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GM to stop making cars in Australia by end 2017
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General Motors Co said yesterday that it will stop making cars and engines in Australia by the end of 2017, with nearly 2,900 jobs to be lost, because of high production costs and competition.
The decision could spell the end of car manufacturing in Australia as the industry will be too small for supporting businesses such as parts makers to remain economic. Toyota Motor Corp announced it is reassessing its future in Australia.
A union said 50,000 jobs in the auto parts industry are also in jeopardy.
GM’s Australian subsidiary Holden once dominated Australian auto sales, but lost market share to imported cars. Ford Motor Co, once Holden’s major rival in Australia, said in May that it was ending production in the country in 2016. Toyota is the only other auto manufacturer in Australia.
GM’s announcement has been anticipated for months. The Australian government has been under mounting political pressure to offer increased subsidies to the Detroit-based company to keep it manufacturing in Australia for the sake of the auto parts industry.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the industry faces in the country including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” GM’s CEO Dan Akerson said.
Holden, which has made cars in Australia for 65 years, would become a sales company, he said.
GM’s Australia chairman Mike Devereux said the priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.
“Building cars in this country is just not sustainable,” Devereux said.
Industry Minister Ian Macfarlane said he was disappointed that GM had made its decision before an inquiry had completed an analysis of government support of the auto industry.
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