Australia PM Seeks Toyota Talks to Save Car Industry

Australia PM Seeks Toyota Talks to Save Car Industry

The government is  considering giving Toyota state funding that had been earmarked for  GM's Holden, which will close in 2017.

SYDNEY -- Prime Minister Tony Abbott on Thursday sought talks with Toyota (IW 1000/8) to persuade the Japanese giant to keep its plants open and prevent a collapse of Australia's car manufacturing industry.

Abbott acted after General Motors on Wednesday announced its Holden offshoot will cease manufacturing in Australia by 2017 after 65 years, prompting Toyota to warn it too was in peril as unions said the car industry was finished.

With Mitsubishi closing its Adelaide plant five years ago and Ford halting vehicle production at its unprofitable Australian operations in 2016, Toyota will be the only company left making cars in the country.

Abbott said he had spoken to Toyota's Australian boss Max Yasuda.

"Obviously the government will be talking to Toyota," he told Channel Nine television. "We want Toyota to continue.

"They are in a slightly different position to Holden.

"Much more of their local production has been for export. Toyota locally have been much more integrated into the global operations of the company, it seems, than with Holden."

Holden's decision to move to a national sales company, costing 2,900 jobs, was blamed on the sustained strength of the Australian dollar, high production costs and a small and competitive domestic market -- similar to the reasons given by Ford.

"Holden have been sending signals for some time that there were difficulties, and look, this is tragic, it really is," Abbott said. "This is the last thing anyone wants."

"We want to be a country that makes things and we want to keep the motor industry in this country, but as the head of Holden said yesterday, they have been hit by a perfect storm: a high dollar, high costs and small markets."

Unions have warned of a multi-billion-dollar hole in the economy and the loss of up to 50,000 automotive industry-related jobs if car manufacturing in Australia ends altogether.

Because car parts and components were manufactured nationwide there would no corner of Australia untouched by Holden's decision, said opposition finance spokesman Chris Bowen.

"The loss in tax revenue, the unemployment payments right across the board, will see Australian government revenues hit, and potentially hit hard," he said.

Toyota said on Wednesday that Holden's decision would place "unprecedented pressure on the local supplier network and our ability to build cars in Australia."

"We will now work with our suppliers, key stakeholders and the government to determine our next steps and whether we can continue operating as the sole vehicle manufacturer in Australia," it said.

Toyota employs around 4,200 people in Australia with its main factory in Melbourne.

Victoria Premier Denis Napthine was to meet Abbott on Thursday and said his state would need "a substantial amount of money" to help Holden workers retrain and to create new jobs.

He told reporters he was considering giving Toyota state funding that had been earmarked for Holden, and urged Abbott to do the same.

"I certainly will be pushing the federal government for cooperative helpful discussions with Toyota," Napthine said.

Copyright Agence France-Presse, 2013

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