GENERAL MOTORS CORPORATION

Mr O'BRIEN (Napier) (15:29): Yesterday, Australian time, General Motors Corporation presented its eagerly anticipated restructure plan to the US Department of The Treasury as required under the Loan and Security Agreement of 31 December. The plan has the intent of placing General Motors in a position of profitability, self-sustainability and competitiveness by the year 2014. The plan restructures the company's business in the US by concentrating on GM's three strongest global brands (Chevrolet, Cadillac and Buick) and its premium truck brand (GMC); by restructuring its resale distribution channel; by basing the product plan on fewer, better entries; and by continued commitment to be a quality leader.

The plan also sets out the intent of GM to pursue accelerated restructuring of its Canadian, European and certain Asia-Pacific operations. Australia is not lumped under the Asia-Pacific heading and, on my reading of the plan, has escaped relatively unscathed from the significant restructuring that will take place in Canada, Sweden, Europe, India and Thailand. I will read the section of the plan that deals with Australia directly into Hansard because it clearly indicates the effectiveness of the Rudd and Rann governments' green, small car funding initiative, as far as decision-makers in Detroit and Washington are concerned.

To refresh the memory of members, I point out that on 22 December the Prime Minister, Kevin Rudd, announced that the federal government would commit $149 million dollars to a second line at Elizabeth, and Premier Mike Rann committed the South Australian government to a $30 million contribution. The second line will produce a small, energy-efficient vehicle for the domestic and export markets. Now to quote the General Motors Corporation Restructuring Plan, as follows:

Australia—continued local production has become more challenging due to the changes in market preferences. GM's local subsidy (Holden) and the Australian government have developed a plan to bring to market a new, more fuel-efficient vehicle, with project funding provided by the Australian government in the form of permanent grants. With this support, Holden is projected to be a viable operation, making a positive NPV contribution.

To reiterate, 'With this support'—commonwealth and South Australian government support—'Holden is projected to be a viable operation.'

This is the view from Detroit. In Canada, by contrast, if agreement cannot be reached with governments—both federal and state—and unions, General Motors will be required to re-evaluate its future strategy for GM Canada as the subsidiary would, in the words of the plan, 'not be viable on a stand-alone basis'. In Sweden, Saab has been offered for sale. In Europe, GM seeks to reduce costs by $1.2 billion through several possible closures or spin-offs of manufacturing facilities. In Thailand, two sizable manufacturing expansion plans are suspended indefinitely, and expansion plans in India will be reconsidered.

Australia is the only—and I stress 'only'—part of the globe under the plan announced yesterday where projects are not being shelved, plants closed or assets divested. It all comes down to the timely intervention of the Rann Labor government and the Rudd Labor government. The political will was there; the funding model had been worked up to a high degree of preparedness as a result of the Bracks review of the auto industry; and the senior level links between Holden, the components sector, the trade union movement, and South Australian and commonwealth Labor politicians were such as to provide a proactive rather than reactive response.

This brings me to my final point. Although the long-term future of Holden is secure, there may be difficulties over the coming months in relation to full-time employment within Holden. I know many workers at Holden are already under financial stress and this may intensify. Some workers are struggling to meet mortgage repayments. I ask the banks to exercise a high degree of forbearance and to actively assist workers through a difficult period.