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PETER CAVE: The car industry is hopeful the decision by Holden's parent company to end production
of the G8 Pontiac won't mean job losses in Australia.

Holden's Elizabeth plant in South Australia makes more than 30,000 of the cars for the US market.

But Holden doesn't believe it will have to shed jobs because of the decision.

The car industry body, the Chamber of Automotive Industries, says the decision is a reflection of
the restructuring in the US industry.

But the Chamber's chief executive Andrew Mackellar has told our chief political correspondent
Lyndal Curtis the move is not necessarily a negative for Holden.

ANDREW MACKELLAR: Well, it will mean that their export plans to the US will be affected in some
measure but what we know is that Australian car-makers are certainly world competitive. They have
demonstrated that time and time again and no doubt Holden and the other local car-makers will
continue to look for new export markets to replace anything that comes out of this decision.

LYNDAL CURTIS: Do you know how many of the cars Holden is exporting to the US?

ANDREW MACKELLAR: Well, I think it has been useful numbers. I think, so far, it has resulted in
exports of around 30,000 to 40,000 additional vehicles since the program commenced last year so
that has been a valuable contribution.

It won't be ending overnight and it will give the company time to look for other new markets.

They have also announced that they will be introducing a second car line in Adelaide, a small car
to be produced in Adelaide from late next year as well, so that is a positive that the industry can
take considerable heart from.

LYNDAL CURTIS: So it may mean that even if Holden can't replace the exports to the US with exports
to other countries, it can still maintain its workforce by introducing the second car?

ANDREW MACKELLAR: Well, certainly that is what they have indicated, that there won't be any job
implications out of the announcements coming out of the US overnight. They have already positioned
themselves for these sorts of eventualities. Going to one shift, that was announced earlier this
month but they've done that without the loss of any jobs which is a significant achievement and
they have been able to do that through operating and understanding with their workforce and with
the unions in Adelaide.

LYNDAL CURTIS: Although it would be a difficult time to try to look for replacement export markets
given much of the world is in an economic slowdown, as some major markets are in recession. Hard to
look for new markets then at this time or in a year's time to start selling the cars to?

ANDREW MACKELLAR: Well, look that's true. There are many other markets around the world that are
just as affected. In fact the Australian market, of any around the world, has been less affected
than most so that is a positive but they will be looking for new export opportunities.

They have shown that they are at competitive even at much higher exchange rate levels so I think
there will be new opportunities there in the future.

LYNDAL CURTIS: Given the troubles that the US car manufacturers are in, can Australia expect to see
some flow on effects from that over the next say two or three years?

ANDREW MACKELLAR: Well, they are obviously very much linked with their global parents and they are
working through some very challenging issues at the moment but I think all the indications are that
the Australian car-makers are well regarded, they are well positioned within their global
operations and we would expect that they will maintain that ranking as a result of the processes
that are currently underway.

LYNDAL CURTIS: In the context of the Budget preparations, Access Economics has called on the
Government to target middle-class welfare and to look at not only programs affecting people but
also things like industry support. Do you think there is any case for the Government to wind back
industry support in order to help bring the Budget back into surplus quicker?

ANDREW MACKELLAR: Certainly not. Look, the policy arrangements that were announced by the
Government late last year, the new car plant, that has already yielded immediate dividends for the
industry.

What it has done, it has secured new investment in the Australian industry. Three significant
decisions: the small car to be produced by Holden in Adelaide, the Toyota Hybrid Camry and Ford's
decision to reverse its closure of the Geelong engine plant. All of those things have occurred as a
result, as a direct result of the policy arrangements that the Government has put in place.

So it is supporting new investment, it is supporting jobs and the industry and without those policy
arrangements those things would be lost to Australia.

LYNDAL CURTIS: But if the Government is having to trim in other places, shouldn't industry also be
prepared to take a hit if necessary?

ANDREW MACKELLAR: Well, the point is that it is bringing benefits to the Australian economy so you
wouldn't want to close off those benefits to the Australian economy.

PETER CAVE: And that was Andrew Mackellar from the Chamber of Automotive Industries speaking to
Lyndal Curtis.