Holden seeks $300million to build two extra production lines in Adelaide

[Brazen]

Potentially big investment on top of the Cruze line added last year. Interesting to see how it goes, they are still profitable which helps their cause a bit with Detroit and the government. Exports are out and domestic production is in. Im betting Toyota will also be seeking money for Corolla or Rav4 soon.

http://www.news.com.au/business/m-mo...-1226282123276

$300m more from taxpayers to save car jobs Save this story to read laterby: By Neil Wilson
From: Herald Sun
February 27, 2012 12:00AM

HOLDEN says taxpayers will have to kick in another $300 million to save jobs.
The car maker has indicated the Federal Government will have to put in more cash on top of its co-investment on the Cruze model to ensure its Detroit headquarters does not send future production offshore.

The car maker's Australian chief, Mike Devereaux, made it plain yesterday that other governments were prepared to enter similar agreements with parent General Motors.

He said Australia must be competitive if the car maker was to keep producing models.

Mr Devereaux said Holden would like to put two extra production lines into its Adelaide plant by 2020 in addition to its present line for the Cruze, which had a $150 million Federal Government contribution.


The Holden chief told the ABC TV's Inside Business that $300 million was closer to the range that the company would require than the $100 million speculated.

He said the multiplier effect of five support jobs for every GM job made it obvious why "every country in the world is engaged I think in a competition" to lure car manufacture.

"A lot of people wish that the world was flat and that everybody played by the same rules but countries aggressively compete for what Australia has," he said.

Mr Devereaux said Holden remained profitable but its costs were more in line with General Motors plants in the US than in China or Thailand.

The high Australian dollar severely eroded export potential and meant its business had to remain domestic-focused.

Mr Devereaux stressed the British Government had just doubled its co-investment fund for general industry to 2.4 billion, attracting 170 applications from companies including BMW and Nissan.

"So very smart policies in the UK; we think that not just auto but broad-based manufacturing should have similar policies in this country," he said.

He said GM deployed 10 per cent of its revenue on both engineering and capital investment.

"As that capital is deployed around the world, we try to deploy it in a way that returns the best return to our shareholders," he said.

[Smoke Pursuit]

Let them go..... The government does not give the rest of us funding to continue on business, so why should these turkeys keep putting their hands out... Government would be better of spending 300 million in recruiting all the employees elsewhere.

[Dave_Obsession]

Saw part of his interview last night...was refreshing to see somebody giving frank and no-nonsense answers. Mind you I don't think anything of what he said was exactly ground-breaking stuff...

No doubt the government will cough up the dough as well eventually...

[Dave_Obsession]

Originally Posted by DASH GT

Let them go..... The government does not give the rest of us funding to continue on business, so why should these turkeys keep putting their hands out...

"He said the multiplier effect of five support jobs for every GM job" - This is why...

And from their point of view, if you don't ask you won't receive...they've made it plainly clear that they're playing countries against each other to see who will give them the most money to make cars...I don't think Australia has a choice but to continue to help fund their operations...bearing in mind that the funds are tied to certain goals that must be reached by the manufacturer at certain times...

[Falcman0o7]

God holden are pathetic.

[Brazen]

Originally Posted by DASH GT

Let them go..... The government does not give the rest of us funding to continue on business, so why should these turkeys keep putting their hands out... Government would be better of spending 300 million in recruiting all the employees elsewhere.

If this was money to help subsidise Commodore production, then I would agree as it doesnt help out the rest of the industry. However if this is to help create more volume and build more cars then this helps out the entire supplier and ancillary industries. In the end $300million is chicken feed for the Australian government, I assume GM would be putting in hundreds of millions of dollars and I also assume the investment by the government would be near enough revenue neutral (ie the multiplier effect which helps the rest of the economy and taxation base).

[Polyal]

extra production lines for what demand? export potential?

I cant see why people think exporting cars from Oz is ever a good idea.

[falconnut]

Funny how FNA and FoA can sustain eachother but GM cant even help out its own AU arm, pathetic.

[Brazen]

Originally Posted by Polyal

extra production lines for what demand? export potential?

I cant see why people think exporting cars from Oz is ever a good idea.

Domestic, probably a compact SUV will be one of them.

[MAD]

How does $300mil investment create more sales?

[Brazen]

Originally Posted by falconnut

Funny how FNA and FoA can sustain eachother but GM cant even help out its own AU arm, pathetic.

This would involve a significant investment from GM. I bet Ford must be looking for something similar from the government although they have been very quiet about what they are doing after this gen Falcon.

