Holden's call for government funding stands

The boss of General Motors Holden Mike Devereux has repeated calls for government assistance to secure local car making – even though executives at head office in Detroit are “optimistic” about the company’s future.

Devereux told the Australian Financial Review last week that Holden’s local manufacturing operations were being reviewed after the Green Car Innovation Fund was cut short by nine years and $800 million.

“It certainly makes investment decisions for [new models] five or six years from now quite a bit different in the minds of my managers in Detroit or Shanghai,” Devereux told the paper.

Holden, Ford and Toyota received more than $400 million from the fund since 2009 to go towards local production of fuel-efficient cars.

However the $1.3 billion fund that was to run to 2020 was axed in January of this year to help fund reconstruction efforts following the cyclones and floods that ravaged Australia over summer.

A day after Devereux’s comments in the financial press hit the stands locally last week, Industry Minister, Senator Kim Carr, was in Detroit meeting with General Motors executives.

Devereux told motoring.com.au the timing was “purely coincidental”.

“I didn’t actually remember that he was in the States,” he said. “But he does this every year. This is not a trip that’s been made because there’s something going on. Kim regularly travels all around the world to visit all major auto-producing nations; and it’s a smart way to be.”

Following the meeting in Detroit, Senator Carr issued a statement quoting General Motors’ vice president for Global Public Policy, Robert Ferguson, as saying: “Holden and our Australian facilities are vitally important to General Motors. We are optimistic about the Australian marketplace and the products produced there.

“The research and engineering done in Australia is benefitting the company worldwide. Sales of the Camaro - developed in Australia - are robust. We're also optimistic about the new police cruiser, the Caprice, which is being introduced to the Police Departments in America's markets.”

At the Melbourne motor show Devereux told motoring.com.au: “My colleagues in Detroit and in Shanghai understand how important what we do here is to the brand in this country. That’s really what we’re talking about. We get the fact that we’re Australian because we make things here, and we’ve been part of the fabric of the country for a long time. So GM strategically, we want to do things in this country the way we’re doing them today.

“[But] countries that have low tariff barriers have to have a business plan to attract foreign direct investment. That is a fact of life in the global auto business.”

Devereux, who is also president of the Federal Chamber of Automotive Industries, said “intelligently crafted” financial assistance programs were crucial to the survival of local car making. Under the green-car fund, Holden contributed $3 for every $1 from the taxpayer.

“There is no question that without co-investment, the business case for making things in Australia is quite a bit different than if you have co-investment. And there is no question that with the cancellation of $800 million worth of green car funding, that General Motors has to take a look at what it is we do here and what the return on investment for what we do here is.

“My job is to make that case with the government of this country, and to make the case for future massive investments with my managers in Detroit.”

Devereux said the car industry was no longer going to “sit on the sidelines” when it came to lobbying governments.

“Other industries are quite vocal,” he said. “We have done our work quietly, and we continue to do our work very respectfully to that process, because it’s a difficult one.”

When asked what would happen if there were a change of government, Devereux said: “The first thing that we need to do, as an industry, is to make everybody in the political debate, on both sides of [government], aware of our product development cycles and how long in advance of investment decisions we actually have to make that decision. And I’m not certain that before this week, everybody understood that.”

Devereux has met with Prime Minister Julia Gillard three times in as many months, but has also met with representatives from the Federal opposition.

“I meet with Mr [Opposition Leader Tony] Abbott and his Minister, Sophie Mirabella, who is the Shadow Minister. I meet with Kim Carr, I meet with Mark Ferguson, I meet with everybody.”

He said the Federal funding issue had come to a head as Holden will need to decide on future production of the Commodore and Cruze (pictured) in the next 12 to 18 months.

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