Lion waits in wings as Korea tensions rise

HEIGHTENING tensions on the Korean peninsula are having little impact on Holden - for the time being - the company says.

However, while on the surface it is business as usual in Australia, the car-maker has admitted that its parent company does have contingency plans in place should one of the world’s last dictatorships spin out of control.

The Korean peninsula, Japan and the US are on a war footing after the renegade state announced it would resume enriching uranium for weapon and electricity production.

As well as its southern neighbour, North Korea has made direct threats against US targets, largely in response to a recent series of joint South Korean-US war games held in the region.

A spokesman for Holden told GoAuto that the car-maker’s US-based parent, General Motors, already had “crisis contingency plans in place across the world” should something spin out of control in one of its international car-making bases.

However, he said the Korean tensions would be “unlikely to have any effect on our Australian business at this stage”.

GM Korea employs about 17,000 workers and builds about 1.4 million cars a year that are exported to about 150 markets worldwide.

GM said today that it would look at shifting all key personnel and production outside the Korean peninsula should the situation deteriorate and North Korea back up its threats with action.

One possibility is that the left-hand-drive Chevrolet Cruze, or even right-hand-drive export models, could be built alongside its Holden-badged sibling in Adelaide.

Richard Riley is the chief executive of the Federation of Automotive Products Manufacturers, an industry body representing small businesses and companies that feed car parts into the Australian - and international - supply chain.

He said that while Australian components makers did have spare capacity, a large increase in demand for parts would take some time to ramp up.

“Even if it was a (Holden) Cruze part it could probably not happen that quickly,” Mr Riley said. “It could be six months - it’s not something you can just switch off or switch on straight away.

“They’d have to tool up for extra volume.” He said a bigger problem for Holden would be the loss of Korean-sourced parts used in the Cruze, such as engines.