The tables have turned: now it’s the Australian Government that wants money from Holden to help create jobs as the car manufacturer shuts operations in South Australia and Victoria.
Holden last Wednesday announced that it would stop making and assembling cars in Australia by 2017, putting 1,600 people in Elizabeth, South Australia and 1,300 people in Victoria out of work.
Prime Minister Tony Abbott said today that the government was putting together a $100 million assistance package for Holden workers, including $60 million from the Federal Government and $12 million from Victoria.
The Government hoped to secure another $12 million or so from South Australia and $20 million from Holden.
“We’ve had some initial discussions with Holden – they are receptive to contributing to the fund,” Industry Minister Ian Macfarlane said in a Canberra press conference with the Prime Minister this afternoon.
Holden has received some $1.8 billion in Australian government subsidies and grants in the 11 years to 2012, and had been lobbying both sides of politics for more help in recent months.
Its decision to pull out of Australian manufacturing came despite Treasury’s $1 billion Automotive Transformation Scheme, and a further $1 billion to be spent between 2015 and 2020.
In a press conference last week, Holden CEO Mike Devereux would not reveal exactly how much Holden would have needed to keep manufacturing cars on shore, stating only that its manufacturing operations in South Australia and Victoria were “no longer viable”.
Abbott today acknowledged the difficulties facing Holden’s manufacturing workers but said they were now “liberated to pursue new opportunities and get on with their lives”.
“This government is not in the business of leaving people behind but we have to accept that what was right for people 10 or 20 years ago may not be right for them far into the future and we have to be able to adapt,” he said.
“It is very hard to adapt when the business you’ve worked in for decades fundamentally changes,” highlighting the experiences of Mitsubishi workers when the Japanese car maker closed its Adelaide plant in 2008.
“Some of the Mitsubishi workers have struggled to find work; others have had almost a rebirth of their working lives. I dare say that will be the same for workers at Ford and Holden when manufacturing stops.”
In an interview with Business Insider Australia last week, government adviser and manufacturing expert Goran Roos warned that the end of Australian car manufacturing would cost the Australian economy more than had been put aside in industry subsidies and grants.
He said the Government needed to have a plan to deal with Holden’s decision by early this week, explaining that it usually took three to seven years to reskill people in the supply chain.
“Government support cannot substitute for strong management,” Abbott argued today. “No country has ever taxed its way to prosperity; no company has ever subsidised its way to prosperity.
“It’s profitable private businesses, large and small, which are the absolute foundation, the essential prerequisite for the prosperity of this nation and all others like it.”
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