No bail out for Holden says Federal Government

[deesun]

I doubt this very much. If Holden were in the same boat as GM then the Federal Government would almost certainly come to the rescue

01:02 AEST Wed Jun 3 2009 By Karlis Salna
Industry Minister Kim Carr has assured Holden's 6,000 workers that their jobs are safe.
The federal government says it won't bail out Holden if the carmaker goes down the same blind alley as General Motors, its US parent company.

GM has filed for bankruptcy protection in the US as part of a survival plan which will see it re-emerge as a leaner outfit within 60 to 90 days.

The restructuring plan involves GM receiving billions of dollars in US government financing and will see it axe several major brands, 14 factories and 47,000 workers worldwide.

But Industry Minister Kim Carr has assured Holden's 6,000 workers and others in the Australian automobile industry that their jobs will not be affected by the developments in the US.

"The reorganisation of General Motors announced overnight will have no direct impact on Holden, its workers or its suppliers," Senator Carr told reporters on Tuesday.

Senator Carr said the company was "effectively self-contained".

"The operations in this country are separate from what occurs in other parts, and are very different from other parts of the world," he said.

Prime Minister Kevin Rudd said Holden was considered an "A-list asset" in the GM group and was much better placed to withstand the impact of the global financial crisis.

"Holden has forged its path through difficult circumstances and the company's leadership and employees have worked together to achieve this," he said.

"They've also done this through direct partnership with the Australian government."

The federal government's $6.2 billion green car plan had provided certainty for the car manufacturing sector for the next decade, Mr Rudd said.

Holden has not made a profit in Australia since 2004, and will receive $149 million from the federal government and $30 million from the South Australian government to fund a second car manufacturing line in Adelaide's northern suburbs.

But Senator Carr is adamant the federal government will not be following the Obama administration in bailing out carmakers.

"We've got a new car plan outlined in detail, we have no intention of changing that. The legislation will go to the parliament this session," he said.

"That outlines the extent of the financial support that we'll be providing to the industry through the new car plan."

As part of the restructuring plan for GM, the company will receive $US30 billion ($A37.36 billion) from the US government on top of nearly $US20 billion ($A24.91 billion) already loaned to the ailing firm.

The deal would give the US government a 60 per cent stake in the auto giant.

However, Holden managing director Mark Reuss, who flew to Canberra on Tuesday for meetings with Senator Carr and the prime minister, said the Australian subsidiary had already undergone a major restructuring.

Holden would remain a viable entity, he said.

"Up to this point, we have become, and restructured to be, a cash positive and liquid and almost profitable entity here in Australia over the last 15 months," Mr Reuss said.

He said the company would not receive any money from the federal government until cars started rolling off the new Adelaide production line in the third quarter of next year.