Thousands of Holden workers are expecting to find out their fate on Tuesday morning, many weeks after their US head office in Detroit decided to cut them adrift.
'Cut the crap and start governing'
Cross bench Senators John Madigan and Nick Xenophon, plus lower house MP Andrew Wilkie, urge Tony Abbott to stop Holden leaving Australia. Nine news.
Holden managing director Mike Devereux appears before the Productivity Commission on Tuesday and many within the car industry believe he will use the occasion to tell them that time has run out for the motoring giant.
If Holden pulls out, Toyota Australia, which employs 4200 people directly, is likely to follow suit because component suppliers for both companies would become unviable.
It comes as a government figure revealed there was no support for extra assistance for the car manufacturing sector within the federal government with just one minister out of 19, Industry Minister Ian Macfarlane, arguing the case to keep the quintessentially Australian carmaker afloat.
A Holden company source said that local management had received a stay of execution while the attitude of the newly elected Coalition government had become clearer. That time has now passed and an announcement of the company's intention to depart could come as early as Tuesday.
The Productivity Commission is due to make an interim report on car assistance before Christmas and a final report in the first quarter of 2014.
But that timetable, and the clearly expressed attitude of the government, have apparently cemented the company's resolve to pull the pin on the Australian manufacturing plants at Elizabeth in South Australia and Fishermans Bend in Victoria.
The closure has potentially devastating consequences for thousands of workers directly employed by Holden and could send the economies of both states, where the bulk of a combined 50,000 jobs reliant on the automotive industry are located, tumbling into effective recession.
The opposition went on the attack over the closure on Monday dedicating nearly all of its questions to the government on what was was being done to protect the sector and save local jobs.
In reply, Treasurer Joe Hockey offered workers no reason for comfort heading into Christmas.
‘‘The future of the car industry is in the hands of the car industry, and it’s in the hands of the car industry in the same way that it was under Labor, because it was February 2008, from memory, when Mitsubishi closed when Labor was in government,’’ he said.
Fairfax Media understands Toyota has been watching the situation unfold with increasing trepidation, aware that its vast network of suppliers would collapse without the Holden orders.
While officially it is playing its cards close to its chest, industry experts say it would have no choice but to fold its tent, bringing an end to an industry that has employed hundreds of thousands of Australians over decades, and has formed the bedrock of a wider engineering and manufacturing skills base of the economy.
While a precise figure has not been released, it is understood the two remaining manufacturers, Holden and Toyota, wanted Canberra to commit to maintain an extra $300 million per year of assistance split roughly 50/50.
Proponents of the subsidy – from unions to the opposition and the carmakers themselves – argue that every car available in Australia at present was built using some government subsidy. But it appears the argument for a local car industry has already been lost, with GM deciding to rationalise its operations in China and South Korea – where its Daewoo brand has greater growth potential.
A report in Monday’s Wall Street Journal claimed GM executives had decided to close the Australian plants in South Australia and Victoria and cut production in South Korea by 20 per cent as the US car giant repositions for life after government investment – made necessary during the global financial crisis as both GM and Chrysler teetered on the edge of bankruptcy.