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Oz govt to save automakers?

2013-08-05 09:01

FINANCIAL RELIEF: The Australian government has stepped in to to help the country's auto industry which provides thousands of jobs and brings in revenue through exporting cars. Image: AFP

SYDNEY, Australia - The Australian government has pledged the equivalent of R1.7-billion to the nation's automakers to shore up struggling sectors to help the economy move away from a mining boom.

Industry minister Kim Carr said the funds "will ensure the automotive manufacturing sector has a strong future and continues to provide high-skill, high-wage jobs for Australians".

ONGOING SUPPORT

Carr added: "The motor vehicle manufacturing industry in this country provides thousands of jobs, billions of dollars in export income and investment and benefits in research and development. Our actions will provide crucial ongoing support for an industry that has been under considerable pressure with a high Australian dollar over an extended period and an increasingly competitive global market."

The auto sector employs more than 50 000 people in Australia with another 250 000 jobs in associated industries but it has struggled, until very recently, with the Australian dollar trading near or above parity with the US dollar for almost two years, squeezing exports and compounding rising production costs.

The Australian capital, Canberra, gave R36.5-billion to automakers at the height of the global economic downturn and provided additional life lines to Ford and (GM subsidiary) Holden in 2012 but it was not enough to prevent Ford from announcing in May that it would cease production in Australia by 2016.

Holden, which in April announced a plan to dump 500 jobs, and Toyota are the two remaining major players.

Carr said he was consulting with automakers and associated manufacturers about how best to use the money.
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