Another Holden is gone article

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http://smh.drive.com.au/motor-news/h...031-2wma7.html

Holden will stop manufacturing in Australia in three or four years no matter what Canberra does to prop it up, senior ministers in the federal government now believe.

The bleak conclusion, which has not been stated publicly, is fuelling strong resistance inside the government to further taxpayer subsidies to the automotive industry.

Also fuelling ministerial anger is the assistance sought by Holden in current crisis talks, which according to one is "in excess of $200 million" per year from 2015, when the current car plan expires.

The minister said there was a recognition that too much good money had been spent after bad and that the end of the sector could not be forestalled forever.

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A looming policy showdown between economic rationalists and those in favour of a new car assistance plan is shaping as the first major division in the Abbott cabinet, and the first real test of the Prime Minister's economic policy instincts.

It comes as Labor dramatically stepped up the pressure on the government on Thursday to throw a life-line to Holden.

Former industry minister Kim Carr pleaded with the government not to wait for an interim Productivity Commission report, due before Christmas.

Declaring there wasn't a single car on the road which had not been subsidised, Senator Carr said Canberra needed to act within a fortnight or the General Motors board, meeting in Detroit, would vote to shift its operation to China.

"It may well be that as soon as the December meeting, a decision is taken to actually wind down manufacturing facilities in this country," he said.

Economic ministers are said to be increasingly cynical about Holden's intentions and are convinced the company's Detroit headquarters has resigned itself to pulling out of Australia, citing among other things the imminent re-deployment of Holden's chief executive, Mike Devereux, to China.

They suspect the amount being asked for in exchange for few if any commitments, such as increased exports or minimum job numbers, suggests Detroit is virtually inviting Canberra to say no.

Toyota is also feeling the pinch of the high dollar, announcing on Thursday that it will require productivity improvements from its 2500 employees to reduce the cost of its cars by $3800 by 2018.

“We need to take urgent action because we are now seeing gaps in our transformation plans," said CEO Max Yasuda.

"We must develop detailed plans to close these gaps if we want to remain at the negotiating table for future investments.”

Mr Abbott brushed off claims of a split in Coalition ranks and appeared to offer hope to auto-workers, saying in Melbourne: "The Government is absolutely at one in its commitment to give the car industry every chance of success."

The decision on Holden's future is already caught up in politics with a state election next March presenting a challenge for the Liberal opposition in South Australia if the federal government decides to refuse further assistance.