Car bailout may not save Holden

Treasurer Chris Bowen has confirmed Labor will announce a new car industry support package. Source: AAP

THE federal government's $200m auto industry aid package may not be enough to guarantee the survival of the nation's most iconic car maker.

Industry Minister Kim Carr announced the bailout on Monday, although his government has yet to detail how the money will be distributed.

Along with new funding, the federal government plans to ensure 100 per cent of the commonwealth passenger car fleet is Australian made, boosting sales by 18,000 a year.

But Holden boss Mike Devereux said the company will wait until after next month's federal election before making a decision on a vital investment of its own in its Australian operations.

Holden, which earlier this year announced it would cut 500 jobs, is talking with unions about an enterprise agreement to hopefully save $15 million a year.

Mr Devereux said a decision on Holden investing $1 billion in Australia to develop two new cars will be finalised after talks with whichever party wins the September 7 election.

"We would need to wait until, frankly, the outcome of the election to be able to commit that $1 billion investment," Mr Devereux told reporters.

"Because it's such a long time period. We're talking about investments that will take us out beyond 2022 now to 2023."

Unions say that regardless of the federal funding, Holden would still close its doors if the enterprise agreement is rejected by workers.

Australian Manufacturing Workers Union South Australian state secretary John Camillo said if the workers rejected the plan, Holden had made it clear the assembly operations in Australia would close from 2016.

He said the company required both the new enterprise agreement and the federal government's financial support to continue as a local car producer.

"The workers will make a decision and if it's a no, the company will close," Mr Camillo said last week.

Australian Chamber of Commerce and Industry chief economist Greg Evans, meanwhile, called on the car industry to "stand on its own two feet."

"The government is not doing the car industry any favours with various tax changes," Mr Evans said.

Opposition Leader Tony Abbott said it was scandalous Labor couldn't say exactly what the $200 million would be used for.

"They throw taxpayer money around like confetti," he told reporters in Brisbane.

"I have more respect for your money than to make blank cheques to industries which, let's face it, have been very good at using taxpayers' money but haven't always been that good at maintaining production and jobs."

The announcement of the auto industry bailout coincided with another from Toyota that it will invest $123 million in its Australian manufacturing operations with the federal and Victorian governments contributing to the package.

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