Holden secures $200m subsidy

Dr Smith · 22-03-2012, 12:30 AM

THE AGE:
http://www.theage.com.au/opinion/pol...321-1vko6.html

Quote:

GM HOLDEN will promise today to keep making cars in Australia for at least another decade after securing a subsidy package from the federal and South Australian governments worth more than $200 million.

Quote:

Holden will continue local production of the Commodore until 2016 when it will be replaced by one of its parent company's US models, it was reported last night.
It is believed a new vehicle will also be produced at the company's Adelaide plant, alongside the popular Cruze model, as part of the deal.

malazn mafia · 22-03-2012, 12:57 AM

No more Commodore after 2016?... Imagine if its successor is a bigger brother to the Cruze (FWD sedan). Knowing Holden, they could have gotten away with putting a body kit on a Daewoo large sedan and still sell it. What incentive will Ford even have to continue on with the Falcon. This is not good.

Dr Smith · 22-03-2012, 02:28 AM

Quote:

Originally Posted by malazn mafia

No more Commodore after 2016?... Imagine if its successor is a bigger brother to the Cruze (FWD sedan). Knowing Holden, they could have gotten away with putting a body kit on a Daewoo large sedan and still sell it. What incentive will Ford even have to continue on with the Falcon. This is not good.

What isn't clear yet is if the US replacement post 2016 will be badged Commodore or not and also what new car gets built alongside Cruze if it's not the Commodore replacement.

2011G6E · 22-03-2012, 05:29 AM

Phht...Ford, Holden...they all need government subsidies and help and protectionist taxing to shield them from the big bad world out there...

jpd80 · 22-03-2012, 06:54 AM

Quote:

Originally Posted by Dr Smith

What isn't clear yet is if the US replacement post 2016 will be badged Commodore or not and also what new car gets built alongside Cruze if it's not the Commodore replacement.

1) Zeta Commodore finishes in 2016,
2) after that, an Amreican designed car takes over
3) that new car will be built here until 2021 - one product cycle.

Now then, Holden and Toyota have both made long term commitments to remain,
will Ford follow suit and announce a new locally produced car for post 2016 or will they import......

And For my money, Holden getting $200 million and an export contract to the USA are the only things saving Elizabeth.

The Monty · 22-03-2012, 06:56 AM

So around 8000 employees.
Holden pays tax.
Each of the 8000 employees pays up to $8000 tax Per year.
Employees alone are putting in $64 million per year into the country via tax.
Times 10 years is $640 million.
Plus the money they spend in town to businesses that then have to pay tax to the government.
If I was the government, I would want to give them $200 million to get a $1billion PLUS return aover 10 years. Sounds like a good investment?

The Monty · 22-03-2012, 06:57 AM

Quote:

Originally Posted by The Monty

So around 8000 employees.
Holden pays tax.
Each of the 8000 employees pays up to $8000 tax Per year.
Employees alone are putting in $64 million per year into the country via tax.
Times 10 years is $640 million.
Plus the money they spend in town to businesses that then have to pay tax to the government.
If I was the government, I would want to give them $200 million to get a $1billion PLUS return aover 10 years. Sounds like a good investment?

I got my 8000 employees from this data:
NUMBER OF EMPLOYEES = 9724 (as at Jan 2005)
and took off a few.

jpd80 · 22-03-2012, 07:10 AM

Quote:

Originally Posted by The Monty

I got my 8000 employees from this data:
NUMBER OF EMPLOYEES = 9724 (as at Jan 2005)
and took off a few.

Only about 2500 are employed ar Elizabeth , a few more at Engine plant and of course engineering.

$200 million funding normally requires a $600 million commitment from Holden so $800 million to
prop up local manufacturing for 10 years...or will they come back in 2016 wanting more cash?
I swear Holden and Ford are masters at getting funding out of governments...

The Monty · 22-03-2012, 07:14 AM

Well there you go. $200 million in tax over the next 10 years. So the government is basically getting no revenue from the employees, but rather taking the money from tax from the business. Im assuming Holden and Ford would be on the Carbon tax list, so when you take into account the amount of money the company is still going to be paying in tax, just by keeping it open, it still makes financial sense to do it.

jpd80 · 22-03-2012, 07:17 AM

Quote:

Originally Posted by The Monty

Well there you go. $200 million in tax over the next 10 years. So the government is basically getting no revenue from the employees, but rather taking the money from tax from the business. Im assuming Holden and Ford would be on the Carbon tax list, so when you take into account the amount of money the company is still going to be paying in tax, just by keeping it open, it still makes financial sense to do it.

Without funding, you could import and sell the same number of cars, that's the argument
put by anti-local manufacturing advocates who post here:
"All the tax generated gets fed back into the industry instead of the government coffers
- it's just job creation really."

I don't subscribe to this belief btw...

Nikked · 22-03-2012, 07:21 AM

200mil gets a new car built?

jpd80 · 22-03-2012, 07:27 AM

Quote:

Originally Posted by Nikked

200mil gets a new car built?

