Tells it like it is.
Holden wins taxpayer-funded aid deal
Holden wins taxpayer-funded aid deal
HOLDEN has secured a $275 million taxpayer assistance package, ensuring it will build two all-new cars in Australia in the second half of this decade.
The car maker has committed $1 billion under the co-investment deal.
GM Holden chairman Mike Devereux said the funding would secure the next generation of Holden cars.
"Co-investment of this kind is critical for our industry and helps Australia compete against other car making countries that protect their industries through tariffs and/or financial support," he said.
The federal government has contributed $215 million from the existing $5.4 billion New Car Plan, with the balance provided by South Australia and Victoria.
Julia Gillard said the deal would inject an estimated $4 billion into the Australian economy and support thousands of jobs across the industry.
"This is a strategic co-investment, this is not a handout," the Prime Minister said.
The federal and Victorian governments will also provide an additional $35 million to help auto components firms move into export markets.
Ms Gillard said if the government had failed to provide assistance to Holden, the company would have closed its Australian operations, in a "knock-out" blow to the manufacturing sector.
She said the business case factored in the Australian dollar continuing at around parity with the US dollar into the future.
Mr Devereaux said the impact of the looming carbon tax on vehicle production was also considered.
The partnership will see Holden making cars in Australia until at least 2022, retaining domestic manufacturing, design and engineering operations.
Holden said the two new Holden models would be produced in Elizabeth, in South Australia.
South Australian Premier Jay Weatherill said the car maker's future was vital to the state's manufacturing sector.
"The manufacturing industry must become and advanced manufacturing industry," he said.
"That's why it is essential that we invest in Holden's future and that's why Holden's future is essential to Australia's future."
Holden said it was conscious of the need to deliver a return on investment for Australian taxpayers over the 10-year life of the program.
Mr Devereux said the industry needed the investment to retain its ability to design, engineer and build cars.
"Co-investment of this kind is critical for our industry," he said.
"Australia does not compete on a level playing field and without co-investment this country would struggle to attract new capital investment.
"Be assured, this is a very sound investment and we are being very conservative."
The new vehicles will utilise new fuel-saving technologies and more efficient engines, transmissions and drive trains.
Mr Devereux said Australia would be part of the "global reality" of the car industry, working on developing new technologies that might not even be used in Australian cars.
"We will be much more tightly connected to GM's international operations," he said.
"Gone are the days when you can engineer a car for one country and hope for that to be economically feasible, so we'll be putting our engineering and design talent to work as they already are.
"We'll continue to work on global products in this country and, as Prime Minister Gillard said, be part of that new reality in the global industry."
Industry Minister Greg Combet said the shift to global vehicle platforms would apply pressure to Australia's car components industry, but it would also provide opportunities to become part of new global supply chains.
Without the investment, GM had warned it would leave Australia by 2016.
The federal and Victorian governments and Ford entered into a co-investment deal in January worth around $103 million, to keep the company's Melbourne plant open until at least 2016.
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Somebody, make me upset
Job done! The caged lion lives on, all be it on life support.
Why oh why must I chase the cat
I Believe
it's a good thing.
10 more years of an aussie built car....but by the sounds of it, the commodore locally made is soon going the way of the dodo.
the VF might be the last 'aussie made' big holden car, the future commodores will be rebadged chevs. oh well, at least all the chevy badge lovers will finally be doing something logical with their rebadging of cars.
Tells it like it is.
I wouldn't panic just yet. It's all in the definition of "Australian Made". More than likely when the life of the current Zeta platform is over we will get a heavily reworked body from whatever RWD that Caddilac or some other division is running at the time similar to every Commodore before the VE. The VE is as much Australian made and designed/engineered as any car since the LH Torana. Many claim the HQ but I'd argue that much of that car came from Detroit.Originally Posted by UFO
There is a chance of FWD but unless attitudes change drastically I doubt it. No large FWD, or even medium for that matter has done much more than mediocre sales in Australia. The problem is that the segment is shrinking but of what sales there are, the Commodore dominates for both large sedan, wagon and LWB limousine niches. As the rest of the world's economies improve (and they will - all be it slowly) the export opportunities will open again. By world standards, volumes will be small but that is more than enough to keep Elizabeth profitable, especially combined with the Cruze as a "filler" model.
