**GM preparing for bankruptcy**

[vztrt]

Holden will stay with GM

http://www.theage.com.au/national/sm...0601-bt07.html

Small car pulls Holden out of GM wreck
Toby Hagon
June 2, 2009

TAXPAYER funds and a locally built small car will save Holden from the chopping block as parent company General Motors enters Chapter 11 bankruptcy protection.

There were fears that Holden, which has not posted a profit since 2004, would be lumped with other "bad" assets and liquidated or sold when GM restructured its global business during a planned 90-day stay in Chapter 11.

But the Australian car maker's decision to build a small vehicle at its Elizabeth plant in South Australia, with $149 million from the Federal Government, appears to have guaranteed it a role in a smaller and leaner GM.

Holden spokesman Scott Whiffin refused to comment on the fate of 6500 workers or whether Holden would join the European Opel subsidiary -- and, likely, Saab and Hummer -- in being sold as part of a huge General Motors reorganisation designed to return the company to profitability.

But industry sources and company insiders said the recent Government subsidy through the controversial Green Car Innovation Fund had secured the future of the Australian brand.

They said the company might have found itself on the wrong side of the ledger had it not expanded beyond the Commodore large car.

Holden head Mark Reuss said the new car "redefines our future in Australia", adding: "We're known for large cars today. We're going to also be known for very fuel-efficient, responsible small cars and large cars here in a new era in Holden."

Federal Industry Minister Kim Carr is optimistic about Holden and its operations, including the Melbourne engine plant and the Adelaide vehicle production line that builds the Commodore, still Australia's best-selling car.

"I remain very optimistic that Holden will weather the global financial storm and emerge stronger," he said. "The co-operative efforts of management, workers and the Australian Government have put the company in a good position to deal with whatever General Motors may announce."

He said the Holden operations were not likely to be sold off and that, therefore, there were no potential buyers.

It is unclear what impact the publicity surrounding GM will have on consumer confidence. Holden has called a media conference this morning. With RICHARD BLACKBURN, JAEDENE HUDSON and JACOB SAULWICK