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Legislative Council - Fifty-Second Parliament, Second Session (52-2)
2012-04-04 Daily Xml
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GM HOLDEN

The Hon. G.A. KANDELAARS (15:35): Today I rise to speak on the recent announcement of the federal and state governments of South Australia and Victoria to co-invest $275 million in GM Holden. South Australia's contribution to the co-investment will be $50 million. In my view this co-investment is very sound, given that GM Holden will invest over $1 billion in car manufacturing in Australia and has given a commitment to make two next generation vehicles here. These vehicles will be using the latest technology, so they will be cheaper to run and better for the environment.

The partnership between GM Holden and the federal government and state governments will see automotive manufacturing in Australia to least 2022. This is great news for South Australia and, more particularly, for those who work for GM Holden at Elizabeth. It is not only that 2,700 people who work directly for GM Holden will heave a collective sigh of relief, but also all those who are indirectly employed in South Australia as a result of the automotive manufacturing remaining in this state.

In a recent report to the South Australian Department of Manufacturing, Innovation, Trade, Resources and Energy, Associate Professor Barry Burgan, head of the Business School of the University of Adelaide, reported:

In summary, therefore, the closure of Holden would, it has been estimated, cause the loss, relative to contribution in 2011 of between 6,000 and 16,000 jobs in the state, reduce the value of economic activity between $0.5 billion and $1.5 billion, and cause a decline in state taxation revenue of between $25 million and $83 million. Given the current economic conditions, and competitive circumstances in the manufacturing sector, it would be considered that the higher of these estimates is a distinct possibility.

As you can see, the loss of car manufacturing at GM Holden at Elizabeth would have had a serious impact not only on jobs in South Australia—as many as 16,000 could be lost—but also on economic activity in the state. The impact of the GM Holden closure would have been felt disproportionately in the northern Adelaide suburbs, but it would not stop there.

In the Burgan report it was pointed out that suppliers to Holden would also be severely affected. Information by Holden indicates the core supplier base supporting the Elizabeth facility with parts and components in the manufacturing process is as follows:

$528 million per annum supplied by 29 suppliers based in South Australia;

$197 million per annum supplied by 70 suppliers based in Victoria; and

$11.5 million per annum supplied by 16 suppliers based in New South Wales.

The report goes on to list a number of large employers in tier 1 suppliers to GM Holden, such as:

The Tenneco Australia Group (Monroe and Walker) with 690 employees;

Toyoda Gosei, 297 employees;

SMR Automotive, 450 employees;

Futuris Automotive Group, 320 employees.

Tiers 2 and 3 suppliers include:

Intercast and Forge, 250 employees;

Excide, 230 employees; and

Alloy Technologies.

There are many more. In his report on manufacturing into the future, the respected thinker in residence 2010-11 Göran Roos had this to say:

The South Australian manufacturing sector is moving into a technological environment of boundless promise and unprecedented challenge. In order to emerge as a strengthened global player making a vital contribution to the South Australian economy, it is essential that the sector be encouraged to grasp these new opportunities.

I believe the federal and state governments' decision to co-invest in GM Holden is the right decision. It is an economically sound decision, given the important role automotive manufacturing plays in the South Australian economy and for that matter the mainstream economy.

Time expired.

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