Industry consoled by government promise

News that the federal government had binned the Green Car Innovation Fund brought a swift response from the automotive industry.

Who can say how much behind-the-scenes brawling went on between the industry and Innovation Minister Senator Kim Carr after Prime Minister Julia Gillard announced the Green Car Innovation fund would be shelved? The government put an end to the Fund, along with numerous other schemes to pay some of the cost to restore infrastructure in Queensland after the devastating floods last month. Ironically, many of those axed schemes were environmentally motivated.

Whatever words might have been exchanged, both the federal government and the Federal Chamber of Automotive Industries (FCAI) have issued statements declaring their mutual understanding of each other's position. Representing the local industry, the FCAI is "reassured" that the government won't dilute industry support further.

The FCAI's Chief Executive, Andrew McKellar (pictured) and other industry members met with the Prime Minister and the Senator earlier in the week to stress that the automotive industry provides massive benefit to the local economy and must continue to have the support of the federal government.

"It was good to meet with the Prime Minister and have the opportunity to reinforce the commitments the Government had previously made to the industry as well as highlight the need for certainty in the future", McKellar was quoted as saying in the FCAI's press release.

"Public private partnerships underpin the industry in every automotive manufacturing economy and this co-investment has developed an industry that directly employs more than 50,000 people with the capability to design and engineer world-class vehicles for Australia and global markets."

"The vehicle manufacturers and component suppliers can be reassured by the confirmation from the Australian Government that no further policy changes will be made.

"Australia is competing with dozens of other vehicle manufacturing economies and the guarantee provided by the Prime Minister gives the industry a basis to work to continue to attract new investment."

For their part, Senator Carr and Prime Minister Gillard also issued a statement. In the release, Senator Carr threw his support behind the on-going 'New Car Plan for a Greener Future'.

"What we are making is a commitment to all other elements of the New Car Plan," he was quoted as saying in the release. "That includes the Automotive Transformation Scheme, the Automotive Industrial Structural Adjustment Program, the Automotive Supply Chain Program, the Automotive Market Access Program and the Automotive Industry Innovation Council."

"This underwrites high-skilled, high-tech manufacturing jobs and a more productive economy. The New Car Plan will help attract and retain international investment and foster continuous innovation within the industry."

Just the day before the meeting with the Senator and the PM, the FCAI also took a swing at the opposition in what appears to have been a warm-up for the showdown with government. Responding to the opposition's plan to reduce funding for the Automotive Transformation Scheme, the FCAI was nothing if not forthright.

"This is an ill-advised proposal and would severely damage the local vehicle manufacturing industry," McKellar said.

"To cut funding from the Automotive Transformation Scheme would endanger existing and planned investment projects and potentially put thousands of jobs at risk. Other countries are bending over backwards to attract new automotive investment and it is essential that Australia must continue to strive to retain a reputation as an attractive place to do business in."

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