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Holden to quit Australia in 2017
Holden to quit Australia in 2017

Car maker Holden will stop manufacturing in Australia in 2017.

Victorian Premier Denis Napthine revealed the decision in State parliament, saying the Government had been advised that Holden is discontinuing in 2017, and it's an “irreversible decision".

Dan Akerson chairman and CEO of GM, Holden's parent company, issued a statement confirming the end of withdrawal and the transition of Holden to a sales company.

“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the 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,” he said in a statement.

He said approximately 2900 positions would be cut over the next four years - 1600 from Elizabeth in South Australia and 1300 from Victoria.

Australian chairman Mike Devereux said the priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.

"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia,” Mr Devereux said in the statement.

Mr Devereux said GM was committed to working with unions and local communities, along with the federal and state governments to support its people.

He said the sale and service of Holden vehicles would not be affected, and GM remained committed to the automotive industry in Australia and New Zealand.

“We recognise the need for change and understand the government point of view,” he said.

“Moving forward our business model will change significantly however. GM Holden will remain an integral of its communities and an important employer.”

Mr Devereux will hold a press conference in Adelaide 3.30pm (AEDT).

The Federal Government was informed just before 2pm (AEDT) of the decision by General Motors to close a “significant” part of its Holden operation in Australia and New Zealand.

Acting Prime Minister Warren Truss said it was a difficult day for Holden employees in Victoria and South Australia.

“We regret the fact that GM is phasing down its operations in this country,” Mr Truss told Federal Parliament.

“Holden has been an iconic national brand for Australians. It's part of our heritage.”

Mr Truss said the Government had wanted Holden to continue making cars in Australia and it was a pity that would not happen.

“This is a difficult day for Australians, a difficult day particularly for the Holden employees,” he said.

Mr Truss said Holden would still have a presence in Australia after 2017 and the government would support the local manufacturing industry.

“We want, in fact, to see a manufacturing sector that's strong and vibrant and able to stand on its own feet,” he added.

Treasurer Joe Hockey said the Federal Government would do all it could to ensure Holden's decision did not lead to a significant economic downturn in South Australia or Victoria.

“We will do everything we can to assist during this transition,“ he told parliament.

Mr Hockey also said Holden's decision was not a surprise, despite the “enormous” financial support given to the car industry over the years.

The company on Tuesday told a Productivity Commission inquiry into the auto industry it had not decided whether to continue manufacturing cars in Australia.

The announcement follows debate over whether the Abbott government would considering whether to provide a new line of assistance to Holden or let the market take its course as it did when Mitsubishi stopped Australian production in 2008.

Dr Napthine said the Victorian government had been told the decision was irreversible.

“This is a very, very sad day for Australia and Victoria,” he told parliament.

“We have been advised that it is an irrevocable decision.”

An Australian Manufacturing Workers Union spokesman says Holden's withdrawal will be devastating and lead to 50,000 job losses and a $21 billion hole punched in the economy.