In this undated file photo released by General Motors Co., a Holden Cruze hatch is driven off the assembly line after it was manufactured at a plant in Australia. General Motors Co. said Wednesday, Dec. 11, 2013, it will stop making cars and engines in Australia by the end of 2017, with nearly 2,900 jobs to be lost, because of high production costs and competition. GM’s Australian subsidiary Holden once dominated Australian auto sales, but lost market share to imported cars. AP
CANBERRA, Australia—General Motors Co. said Wednesday it will stop making cars and engines in Australia by the end of 2017 because of high production costs and competition.
About 2,900 jobs would be cut over the next four years, in South Australia and Victoria states, GM said.
GM’s Australian subsidiary Holden once dominated Australian auto sales, but had lost market share to imported cars. Ford Motor Co., once Holden’s major rival in Australia, announced in May that it was ending production in the country in 2016. Toyota is the only other auto manufacturer in Australia.
GM’s announcement has been anticipated for months. The Australian government has been under mounting political pressure to offer increased subsidies to the company to keep it manufacturing in Australia for the sake of the auto parts industry.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the industry faces in the country including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” GM’s chief executive Dan Akerson said in a statement.
Holden would become a sales company, he said.
The announcement was made the same day GM announced that Akerson will be replaced by Mary Barra on January 15.
Australian chairman Mike Devereux said the priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.
“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” Devereux said in the statement.