$200 million funding normally requires a $600 million commitment from Holden so $800 million to
prop up local manufacturing for 10 years...or will they come back in 2016 wanting more cash?
But that doesn't account for funding for Cruze II which will need around another $150 million in the next two or so years.

I swear Holden and Ford are masters at getting funding out of governments...

Joe5619 · 22-03-2012, 07:48 AM

Quote:

Originally Posted by jpd80

Now then, Holden and Toyota have both made long term commitments to remain,
will Ford follow suit and announce a new locally produced car for post 2016 or will they import......

I think Ford need to hurry up & make their minds up what they are doing locally. Being the only local manufacture not to commit to the future, just gives negative reportors so much fuel for the fire!!
.
.
.

Good news for Holden, interesting that Commodore as we know it is gone, yet the media has never drummed that one home, like they have with Ford. I wonder if it is FWD or RWD? The strategy sounds very “One Ford” to me.

Nikked · 22-03-2012, 07:58 AM

It will be a RWD model...Zeta based

BlueOvalPrint · 22-03-2012, 08:03 AM

Why isnt the headline "Commodore dead in 2016" instead of "Holden gets $200m"? If it was Ford, that's how Drive would have skewed the story...

My money is on the replacement being a locally built (fwd) Malibu...

Resurrection · 22-03-2012, 08:22 AM

This will nail it for the Falcon - Ford will also kill the Falcon now that their rival has gone.

aussie muscle · 22-03-2012, 08:24 AM

Quote:

Originally Posted by jpd80

..or will they come back in 2016 wanting more cash?

i would...(if i were them)

Hulsty · 22-03-2012, 08:26 AM

Quote:

Originally Posted by 2011G6E

Phht...Ford, Holden...they all need government subsidies and help and protectionist taxing to shield them from the big bad world out there...

Same as the majority of car manufacturers world wide, they look after their own some way or another.

Brazen · 22-03-2012, 09:15 AM

I think the UK recently announced a billion for their car makers.

Brazen · 22-03-2012, 09:17 AM

I wonder if it will be a new alpha based Commodore? I also think if their is another model built it will be a compact SUV .

Pedro · 22-03-2012, 09:32 AM

Quote:

Originally Posted by Brazen

I wonder if it will be a new alpha based Commodore? I also think if their is another model built it will be a compact SUV .

GM has already announced that it will be the Malibu.

vanman_75 · 22-03-2012, 09:34 AM

Quote:

Originally Posted by jpd80

Without funding, you could import and sell the same number of cars, that's the argument
put by anti-local manufacturing advocates who post here:
"All the tax generated gets fed back into the industry instead of the government coffers
- it's just job creation really."

I don't subscribe to this belief btw...

And also the fact of no job equals more people on doll cues , not financeing cars , buying homes, money on holidays .etc etc any job lost in this country is bad news , and the cost of subsidies to holden / ford / Toyota are worth every penny ..
Makes me wonder what dreamworld some people live in ?
I would like to see someone reverse the math and work out the true loss in these areas , it would be staggering I imagine.

MAD · 22-03-2012, 09:36 AM

Everyone's quick to jump on the automakers about getting tax subsidies.
How's all the rental investors going out there with their negative gearing tax deductions?

Reduce negative gearing % and we would be able to prop up the auto industry as much as some other countires, and not even bat an eye at it.

Joe5619 · 22-03-2012, 09:38 AM

Quote:

Originally Posted by Pedro

GM has already announced that it will be the Malibu.

They have?? that is news to me.. Were can I read that??

Chopped · 22-03-2012, 09:50 AM

The next locally built Holden is supposed to be an SUV type vehcile.

imugli · 22-03-2012, 11:34 AM

Will "production" mean stamping or just CKD assembly?

DanielXR8 · 22-03-2012, 11:56 AM

Quote:

Originally Posted by Joe5619

I think Ford need to hurry up & make their minds up what they are doing locally. Being the only local manufacture not to commit to the future, just gives negative reportors so much fuel for the fire!!
.
.
.

I think the silence tells us Ford already have made their minds up.

Cúl-Báire · 22-03-2012, 11:59 AM

Great to see the government supporting unprofitable businesses like this. Sure GM Holden provide a lot of jobs to not only it's employees but it's associated suppliers and contractors - but i think it's high time they start investing in ways to become more sustainable operations and business practice wise...

There are thousands of businesses that survive in ultra competive markets with no / minimal support from the Government why can't GM Holden?

Hulsty · 22-03-2012, 12:15 PM

Quote:

Originally Posted by Cúl-Báire

There are thousands of businesses that survive in ultra competive markets with no / minimal support from the Government why can't GM Holden?

Thousands of car companies? Car companies the world over are suported by their governments and so are many many other companies, co investment incentives etc etc.

jpd80 · 22-03-2012, 12:31 PM

Quote:

Originally Posted by DanielXR8

I think the silence tells us Ford already have made their minds up.

In fairness Ford have said that the 2014 Falcon update would go ahead to take Falcon up to 2016..
That Holden needed to show its hand this far out in front is a major advantage to Ford who can now
decide two important points:
1) Which product - FWD/AWD or another RWD?
2) Build it ehre or import?