Dec. 11 - Australia's car industry may be under threat after General Motors announced it will stop making cars in Australia by 2017 due to high costs and a cripplingly strong currency. As Joanna Partridge reports it's fuelled fears that rival Toyota might follow suit.
The Holden car plant in Adelaide has long been a source of national pride. And General Motors' decision to close it down is a hammer blow for the industry. (SOUNDBITE) (English) GENERAL MANAGER OF GM AUSTRALIA MIKE DEVEREUX SAYING: "No matter which way we applied the numbers, our long term business case to make and assemble cars and engines in this country is simply not viable." GM's General Manager in Australia said there had been a big shift in the automotive market and the wider economy. (SOUNDBITE) (English) GENERAL MANAGER OF GM AUSTRALIA MIKE DEVEREUX SAYING: "In many ways Australia's automotive industry is up against a perfect storm of negative influences, including the sustained strength of the Aussie dollar against almost all major trading currencies, the relatively high cost of production and the relatively small scale of the local domestic market." A political storm is brewing too. GM's decision follows one made by Ford in May to close two plants in 2016. There are now fears Toyota - the only remaining producer - could follow suit. Finance Minister Joe Hockey was given a hard time by unions. (SOUNDBITE) (English) JOE HOCKEY, AUSTRALIAN FINANCE MINISTER SAYING: "The government, whether Labor or Liberal, has provided enormous financial support over a billion dollars a year but the net result is, we've seen a halving in the production of Australian cars on a world scale and these are the things that we have to deal with in order to address some of the challenges for Holden." (SOUNDBITE) (English) DAVE SMITH, AUSTRALIAN MANUFACTURING WORKERS VEHICLE DIVISION SPOKESMAN SAYING: "The government knew what was required to keep Holden in Australia and keep the automotive industry in Australia and it has instead chosen to just abandon those 50,000 workers. It's going to be devastating for the economy of Australia. There is going to be $21 billion hole ripped into the economy." Manufacturing in Australia has declined by 10 percent over the past decade - the strong Australian dollar and high costs making imports more competitive. Combine that with a slow down in mining which has powered the economy in recent years and Australia's government has some challenges ahead.