Australian Car Maker GM Holden Gets Offer for $710 Million from Government

Aug. 9, 2009
Holden employs more than 6,000 workers in southern Australia and New Zealand, and exports account for 50% of its earnings.

Australia saidon August 8 it had extended a 200-million-dollar (US$170 million) lifeline to car maker GM Holden following the bankruptcy of General Motors.

Industry Minister Kim Carr said the credit, which had not yet been drawn upon by Holden, was agreed a month ago as part of a broader effort to save more than 200,000 jobs in Australia's automotive sector.

The Export Finance and Insurance Corporation (EFIC), the government's export credit agency, said Holden was an "iconic Australian company" which deserved full support.

"The facility has been put in place to provide support for GMH exports of vehicles, parts and engineering services to Europe, the Middle East, Africa and Asia, as the Australian manufacturer establishes stronger market links under the newly created General Motors Company," EFIC said. "The secured line of credit of up to 200 million (dollars) has been agreed but not drawn and is subject to commercial terms and conditions," it added.

Holden spokesman Scott Whiffin said the company had not yet drawn a single dollar from the credit line and it would do "everything we can not to."

Its executives in March agreed to take a 10% pay cut, saying the global financial crisis had left it grappling with some of the worst market conditions in living memory.

Canberra has already offered Holden 179 million dollars in subsidies to build an environmentally friendly "green car."

Holden employs more than 6,000 workers in southern Australia and New Zealand, and exports account for 50% of its earnings. Despite making Australia's best-selling car, the Commodore, it has not turned a profit since 2004.

Copyright Agence France-Presse, 2009

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