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'No decision' from Holden

Holden managing director Mike Devereux rejects speculation that the company has already decided to leave Australia.

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The Abbott government has raised the already intense pressure on Holden, with the acting Prime Minister urging the car maker's boss to “immediately” say whether the company will stay in Australia.

The letter, sent by Warren Truss to Holden managing director Mike Devereux on Tuesday, escalates the government's demands for the management of General Motors Holden to put an end to uncertainty.

Acting Prime Minister Warren Truss told question time he has demanded an answer from Holden.

Acting Prime Minister Warren Truss told question time he has demanded an answer from Holden. Photo: Alex Ellinghausen

It comes as Mr Devereux denies a decision has been taken to leave Australia.

“It is the Australian government's view that GM Holden must immediately provide a clear explanation of its future intentions and explain what its plans are for its manufacturing operations,” Mr Truss writes in the letter.

“An immediate clarification of GM Holden's future plans is needed to end the uncertainty for Holden's workforce, its suppliers and the people of Australia.”

Senior cabinet ministers have been fuelling speculation about Holden's departure, telling journalists in off-the-record briefings that the car maker has already decided to leave Australia and “doesn't want to be saved”.

Mr Devereux has rejected the speculation and told a Productivity Commission inquiry on Tuesday that no decision had been made and the car maker still wanted to manufacture vehicles in Australia.

Industry Minister Ian Macfarlane is the only member the Abbott cabinet making a vocal case to increase government funding for Holden. A dominant group of MPs, known as economic "dries" and led by Treasurer Joe Hockey, are determined to cut off the funding for Holden and leave management to their own devices.

Asked in question time about Mr Devereux’s comment that the cost of losing the local car manufacturing industry would dwarf the cost of keeping it, Mr Hockey said: ‘‘There is no shortage of money that has been going to the motor manufacturing industry.’’

The Treasurer said $1.1 billion was given to the sector in 2011 - equating to about $48,000 per manufacturing worker - and another $1 billion had been put on the table.

‘‘There is a hell of a lot of industries in Australia that would love to get the assistance that the motor vehicle industry is getting,’’ Mr Hockey told Parliament.

Prime Minister Tony Abbott appears to have accepted that view, saying last week there would be “no more money” for Holden. He has so far ignored pressured from unions, Labor and the Victorian Liberal government, to restore the $500 million he cut from the previous government's automotive assistance fund.

But on Tuesday, the Victorian government attacked its federal Coalition counterpart for cutting $500 million in assistance to the car industry, saying Mr Abbott should reinstate the money.

Manufacturing Minister David Hodgett joined South Australia's attack on the federal government, saying it was not helpful when cabinet ministers were “speculating on the future of Holden”.

Asked whether the government should return the $500 million it was removing from the automotive fund, Mr Hodgett said, "That's what we're asking", adding that he would be asking the Prime Minister to fund the industry for another decade.

“Make no mistake,” Mr Hodgett said, “we will leave no stone unturned to advocate very, very strongly for continued Commonwealth assistance so that [Victoria's] auto industry can continue.

“We believe that Commonwealth assistance should continue over the next 10 years,” Mr Hodgett told Fairfax Media's Breaking Politics on Tuesday.

Asked later on Tuesday whether the Victorian government would be prepared to contribute more money to save Holden, Mr Hodgett told Sky News: "The short answer is of course we would."