The future of car maker Holden is in the hands of the federal government which must act quickly if it wants to save the company, South Australian Premier Jay Weatherill says.
The car producer recently put a proposal for ongoing government assistance to the commonwealth and Mr Weatherill says the longer the government takes to respond the greater the risk of the company closing its manufacturing operations.
“Every day they delay their response, the risk of Holden closing increases,” Mr Weatherill told reporters on Saturday.
The future of the car producer also became more complicated on Friday when chairman and managing director Mike Devereaux announced he was leaving at the end of the year to take up a senior position with General Motors in China.
His replacement is yet to be named.
Mr Weatherill said he had indicated to Mr Devereux that he was disappointed by his decision because he saw him as a strong advocate of Holden staying on in Australia.
But he said the key now was the federal government’s response to the company’s proposals.
“The ball is in their court. It’s now for them to respond,” Mr Weatherill said.
“Delay is only going to increase the risk of Holden closing.”
Holden warned recently that it needed to cut costs and receive continued government assistance for its Australian factories to remain viable.
Last year, it reached an agreement to receive $ 275 million in state and federal funding to develop and build two new models from 2016.
But it is now thought Holden needs more money to commit to its plans, possibly as much as $ 500 million.
Federal Industry Minister Ian Macfarlane recently met Mr Devereux in Adelaide and says he will do whatever he can to ensure Holden’s future.
But he says he doesn’t have a bag of money to throw at the company and will press ahead with plans for a productivity commission review of the car industry.
An interim report from the commission is possible before Christmas, but that still looks likely to push any final decision on Holden’s fate into the new year, after the departure of Mr Devereux.