Job cuts at Holden see automotive subsidy debate re-open

The level of government support given to Australia’s auto industry has been defended after Holden announced that it was making 500 positions redundant, a quarter of its workforce.

Holden announced yesterday that it would cut 400 roles at its Elizabeth, South Australia plant and 100 engineering jobs in Victoria due to what chairman Mike Devereux described as “historic structural changes”.

The news came a week after Devereux disclosed the amount of assistance Holden had received over the past 12 years, worth $2.2 billion, and two months before Holden launches its VF Commodore.

"By international standards, our support for the industry is very modest," Kim Carr, the former industry minister, told the ABC. He noted that $17.80 per person is spent on the automotive industry in Australia, compared to $90 in Germany and $264 in the United States.

The Australian Industry Group’s Innes Willox explained the support for the country’s auto makers.

''You would not give up your auto industry without a fight because of all the broader benefits it brings to the national economy,'' he said in comments reported by Fairfax Media.

The Coalition targeted the lack of a guarantee of job protection being attached to subsidies given to car-makers.

“Why has Labor made $249 million available to Holden and Ford with no transparent criteria and without asking for any guarantees about jobs?” asked federal opposition industry spokeswoman Sophie Mirabella in a statement.

Simon Cowan from pro-free market think tank the Centre for Independent Studies was critical of the support received by Holden.

"If you take about 4,000 employees, which is where they are now roughly, that's about $45,000 an employee," Cowan told the ABC.

"After the loss of these 400 to 500 staff that then rises to more than $50,000 of subsidy per employee. It's quite a large sum of money."