There are fears that a Holden ending its manufacturing operations in Australia would lead to a recession in Victoria and South Australia.
Some have said that the decision by managing director Mike Devereux to accept a promotion to parent company General Motors’s consolidated international operations in China is a sign that Holden is preparing to quit Australia.
Yesterday Jay Weatherill, the premier of South Australia – where Holden employs 1,700 workers – admitted the situation was “dangerous”.
There are fears about the flow-on effects for South Australia and Victoria (the latter employs 25,000 automotive workers) in the components sector and elsewhere.
"The knock-on effects would be massive, perhaps enough for a recession in the southern manufacturing states,'' an unnamed MP told Fairfax.
Fairfax also reports that research by Deloitte Access Economics to be released today shows business investment outside of the mining sector at the lowest level since 2008.
The Coalition repeatedly stated before being elected that it planned to reduce planned automotive subsidies by about $500 million, though has been in talks with Holden about possible assistance to the troubled car maker.
"I don't think it's to Holden's advantage that they've done this, but this is their decision," industry minister Ian Macfarlane told News Corp after Devereux’s overseas appointment was revealed.
"It is disappointing that it has come in the midst of what is going to be a fairly challenging time for the car industry in Australia, in terms of my attempt to put in place some kind of long-term strategy for the industry."