Reaper
I'm a sceptic...
Good news!
I think it says something about the importance of the Automotive industry when all governments, Labor and liberal, sate and federal (and even with the Greens having one hand on the nations steering wheel) continue to support it. If we stopped making Holden/Ford/Toyota right now I believe we would head towards a recession very quickly and the flow on effects through the economy would be catastrophic.
10 years more of RWD commodores sounds good to me
Tells it like it is.
$250 mill sounds like a lot of money, probably because it is. In reality though we are talking about a $25mill investment each year to ensure not only the direct jobs at Holden but the 4 - 5x that amount the auto industry indirectly employs in Australia. Australian government investment is actually quite modest compared to most other car making nations.
Reaper
Bro it's a VW your Audi!
If the 1 billion invested back into the country is true, and they can build 2 cars here in that time sounds good.
Shit if we go back to opel platforms modified by holden im ok with that. The VE is great and basically the only true car made from the ground up here. But it's way late for its time, and petrol prices hurt it. If that was built back in 97 when the VT came out they would have sold 10,000 a month easy. But same as the 380 it was just out of its time with external pressure.
IF SILENCE IS WORTH $1 HERE HAVE $2
So do US tax payers get a discount on a new Holden now?? What's 1 more tax on a country that's 1 of the highest taxed countries in the world..
Somebody, make me upset
Modest per capita?
I see the point, I don't see the value
Dave
Tells it like it is.
It works out to be between $250 - $300 per car depending on their output levels. USA govco funding is near 10X that amount. Japan, Thailand and Korea are slightly less but still up there somewhere. Of the countries that don't have direct grants, they hide behind tariffs and other such artificial barriers. Thailand are particularly bad. They signed a FTA with Australia which means (in theory) cars can be exported between the countries without economic penalty. Shortly there after they slapped all cars over 2.5 litre capacity with an additional registration tax. This taxes every car made in Australia should it be exported to Thailand except for the Cruze (made in Thailand for other markets anyway).
I personally see it as a necessary evil.
Reaper
I live in the Northern suburbs, about half a km from the Holden factory. There are loads and loads of people who work at holden in my suburb. This is great news for them and for the area.
I guess one day in the future (who knows when) the plant will be so old and outdated it will disappear (sadly) but right now it is a South Australian landmark and like Reaper has been explaining, it provides thousands of jobs indirectly.
Beatus ille
Yep .......and lots of training for trades and engineering etc etc.and like Reaper has been explaining, it provides thousands of jobs indirectly
Then these skilled people can branch into or build other manufacturing ventures that may or may not be automotive and train even more up and coming young people.
Its the skilled workforce we need. From that everything else will follow.
Nil Bastardo Carborundum
Hi ReapI wouldn't panic just yet. It's all in the definition of "Australian Made". More than likely when the life of the current Zeta platform is over we will get a heavily reworked body from whatever RWD that Caddilac or some other division is running at the time similar to every Commodore before the VE. The VE is as much Australian made and designed/engineered as any car since the LH Torana. Many claim the HQ but I'd argue that much of that car came from Detroit.
There is a chance of FWD but unless attitudes change drastically I doubt it. No large FWD, or even medium for that matter has done much more than mediocre sales in Australia. The problem is that the segment is shrinking but of what sales there are, the Commodore dominates for both large sedan, wagon and LWB limousine niches. As the rest of the world's economies improve (and they will - all be it slowly) the export opportunities will open again. By world standards, volumes will be small but that is more than enough to keep Elizabeth profitable, especially combined with the Cruze as a "filler" model.
