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GM Warns it May Abandon Australian Operations

Maker may Cruze elsewhere.

by on Jun.28, 2011

GM warns it could end production of the Holden Cruze without financial aid from the Australian government.

General Motors’ long-standing manufacturing base in Australia could be in jeopardy, the maker warned, unless the government comes up with substantial new financial incentives.

If that happens GM would follow a long list of makers that have ruled it too expensive to continue automotive production in the island nation.  The U.S. maker previously abandoned efforts to ship products from Australia to North America.

“We’ve just starting building Cruze here and over the next 12 months or so we’ll have to make a decision on the next generation of that product,” Mike Devereux, managing director of GM Holden, told the newspaper The Australian.

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The current version of the Cruze was approved by GM’s Holden subsidiary only after the government approved a $149 million package of incentives from its Green Car Innovation Fund.  But that program is being phased out, a government official telling the paper it has “run its course.”