Inquiry too little too late, warns Holden

HOLDEN has dismissed calls to launch a federal inquiry into Australia’s car-making industry, saying it will be too long before anything is resolved.

Federal shadow industry minister Sophie Mirabella last week announced that, if elected, a coalition government will hold a Productivity Commission review into the car industry “to develop a funding model to ensure the long-term viability of the car industry in Australia”.

“The coalition has a clear position on the car industry: there will be no surprises or broken promises like we’ve had under this dysfunctional Labor government,” Mrs Mirabella said.

She told Network Ten yesterday that if car companies “don’t qualify once the new funding model is set up, I’m not going to do special deals behind closed doors because it makes a mockery of having benchmarks that companies need to reach in order to be granted the privilege of taxpayers’ dollars”.

However, Holden managing director Mike Devereux said a Productivity Commission inquiry was a slow process, with any outcome likely to be “at least a couple of years” away from providing anything meaningful for the industry.

Holden government relations and public policy manager Matt Hobbs said if a coalition government was voted in this year, a Productivity Commission inquiry could take up to three years to resolve anything.

“It’s going to take a year to set the terms of reference for the inquiry, a year to hold the inquiry and then another year for the public consultation period, so it will be three years before anything is done,” he told GoAuto.

“You know what happens after that – it’s another election,” he said.

The federal government is under renewed pressure from the coalition over claims it awarded Ford millions of dollars in handouts despite knowing that the car-maker intended pulling out of Australia in 2016.

Ms Mirabella has also called on industry minister Greg Combet to explain why he gave $34 million to Ford in 2011 after the Australian Financial Review reported at the weekend he was aware they were likely to shut down local manufacturing.

The money is earmarked to help Ford develop more fuel-efficient – and therefore more environmentally friendly – versions of the Falcon family sedan and ute, and Territory SUV due next year as part of a late-life model refresh.

It is also part of a $103 million investment by both Ford and the Victorian government – which has declined to disclose how much it has contributed.

“If Mr Combet knew (about Ford’s 2016 closure), then did the prime minister (Julia Gillard) know? And, if so, why did she stand in front of hundreds of Ford workers on January 17 last year and say to them, ‘There will be an additional 300 jobs as a result’?” Ms Mirabella said.

Since Ford’s announcement last week, the Victorian and federal governments have committed to tipping almost $40 million into a fund that will help Ford workers and the Broadmeadows and Geelong communities – where the Falcon and Territory, and the six-cylinder engine that powers them, are made – to adjust to the factory closure.

A further $12 million will go towards helping parts-makers adapt to the loss of Ford.

The Productivity Commission last looked at government support for car-makers in 2002 – back when Mitsubishi was still making cars in Australia alongside Ford, Holden and Toyota.

The commission’s report noted that the Australian car-making industry faced a range of potential threats including a significant rise in the value of the Australian dollar, and prospective changes in fleet purchasing practices that could reduce demand for locally made vehicles.

“Moreover, as noted, the industry’s future, including its export potential, is heavily dependent on the sourcing policies of the major global automotive manufacturers represented in Australia,” the report said.

“Production and investment decisions affecting their Australian subsidiaries will be based on what is best for the global entity, which may not align with the interests of the local arm. This introduces an element of uncertainty about the future of the local industry – uncertainty that is reinforced by broader changes occurring in the global industry.”