Reaper
The Cruze is a "filler model"? It now outsells the Commodore and that is likely to be the trend from now on, with perhaps the odd months where the situation is reversed. More likely is that the Cruze will dominate production numbers with the VE short and long-wheelbase models adding their quota, but even if the world economy does improve, the general trend is towards Cruze sized cars and away from larger vehicles. Exports are not likely to boost production to the point where the VE/VF becomes the predominent model again. Additional body styles such as the wagon in the Cruze will help to boost its appeal too. Further, where to for the Malibu? Its closeness in size to the VE will see further erosion of VE/VF sales figures.
My tip for Holden's line up at the end of the VF model (around 2018) is Barina, Cruze, Malibu, with only the Cruze being locally made, the others will be CKD. No replacement for VF or long wheelbase models. And with these predictions, I would love to be wrong.
Somebody, make me upset
Vic car parts maker stands down 126
More than 120 automotive workers have been stood down without pay by a Melbourne car parts manufacturer which has been placed into receivership.
Coburg-based APV Automotive Components says it cannot afford to pay its 126 staff, citing a sharp drop in orders for the parts it makes for Holden, Toyota and Ford.
Receivers took control of the business on Tuesday after talks to reach agreements on a voluntary redundancy program and a new enterprise agreement failed.
Receiver Stephen Longley said the Coburg plant was on a scheduled shutdown this week.
At the same time, urgent discussions would take place with customers, employees, unions and suppliers to try to make the business viable so workers could return as planned next Monday.
"In the meantime, it has been necessary for the receivers to stand down without pay the company's employees as there are not sufficient funds for us to meet payroll or other operating costs," Mr Longley said.
To survive, the business would likely need to cut about 20 per cent of its workforce and secure profitable, long-term deals with its customers, he said.
The company, established in 1946, supplies Australia's three major car companies with fuel fillers, rear suspension struts and steel and fabricated parts.
Mr Longley said he was conscious of APV's important position in the nation's car-making supply chain and vowed receivers would also work proactively with stakeholders to avoid disruption to the industry.
"We can't commit to the workforce right now... there is a lot of work that needs to be done this week," he said.
The company's struggles were a result of the automotive industry's overall decline since the global financial crisis, with the volumes of cars produced in Australia having plunged in recent years, Mr Longley said.
Victorian Opposition Leader Daniel Andrews said the news served as another reminder why Premier Ted Baillieu needed a plan to create and secure jobs.
"We've got real challenges right across the Victorian economy and this is another example of why Mr Baillieu needs to start working to keep Victorians in work," he told reporters.
"For these 126 and for thousands of others, the premier just can't keep going on burying his head in the sand. There is a jobs crisis and he needs to act."
Receivers will hold a meeting with APV staff at the company's premises on Wednesday.
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Money well spent then!
If co-funding is designed to maintain job security and create additional positions for the Vehicle Manufacturing Sector. Why is it not working.
Its time we realise this, and prepare for the inevitable, manufacturing in Australia must remain competitive on their own merit and pull their finger out.
Subsidised funding to companies which generate Billions in profit, threaten to windup operations locally, yet the support companies are the ones that are closing down.
GMH, Ford, & Toyota will have no problem sourcing these parts internationally or locally at the same rate but more likely cheaper if APV can't sort out their mess.
Time for a rethink on this position, if hundreds of millions of dollars on what seems to be an annually basis, can not support and retain jobs in car manufacturing then the writing is well and truly on the wall for everyone to see.
Its a disgrace!
Each time an announcement is made in regards to funding all the workers breath a collective sigh of relief. Now, surely they all know, its just smoke and mirrors. The biggest illusion, we all believe to be true. "Job security"
Tells it like it is.
In this particular case it's very clear. The problem is naivety and/or greed on the part of the local AMWU shop stewards and the workers.
1/ The company was down around 25 - 30% on order volumes from their customers - Ford/Holden/Toyota.
2/ The company set to reduce it's workforce from 126 down to just above 100. The company then negotiated with the AMWU on a redundancy package for the workers in question. The company also warned that the company would fail unless the restructure occurred.
3/ AMWU recommended the company offer to the workers but the local AMWU Shop stewards recommended against the offer which the workers follow, voting down the offer.
