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Oz paying Big 2 to stay and play

2012-01-10 08:22

DAN ACKERSON: One scenario - Holden shuts shop.

Sid Astbury

SYDNEY, Australia - The world's biggest island is ready to keep on paying so its two US-based automakers can stay in production, government officials said after meetings in Detroit, Michigan.

Australia has three vehicle manufacturers - Toyota, GM Holden and Ford - that are kept in business by government subsidies.


Jay Weatherill, premier of South Australia, said after meeting GM's chief Dan Akerson that "one possible scenario" was for Holden to shut shop.

"We are, of course, urging GM not to pursue that option," he told national broadcaster ABC. "We're prepared to make a co-investment to make sure that Holden stays here."

Ford has been offered the equivalent of about R870-million as encouragement to keep its plant open until 2016.

The automotive trio, of which Toyota is the strongest, roll out mostly petrol-thirsty six-cylinder vehicles that have lost their appeal in the Aussie market because of higher petrol prices.

They have seen their share of the local market fall to less than 25% one-million new vehicles sold each year. They get by on exports to the Middle East, where petrol is cheap.

Around a third of total annual production is sent abroad.

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