[FPV GTHO]

Is this confirmation that these 2 potential lines would only be for domestic sales? If so i think this is a very tough sell. If its going to be on the same investment scale as Cruze, then its GM looking to invest 1.2B in total funds into local sales, but for what?

[Smoke Pursuit]

Yeh and then once they receive that 300 mill and spend it they will be on the "poor us" bandwagon again.

Its time they survived on their own two feet. We don't see the government giving any other manufacturing industries handouts of this magnitude.

To be honest they don't even build great cars anymore....

Holden gets most of its supplies from places like China and Korea, so how they can suggest there will be a flow on effect is beyond laughable... Exports are no good either so unless they are going to build the entire Holden / Daewoo local lineup locally I don't see what their point is.

Anyhow I'm not keen on seeing our tax dollars as individuals go to bail these idiots out... Let them sink and spend the 300 million on social security for all I care.

[fte50]

Majority will no doubt be banked & used to fund the next rollout of employee redundancies

[FPV GTHO]

Of this magnitude, no, but it does happen.

If we had Toyota and Ford now coming out asking for the same level of funding it would certainly get interesting. On one hand the general public could turn on the whole industry, as Holden's $300m request could easily turn into $800m-$1B industry wide. On the other hand if the public accepts it, it might take alot of heat off Holden.

[Smoke Pursuit]

Yes... Poor us... we now have to use that 300 mill to pay out another 1000 workers.....

If the government were serious they would partnership one of the big brands... either Ford or Holden and build their own cars.

[flappist]

How about some nice new factories up here in Sunny QLD

[fte50]

Originally Posted by DASH GT

Yes... Poor us... we now have to use that 300 mill to pay out another 1000 workers.....

If the government were serious they would partnership one of the big brands... either Ford or Holden and build their own cars.

Bingo ! .... but then they would have to pay a carbon tax

[Smoke Pursuit]

Originally Posted by flappist

How about some nice new factories up here in Sunny QLD

Yeah... Like the old days of Gemini's and Fairlanes... The only automotive manufacturer left in QLD as far as i know is Volvo / Mack at Wacol which still builds Volvo and Mack trucks from the ground up.

[Smoke Pursuit]

Originally Posted by fte50

Bingo ! .... but then they would have to pay a carbon tax

Julia would not like that...

They might go back to making all government agency's buy local however instead of Kia's and Hyundai's... Why not support the industry with some purchase orders rather then handouts.

[phillyc]

Originally Posted by DASH GT

They might go back to making all government agency's buy local however instead of Kia's and Hyundai's... Why not support the industry with some purchase orders rather then handouts.

Yeah, I believe that the Government departments should be made to buy Australian. If that means they must buy a more expensive car, ie $30-40k versus $20-35k then change the lease period from 2-3 years out to 3-4 years.

[Polyal]

Originally Posted by phillyc

Yeah, I believe that the Government departments should be made to buy Australian. If that means they must buy a more expensive car, ie $30-40k versus $20-35k then change the lease period from 2-3 years out to 3-4 years.

Damn straight...bunch of nuffties that end up running this country..I mean look at the circus at the moment..FFS

[phillyc]

Originally Posted by Brazen

Potentially big investment on top of the Cruze line added last year. Interesting to see how it goes, they are still profitable which helps their cause a bit with Detroit and the government. Exports are out and domestic production is in. Im betting Toyota will also be seeking money for Corolla or Rav4 soon.

http://www.news.com.au/business/m-mo...-1226282123276

There is no mention of Commodore in those 'two extra lines'.

In fact, reading some related articles. They are not talking about 'two extra lines' they are talking about 'two lines'.

http://www.adelaidenow.com.au/news/s...-1226282030909

Mr Devereux would not be drawn on the support that had been discussed, but said the $150 million handed across to support the installation of the Cruze platform at its Elizabeth plant was a "kind of reference point" for future capital works.

"We would be looking to put two different architectures into our Adelaide plant in the second half of this decade," he said.

The REAL story is therefore as follows:
* The $150m that GovCo coughed up for Cruze gets it to 2016.
* After that, they want the same $150m to get Cruze2 to 2020.
* Plus they want another $150m to build the Commodore replacement.

[Bossxr8]

Originally Posted by phillyc

Yeah, I believe that the Government departments should be made to buy Australian. If that means they must buy a more expensive car, ie $30-40k versus $20-35k then change the lease period from 2-3 years out to 3-4 years.

