Stefan Jacoby, head of international operations at General Motors, has declared that the decision to shut down local manufacturing of Holdens is ‘the right thing for Australia’ in Detroit overnight.
Quoting Australia’s embrace of free trade agreements, free from protections for the Australian automotive industry, Jacoby took the step of taking personal responsibility for the final decision to close Holden’s Elizabeth and Port Melbourne plants within the next three years.
The pressures of Australia’s free trade agreements on Holden, Ford and Toyota are real – merely weeks after the signing of the Japan-Australia FTA, a trove of Japanese manufacturers have released significant price cuts that make their vehicles more attractive than local options.
With high labour costs and lack of an appetite for the mass-scale exporting of Australian vehicles, General Motors can no longer justify the massive expenses of maintaining unique vehicle production in Australia.
Jacoby is clear that this arrangement is no longer viable at a leaner GM: ‘To maintain an industry which is in total a bit more than a million [new car sales], and we have 10 per cent market share…so that’s a total volume of about 50,000 to 60,000 vehicles – you cannot justify any local manufacturing.’
General Motors, along with other international firms pursuing local manufacturing, received hundreds of millions of dollars of co-investment from the Australian taxpayer – money never returned to the Treasury. Despite this funding, the structural labour and economic issues relating to Australian manufacturing existing within a nation embracing globalisation meant car manufacturing has been a prolific casualty – a death sentence now irreversible.
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