Struggling auto maker General Motors (GM) was handed with Aus$275 million (US$287 million) subsidy assistance by Australian government to keep its Australian car plants open. The rescue mission will definitely save the financial crunch for GM for the next 10 years.
In return GM, Holden an Australian subsidiary, agreed to pump-in over Aus$1 billion into vehicle manufacturing in Australia. And producing next-generation cars at its plant in southern Adelaide. Announcement by the Australian government was made after the threat of Holden to shut its Australian plants as the industry was suffering from the effects of a high Australian dollar, rising production costs and faltering domestic sales.
Prime Minister Julia Gillard said that the agreement would see Holden to continue to make cars in Australia at least till 2022. “The high Australian dollar and strong competition from other countries in our region are putting strain on our automotive industry, and GM Holden had considered closing its entire design and manufacturing operations in Australia,” commented Julia Gillard. Adding that Holden estimated of the new subsidy package would return as Aus$4 billion to the Australian economy.
The move was extended by the Australian government at the height of the global financial crisis and ailing auto industry in the country.
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