The Gillard, Weatherill and Baillieu Governments today announced a $275 million co-investment in the future of GM Holden's car making operations in Australia.
In return for this investment, Holden has agreed to inject over $1 billion into car manufacturing in Australia, and to make two next generation vehicles here that will be cheaper to run and better for the environment.
This partnership will see GM Holden continue making cars in Australia until at least 2022.
The high Australian dollar and strong competition from other countries in our region are putting strain on our automotive industry, and GM Holden had considered closing its entire design and manufacturing operations in Australia.
Through hard work and extensive negotiations we have struck an agreement that will see the company maintain a strong manufacturing presence in Australia for at least 10 more years.
The Prime Minister said the Federal Government's contribution would be $215 million, funded under the existing $5.4 billion New Car Plan for a Greener Future.
This funding is not a hand-out - it is a strategic investment that will boost our economy, foster innovation, build new business opportunities and promote adoption of new fuel-saving and safety technologies.
Holden has estimated that the new investment package will return around $4 billion to the Australian economy.
Most importantly, this co-investment will support thousands of jobs at Holden that would have been lost if the company had stopped making cars in Australia.
It will also support thousands of secondary jobs in key automotive component manufacturers who supply parts to GM Holden, many of which are in regional Australia.
The automotive industry employs 55,500 people across every State and the ACT and supports around 200,000 additional jobs nationally.
With a shift to global car platforms there will be increased pressure on Australian component manufacturers - but there will also be opportunities for these firms to win new business in global supply chains if they are competitive.
As part of the agreement, Holden will create a new Suppliers' Working Group to help Australian suppliers sell into its world-wide supply chains.
Additionally, the Gillard and Baillieu Governments will provide an extra $35 million for the Automotive New Markets Initiative, a new program to help firms in the automotive supply chain move into export markets and supply their products to other industries, with a Federal contribution of $25 million.
The pressures on the automotive sector are likely to see restructuring in the coming period which is why the Government will also provide $15.6 million to extend the labour market element of the Automotive Industry Structural Adjustment Program to provide training and employment services for workers leaving the auto sector.