4/ Receivers are appointed before the restart after the Easter shutdown.
Really, what we have here is an epic own goal from the dumarse workers. Socialistic "job for everybody" is just plain wishful thinking. Really, in times of contraction like now, when companies look to restructure it's often like being on a lifeboat. Say there are 100 workers but only places on a lifeboat for 90 (or it sinks). What do you do? Save 90 or drown 100?
Actually, building cars is not an overly profitable enterprise. In just over 100 years of Automotive history, on average it's returns have been modest at best, with many long patches of massive losses. There were times of big profits too but overall it's not huge. In comparison with the rest of the world, overall our contribution to car manufacturing per car in Australia is one of the lowest.Its time we realise this, and prepare for the inevitable, manufacturing in Australia must remain competitive on their own merit and pull their finger out.
Subsidised funding to companies which generate Billions in profit, threaten to windup operations locally, yet the support companies are the ones that are closing down.
GMH, Ford, & Toyota will have no problem sourcing these parts internationally or locally at the same rate but more likely cheaper if APV can't sort out their mess.
Time for a rethink on this position, if hundreds of millions of dollars on what seems to be an annually basis, can not support and retain jobs in car manufacturing then the writing is well and truly on the wall for everyone to see.
As I mentioned above - it's a workers own goal this time.Each time an announcement is made in regards to funding all the workers breath a collective sigh of relief. Now, surely they all know, its just smoke and mirrors. The biggest illusion, we all believe to be true. "Job security"
Reaper
Somebody, make me upset
It's a crazy game they are in Reaper, time will tell who has skills to keep on playing.
Banned
And that right there really is the bottom line. No way ANYONE would want to be in Government the day Holden operations cease to exist in Australia!
Somebody, make me upset
How long can they keep on playing the same song and expect everybody to continue dancing.
As for the Government, they have let very large companies fail before. Why is Auto so much different?
I'm not 100% across the issues facing the manufacturing industries( I'm not in it), but I believe the same opportunities and obstacles are present for all companies involved.
It is not the biggest employer, even with tier 2 & 3 combined. It's not the biggest contributor to GDP. I really don't understand the situation to reconcile in my mind, the continued assistance packages and support.
Form my POV, the threat of closure opens the government wallets, it's a walk to the edge of failure every few years, they then present their case to the Government of the day, and get a bit of coin.
Everything turns to roses, people are employed, cars being made, but they all forget sustainability along the way. So in a few more years they are back at the table explaining that the cash is gone and voting family's are at risk of not eating if nothing is done.
Give them as much money as they need I say, so long as it keeps people in jobs. Attach more strings if they have to. Self regulation is not really working.
Dave
I'm a sceptic...
Thought I'd keep this discussion going..
Is the Holden profit our loss? | carsguide.com.au
Is the Holden Profit Our Loss?
I had a weep at Holden's "news'' announcing a "profit'' of about $90 million.
Why? Because it’s roughly the same amount us taxpayers handed over to Holden after they held the employment gun to our head.
It's doubly rude when you consider GM in the US last week announced a massive first quarter pre-tax profit of $1.7 billion. Multiply that by four and it's close to seven billion in one year. And they are still asking for handouts from the Australian Government -- for which read: the Australian taxpayers?
Holden will go all Aussie pride and say it's about maintaining a manufacturing industry in this country, maintaining specialised skills and "the multiplier effect''. But many people would argue that money could be better spent on new and high technology industries, health and education rather than on uneconomically making cars.
Then there's the national broadband network - a worthy candidate for extra funding if ever there was one. One wonders how many other local industries would get generous handouts if they went bleating to the government every time there was a blip in their profit line. Perhaps Holden has photographs... we'd like to see them.
Bro it's a VW your Audi!
I'm thinking someone had a slow day at work when they wrote that..
Yes please spend the money elsewhere and let the car industry die so car writers like this find a new job field.
IF SILENCE IS WORTH $1 HERE HAVE $2
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