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 GM, the world's second-biggest auto maker, said last week it would
end vehicle and engine manufacturing in Australia by the end of
2017, dealing a severe blow to the country's auto sector and
manufacturing future. The U.S. auto maker cited high costs, a strong
Australian dollar and a small, fragmented and highly competitive
domestic market as reasons for its decision.
Prime Minister Tony Abbott is launching the fund and related
programs as a way to help transition the country from heavy
industrial manufacturing to "higher value-added" production, other
than just subsidies.
"In the end, no government has ever subsidized its way to
prosperity," Abbott told reporters on Wednesday.
"This government will be very loathe to consider requests for
subsidies. We will be very loathe to do for businesses in trouble,
the sorts of things that they would be doing for themselves."
The fund will include A$60 million in contributions from the
Australian federal government and A$12 million from the Victorian
government, with the South Australian government contributing the
remainder. Abbott said the government also expected GM to make a
contribution.
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Workers affected by GM Holden's closure will be able to access some
support, while the fund will also help existing components
manufacturers in Victoria and South Australia, along with other
manufacturers and research initiatives.
($1 = 1.1250 Australian dollars)
(Reporting by Maggie Lu Yueyang; editing
by Jacqueline Wong)
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