A deal to save Holden’s Elizabeth factory in Adelaide has fallen through leaving more than 1,000 out of work.
The proposal to continue manufacturing in Australia made by Belgian entrepreneur Guido Dumarey, who owns Punch Corporation, was scrapped by General Motors in Detroit last night.
A joint statement was issued by Dumarey and General Motors saying: “Both parties concluded that a viable business model was not possible. Therefore the proposal will not be taken forward.”
Minister for industry, innovation and science Christopher Pyne said he was “surprised and disappointed at the sudden announcement” and that “it does not match the statements both Punch and GMH have made to me”.
“The challenges to domestic automotive manufacturing in Australia — lack of scale, high production costs, supply base contraction and increasing market fragmentation — persist and cannot be overcome for this business case,” read the statement.
“In particular, the wind down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable.”
The news comes just hours after Holden announced the end of its Australian-built Cruze small car in October 2016 — the first car to cease production since Holden announced it would shut down its manufacturing plants in Australia in 2013.
That move alone cost 400 jobs at the Elizabeth plant in South Australia.
The closing of the factory follows other car manufacturers such as Ford who will close its car assembly line in Broadmeadows in October 2016 and Toyota who will shut its Altona site by 2017 making 2,500 workers redundant.