Man who pulled plug on Holden says politicians were not to blame

http://www.theguardian.com/business/2014/jan/14/holden-says-politicians-not-to-blame

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The Abbott government has claimed vindication of its car industry policies after a senior General Motors (GM) executive denied the decision to end Holden manufacturing in Australia was linked to a lack of federal funding.

The treasurer, Joe Hockey, who faced accusations in December that he “goaded and dared” Holden to exit Australia, said the comments were a repudiation of opposition claims that the company would have made a different decision if Labor had remained in power.

The head of GM’s international division, Stefan Jacoby, said he was the one who decided to close Holden's Australian factories and rejected suggestions he had been influenced by Hockey’s parliamentary question time criticism, according to News Corp reports.

"We are business driven. We have our own agenda and we are not pushed by anybody from the Australian government to make that decision," he told reporters at the Detroit motor show.

"I initiated this decision, being the leader of these markets, and the decision was driven purely by business rationale."

Jacoby said local production did not make sense in Australia, where the market was "just too small" and with trade barriers likely to be broken down further.

"The decision was not made on any [government] incentives or any reduction of incentives," he said.

Hockey’s spokeswoman said the opposition leader, Bill Shorten, and the South Australian Labor premier, Jay Weatherill, had been “called out by General Motors for their foolish behaviour in asserting that Holden would not have left Australia under Labor”.

“As the comments from Mr Jacoby reinforce, this was a business decision that wasn’t made on the basis of any government incentives,” she said.

The most senior South Australian member of Tony Abbott’s cabinet, Christopher Pyne, demanded an apology from Weatherill, who faces a state election in March. Pyne said Weatherill’s credibility had been shredded and Labor’s state election strategy of blaming the federal government was now “a carcass swinging in the breeze”.

“In fact Stefan Jacoby has said that no amount of money, no amount of money at all from the federal government, would have caused them to make a different decision,” Pyne told reporters in Canberra.

“Jay Weatherill stands condemned today, condemned for using the suffering of families in northern Adelaide and in Melbourne, trying to use their suffering for his own base political survival.”

But Weatherill refused to take a backward step, saying he understood why the company had to “position themselves in a particular way” given they would be one of the largest importers of cars into Australia.

“They need to maintain relationships. But let's be absolutely clear about what was happening,” Weatherill told reporters on Tuesday.

“There was a negotiation with the workforce about wage freezes. There was a proposition put to the federal government. It was put there absolutely clearly; the federal industry minister [Ian Macfarlane] was advancing that cause within the federal cabinet; the state Liberal premier of Victoria [Denis Napthine] was advancing the cause jointly with me to the federal Liberal government and now of course we have the raking over the coals now Holden has closed to make sure that blame is shifted.”

Weatherill said the federal government had not agreed to a proposal the company put forward at a meeting on 2 October “which was about making sure that Holdens stayed in Australia”.

"On 2 October a proposition was put to the federal government that they rejected which led to the closure of Holdens. It's as simple as that,” he said.

The Australian Financial Review reported in December that the company requested an extra $80m a year for seven years. The 2 October meeting in Adelaide reportedly involved managing director Mike Devereux, Macfarlane, Weatherill and his manufacturing minister, Tom Kenyon.

The newspaper said a summary of the meeting showed that in order to keep making cars in Adelaide from 2016 until the end of 2022, Holden wanted $80m a year in addition to the $40m it was to receive from the Automotive Transformation Fund and $275m already pledged for seven years by the federal and state governments.

On 10 December, Devereux told a Productivity Commission hearing the company was yet to make a decision on its future in Australia, prompting Hockey to demand the business “come clean with the Australian people” and “be honest about it”.

Hockey said if he was running a business committed to a future in Australia he would not be saying he had not made a decision about its future.

"Either you're here or you're not,” the treasurer said.

The company announced the following day that it would cease producing cars in Australia from 2017, putting 2,900 employees out of work and threatening thousands of jobs in component manufacturing businesses. It blamed “the perfect storm of negative influences the automotive industry faces in the country including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world”.

Shorten said in December he believed Holden was pushed by the Coalition government’s declaration that there would be no more federal support and investment.

“What I will say to the workers, the small businesses, the apprentices and the families of all these people who are displaced, is that if Labor had been in government we would not have let this happen,” Shorten said at the time.

“Joe Hockey called their bluff and now he has thousands of jobs around his neck. His failure and that of the prime minister to keep Holden will be a defining moment of this government.”

Shorten was unmoved by criticism of his past statements in light of Jacoby’s fresh comments.

The opposition leader said Abbott and Hockey were “trying to explain away their failure to stand up and fight for thousands of Holden jobs”.

In a statement on Tuesday, Shorten said he did not accept the notion that Australia could not compete with the rest of the world, but it required a government that did not “treat highly skilled, blue-collar workers with contempt”.

“This government continues to treat Australian jobs and the livelihood of workers as a game. They have spent more time trying to justify their own inaction over Holden than they ever spent trying to protect Holden jobs,” he said.

“Their pathetic excuses are cold comfort to the thousands of workers and their families who have seen their jobs leave the country under this government’s watch.”

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