GM-owned Holden’s future up in the air

The Australian government will decide whether to inject more money into General Motors’ troubled Holden division in February of next year at the latest.

The decision will be heavily influenced by a report that will shed light on how long Holden can continue to turn a profit by building cars in Australia.  The automaker received $275 million (roughly $256 million) in government aid a year and a half ago in order to secure its future through 2022, but the automaker’s top executives say they urgently need more money because market conditions have changed.  Ian Macfarlane, Australia’s federal industry minister, hinted a second cash injection would most likely be the last.

Failure to obtain money from the government might lead parent company GM to shutter the division and lay off about 1,700 blue collar workers, putting an end to American auto manufacturing in Australia. Â

Once one of the biggest Australian automakers, Holden has seen its profits and its share of the local market drop steadily over the past decade as sales of cheaper imports have been on the rise.  Government statistics indicate 80 percent of cars sold new to private buyers in Australia are imported into the country.  

Holden’s demise would have little impact on GM’s global operations as its lineup is a cocktail of re-badged Chevrolets such as the Spark, the Cruze and the Volt and larger brand-specific vehicles like the Ute, the Commodore and the Sportwagon.  The brand-specific cars are sold exclusively in Australia with the exception of the four-door Commodore, which will land in Chevrolet showrooms wearing the SS nameplate in the coming months.

Plagued by similar problems, Ford announced last March it will stop building cars in Australia towards the end of 2016 and kill off the iconic Falcon.  <![CDATA[
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