Breaking news: Holden calls it quits in Australia

HOLDEN will quit its car-making business in Australia by the end of 2017, the company has announced.

In a brief statement issued this afternoon, Holden said it would build its last cars in Australia in late 2017 and become a full vehicle importer.

Mr Devereux will meet with workers at the company’s Elizabeth production line later today.

“We are completely dedicated to strengthening our global operations while meeting the needs of our customers,” General Motors chairman and chief executive Dan Akerson said in a statement.

“The decision to end manufacturing in Australia reflects 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.”

GM said its decision would affect about 2900 positions over the next four years – 1600 from the Elizabeth vehicle manufacturing plant in Adelaide and about 1300 from Holden’s Victorian workforce.

The only part of Holden’s business to remain past 2017 will be the Port Melbourne-based design studio, the company said.

Holden managing director Mike Devereux said it had been a difficult decision for the car-maker.

“We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people,” he said.

“GM remains committed to the automotive industry in Australia and New Zealand.

We recognise the need for change and understand the government’s point of view.

“Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers,” Mr Devereux said.

GM said closing Holden’s car-making operations would cost it between $400 million and $600 million this year alone 2013.

“The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs,” GM said.

“Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees’ union.

“The asset impairment charges will be considered special for EBIT-adjusted reporting purposes.”

Holden has called a press conference for late today.