General Motors to halt production in Australia

GM subsidiary Holden is set to stop production in Australia by the end of 2017

General Motor's new chief executive Mary Barra (GETTY IMAGES)

US car giant General Motors has announced it is pulling out of Australia, prompting warnings that Toyota will follow suit.

Holden — a subsidiary of GM, which yesterday named Mary Barra as its new chief executive and the first female boss of a US car maker — said it will stop production in Australia by the end of 2017, blaming the high manufacturing costs there as one of the reasons. It also blamed the strength of the Australian dollar as well as the size of the domestic car market.

“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country,” said outgoing GM chief executive Dan Akerson, who will be replaced by Barra next month.

Nearly 2900 jobs will be hit, and the Australian Manufacturing Workers’ Union claimed the exit means Toyota — who, with Ford also due to halt work, would be the only remaining car maker in the country — could follow.

The Japanese giant is now “highly likely” to end production in Australia, said a union official Dave Smith, who added it “will spell the end of 50,000 automotive jobs”.