Definately. Can't believe Australian government agencies don't buy nothing but aussie made cars except in cases where they require vehicles that aren't made in Oz, like an 8 seater people mover for example.

Small cars should be Cruzes, medium Camry, large Falcon or Commodore and SUV should be Territory.

4X4 utes should be Ranger or BT50 cause they were developed here.

Its a disgrace that they are buying rubbish like Priuses, Hyundais and the like.


As for Holden asking for 300 mil, is there any end to GM's greed. Ford only got 30 mil and the whingers wouldn't shut up about it, now Holden are asking 10 times that. 300 mil is just too much. Although in saying that i'd rather see the government give money to the auto industry than waste it on the usual crap they psss it away on.

[jpd80]

Originally Posted by phillyc

The REAL story is therefore as follows:
* The $150m that GovCo coughed up for Cruze gets it to 2016.
* After that, they want the same $150m to get Cruze2 to 2020.
* Plus they want another $150m to build the Commodore replacement.

Bingo,
Give us cash for Cruze II and Malibu-Impala

[GT69]

Originally Posted by DASH GT

Julia would not like that...

They might go back to making all government agency's buy local however instead of Kia's and Hyundai's... Why not support the industry with some purchase orders rather then handouts.

I work for QLD health. Not a single Ford and 1 Holden (epica) in there fleet of 68.

[phillyc]

Originally Posted by Bossxr8

Definately. Can't believe Australian government agencies don't buy nothing but aussie made cars except in cases where they require vehicles that aren't made in Oz, like an 8 seater people mover for example.

Small cars should be Cruzes, medium Camry, large Falcon or Commodore and SUV should be Territory.

4X4 utes should be Ranger or BT50 cause they were developed here.

Its a disgrace that they are buying rubbish like Priuses, Hyundais and the like.


As for Holden asking for 300 mil, is there any end to GM's greed. Ford only got 30 mil and the whingers wouldn't shut up about it, now Holden are asking 10 times that. 300 mil is just too much. Although in saying that i'd rather see the government give money to the auto industry than waste it on the usual crap they psss it away on.

I agree with your logical reasoning / listing of the made here, then designed here and everything else last.

To the bolded bit. Yeah, the media made a massive beat up about it when Ford Aus got $30 million from the Federal Government. GM Holden are asking for $300 million which is as you've rightly said 10 times as much, but so far there is 1/10th of the noise about it.

[jpd80]

Originally Posted by phillyc

I agree with your logical reasoning / listing of the made here, then designed here and everything else last.

To the bolded bit. Yeah, the media made a massive beat up about it when Ford Aus got $30 million from the Federal Government. GM Holden are asking for $300 million which is as you've rightly said 10 times as much, but so far there is 1/10th of the noise about it.

If Ford had received anything like the $149 million Holden received for Cruze, I think Focus might have come here.
Ford don't openly say it but I think they were disappointed by the less than wonderful $30 million on offer,
no doubt, Thailand greeted them with open arms...

[phillyc]

Originally Posted by jpd80

If Ford had received anything like the $149 million Holden received for Cruze, I think Focus might have come here.
Ford don't openly say it but I think they were disappointed by the less than wonderful $30 million on offer, no doubt, Thailand greeted them with open arms...

Yep, then shot government protesters in the street... But, that is getting off track.

http://www.goauto.com.au/mellor/mell...2576000083B801

Well it was in fact $20m to get Focus here. Which is / was pathetic. An additional funding of $129m (total of $149m for Cruze) spread over 25,000 sales a year for 5 years is $1,000 per vehicle advantage assuming all other factors being equal. Knowing your key locally produced competitor is given that head start, Ford were smart in not going ahead with Focus.

Getting back on track, my reference to the $30m was the uproar Ford got from the Federal Government just 6 weeks ago, when they announced a co-investment to the tune of $103m for the Falcon and Territory updates which will take them to 2016. I mean Ford have earmarked half of that cash themselves, but it was portrayed (deliberately?) that it was all government money.

[stang65]

Originally Posted by jpd80

If Ford had received anything like the $149 million Holden received for Cruze, I think Focus might have come here.
Ford don't openly say it but I think they were disappointed by the less than wonderful $30 million on offer,
no doubt, Thailand greeted them with open arms...

For $300 million why doesn`t the Australian goverment just buy Holden. It makes my blood boil how Ford gets attacked left right and centre and the crap just slides off Holden.

Not to mention they have already said the comodoore is going and the replacement will be a world car not built here.