period, that is something we are working on at the moment,” Independent Senator, Ricky Muir, who represents the Australian Motoring Enthusiasts Party, told Drive today.

“We are discussing that with the government, the cross benchers and opposition and speaking to the industry. It is something we are very interested in supporting.”

The Federation of Automotive Parts Manufacturers’ (FAPM) chief executive, Richard Reilly, said the proposed cuts could impact integral parts suppliers earlier than first thought. He said the structure of the cuts mean that component suppliers could begin feeling the pain as early as next year, with $200 million worth of cuts in 2015, $150 million in 2016 and $150 million in 2017.

“We’ve being arguing against the proposed $500 worth of cuts for some time,” Reilly said.

“The proposed 200 million in 2015 is an enormous challenge to take in one hit and if anything, it needs to be phased better. It doesn’t make much sense. We’re trying to sustain as many component manufacturers as we can. Why pull the funding while the manufacturers are still active in Australia?”

Holden has vowed to continue producing both is Commodore and Cruze in Australia until 2017, as first promised, while Ford and Toyota have remained consistent with their respective October 2016 and 2017 end dates. Asked whether the industry could survive without key suppliers, Dorizas hoped “logic would prevail”.

“At this particular time, we work very close with the suppliers. We don’t foresee a problem [in closing early] but you never know – there’s always a risk,” he said.

“That’s the reason why we would like to see the Federal government act. I think the whole industry, or everybody involved - especially the suppliers - would like to see the ATS cuts reversed.”

Drive has contacted federal Industry Minister, Ian McFarlane, for comment.

http://www.drive.com.au/motor-news/a...13-103lr3.html

Similar story at:
http://www.news.com.au/technology/de...-1227022876801

[Pedro]

A last gasp attempt by Holden to put a gun at the head of the Government and pad their losses.

[GASWAGON]

I predicted this long ago...... The whole show could fall well before the targeted dates.....It all depends on governement assistence now and shows just how relient the industry is on that assistence.

[mrghia]

if they stopped recalling there cars they might have more money

[Struggo]

The end is near ;-(

[Nova 8]

It's gonna be interesting to see how this all plays out, it's gonna take years to feel the full effect. I already know what govco are gonna do, blame the other guys...

[BHDOGS]

Abott is an idiot and is only willing to give stupid amounts of money for school chaplins and vouchers for married people you know christian values and that bull**** as for people with jobs **** em is there mentality.

[Nova 8]

It's ok cause he plans to axe most of the dole too, so those losing their jobs won't be entitled to anything anyway so it won't impact his budget.

[MethodX]

Originally Posted by mrghia

if they stopped recalling there cars they might have more money

And they will still sell more than the Falcon...

[DanielXR8]

Originally Posted by Pedro

A last gasp attempt by Holden to put a gun at the head of the Government and pad their losses.

Or a last gasp attempt by GM Holden to get this government to honour the commitments made to the auto industry by the last. Something that was the standard policy of federal governments on transition for such matters since Federation of the States in 1901.

Sure incoming governments uses to make a lot of noise and play around on the edges, but industry wide commitments weren't just thrown out because they didn't fit the new governments party ideology. Apparently now they do. Don't worry about honouring old commitments and transitioning to new. Just dishonour them and throw the bloody things out, if you didn't think of them.

I'm sure big business wont see the potential for back flips from Federal governments every three years as a reason not to invest in Australia in the future. They will just be fine with investing millions or billions on business that will be subject to the political idealogical whim of the government of the day.

What a wonderful precedent and international reputation our new government has earned us for future investment.

[DanielXR8]

Originally Posted by mrghia

if they stopped recalling there cars they might have more money

Very true. Just ignore the cars design faults, like Ford Australia do. Save heaps of money and you don't have to worry about returning customers in the long term.

[johnydep]

Originally Posted by mrghia

if they stopped recalling there cars they might have more money

After experiencing the Ford & Holden recall, I am very impressed with the Holden process.

My Territory had issues that involved safety, none where recalled until it was too late. One caused tyre scrub & was not fixed until I spent months calling & emailing Ford.

Another caused loss of brakes when my wife was driving & a brake line burst. Ford told me that they had no issues with brake lines, so I replaced them all & paid for it.2 months later I received a recall notice.

And the famous one - lower front ball joint. Again I replaced the parts paying out of my pocket, only to get a recall several months later.

All discussion with Ford & dealership left me very disappointed with the company.

My experience with Holden has been very different. The recalls have been for minor problems, the letters have been great, the fixes prompt & the after purchase satisfaction high.

Buying a new car is a big cost, the sale should not be the end of the transaction. Keeping customers happy should always be the priority, this ensures repeat business & recommendations.

Having a great product is not enough.

[timeout]

Whoever cannot see this was the plan all along needs to read between the lines.

[mik]

Originally Posted by Nova 8

It's gonna be interesting to see how this all plays out, it's gonna take years to feel the full effect. I already know what govco are gonna do, blame the other guys...

Well if the shoe fits.

[BHDOGS]

Lol guy makes a joke about Holden recalls and the hidden Holden lovers line up like drones hahaha hillarious

[Wretched]

Just shut them down now, government can save the money and invest into other industries that would serve us well into the future.
I am really disappointed that AU hasn't looked at investing into the alternate energies for future transportation. Japan and to lesser extent the US have jumped the gun and begun investing into Hydrogen.
Australia is lagging so far behind the rest of the world in so many areas and it will come back to bite us in the long term.

[johnydep]

Originally Posted by BHDOGS

Lol guy makes a joke about Holden recalls and the hidden Holden lovers line up like drones hahaha hillarious

At the time, I did wish that it was a joke. So do many others. Maybe the poor after sales service has something to do with the low sales figures

[browser351]

Yep - good old GM-H - cry poor to the government for more funds and on the other hand announce they are going to keep pouring millions into v8 supercars. Hypocrites

[Nikked]

^^^Yet many a ford supporter wants DJR to recive Ford funds to stop Dick going broke...go figure...

[vztrt]

Originally Posted by Nikked

^^^Yet many a ford supporter wants DJR to recive Ford funds to stop Dick going broke...go figure...

Yet ford arn't publicly crying that they don't have the money to close by Oct 2016.

[Pedro]

Originally Posted by DanielXR8

Or a last gasp attempt by GM Holden to get this government to honour the commitments made to the auto industry by the last. Something that was the standard policy of federal governments on transition for such matters since Federation of the States in 1901.

Sure incoming governments uses to make a lot of noise and play around on the edges, but industry wide commitments weren't just thrown out because they didn't fit the new governments party ideology. Apparently now they do. Don't worry about honouring old commitments and transitioning to new. Just dishonour them and throw the bloody things out, if you didn't think of them.

I'm sure big business wont see the potential for back flips from Federal governments every three years as a reason not to invest in Australia in the future. They will just be fine with investing millions or billions on business that will be subject to the political idealogical whim of the government of the day.

What a wonderful precedent and international reputation our new government has earned us for future investment.

While you're wringing your hands about the current government back flips I guess you've forgotten "there will be no carbon tax under my government" by the previous incumbents. Take the time to read GM's balance sheet and then ask yourself why isn't the parent company throwing dead money at Holden?
http://www.gm.com/company/investors/...investors.html

[danzvtil]

“Suppliers have invested based on the ATS to break even. "
^^^^^
This is the key to this whole mess, while it might give us all the warm fuzzies to have certain parts manufacturers here, if they cant reliably make money year in year out, then they will cease to exist.