Holden calls for 'balanced' government policy

GM Holden chairman and Federal Chamber of Automotive Industries (FCAI) president Mark Reuss plans to “make good” on prime minister Kevin Rudd’s vision that the local car industry uses frontier technologies to increase fuel efficiency and reduce greenhouse emissions, but has warned that the federal government must ensure that “the right policy settings” are put in place.

Speaking at the Manufacturing Futures Conference in Melbourne last week, Mr Reuss said Australia’s automotive policy framework to guide the industry to a lower tariff environment was being tested “in a way we have not seen before” and that it was crucial that Australia continued to be seen as an attractive place for investment.

“To do this, it is vital that we get the right policy settings for the future,” he said. “There is increasing fragmentation in global markets and there is a trend towards the production of a wider range of lower-volume products.

“In this context, a unique and inherently low-volume Australian platform is at least as likely to be seen as a target for rationalisation, as it is to be viewed as a business opportunity.

“Using the carrot and stick analogy, I want to focus on the carrot but believe me when I say the stick is there and it is very, very real.

“Shifting consumer needs and the necessity to address climate change is driving a fundamental shift in the types of vehicles and technologies we need for Australia.



Left: GM Holden chairman and Federal Chamber of Automotive Industries (FCAI) president Mark Reuss.

“This will require substantial investment by our parent companies in the Australian industry in the next few years – (and) what do I mean by substantial? Billions upon billions of dollars.”Mr Reuss said he was surprised by the “less than supportive commentary” about the industry and policy settings under consideration, particularly the recommendation from the Bracks review into the automotive industry that tariffs fall from 10 per cent to five per cent in 2010.

“They ignore one basic fact – it is definitely not a level playing field out there,” he argued. “Our nearest neighbours have shown little interest in following our lead on tariffs and that has an immediate impact on who offers the more compelling place to invest.

“The Government understands the significant, strategic benefits which will flow to the economy if the right policies are in place.

“It is vital that we get the policy framework right and send the correct signals to our parent companies to attract investment in new vehicle platforms and technologies for the future – or other countries will take that opportunity away from Australia.”Mr Reuss said it was also important that the government struck “the right balance” when it came to transitional arrangements under the next policy.

“Market access for Australian vehicle producers remains an issue to be addressed. While it has been encouraging to see a long-term approach recommended in the Bracks review to the issues facing the industry, the challenges are upon us today,” he said.

“We need to ensure we have the right balance when it comes to transitional arrangements. Whether that is tariffs or some other equivalent measure, the fact is that the playing field slopes heavily away from us.”

Read more:

Holden cuts workforce after GM cancels programs

Local car suppliers shed jobs

Big Three take tariff fight to Canberra

Economists say Bracks tariff modelling is wrong