“General Motors Holden needs a commitment from the Abbott government on financial subsidies within two months or it is likely to announce it will cease making cars in Australia.
“Holden had promised it would keep its Adelaide manufacturing operations until 2022 under a $275 million ‘co-investment’ negotiated by the Gillard and South Australian Labor governments that would see it develop two new vehicles after 2015.
“But the US-owned company now argues the circumstances have changed and the new Coalition government has yet to commit to any specific arrangements for the industry beyond 2015 other than to promise a Productivity Commission review into car industry subsidies.
“If Holden is to stay until 2022 under the deal with Labor, it needs to begin preparations straight after Christmas.”
Let’s call this for what it is: extortion.
Abbott took the most sensible approach into the election, refusing to sign blank cheques for the beleaguered automotive manufacturing sector. Now the real test: will he stand firm?