RN Breakfast

21 Jan 2016 Transcipt

E&OE TRANSCRIPT
Radio National Breakfast with Fran Kelly
21 January 2016

SUBJECT: South Australian car industry.

Fran Kelly: The Australian car industry could have a future after all. Talks are underway with an automotive entrepreneur who wants to buy GM Holden’s South Australian plant, which is slated to close next year, bring the job loss of more than 1000 jobs. Industry Minister Christopher Pyne has written a letter of support for the Belgian businessman Guido Dumarey, who had some success in turning around the fortunes of an ailing French car plant that he bought back in 2013. Guido Dumarey says the plant’s prospects improved when Malcolm Turnbull replaced Tony Abbott as Prime Minister.

[Excerpt]

Guido Dumarey: I think that this complete new wave in the last months after the change of the Prime Minister, that the policy from Mr Abbott was different than the policy today. Judge me on the result, and give me a fair go. That’s it.

[End of excerpt]

Fran Kelly: That’s Guido Dumarey, speaking with motoring.com.

Well, Industry Minister Christopher Pyne joins us now. Minister, welcome back to Breakfast.

Christopher Pyne: Good morning Fran, it’s nice to be back.

Fran Kelly: You’ve been working a bit with Guido Dumarey, I understand, and his company Punch International on this plan to save the Holden plant in Elizabeth in Adelaide. What is his plan? What’s his proposal?

Christopher Pyne: Well it’s very early days Fran, and I think it’s important that people’s expectations aren’t too overheated. Guido Dumarey heads up a company called Punch Corporation. You’re right in your introduction, they did take over a General Motors factory in Strasbourg, in Europe, which was also slated for closure, and worked with General Motors to turn that factory around and save the jobs, which obviously we’d love to do here at Holden in Elizabeth. But a lot of things have to happen for that to work, and the primary one is that General Motors in Detroit have to decide that they want to sell it to Guido Dumarey’s business. And that is what I’m trying to help Guido with in terms of working with General Motors in order to make that happen.

Fran Kelly: And I understand you’ve written a letter of support for him, presumably trying to get GM on board. Any indication yet from GM whether they are interested in this at all, and if they do I mean presumably the selling price, given their long-term ownership, past ownership and investment in this plant, would be significant. How much would it cost to get it from GM?

Christopher Pyne: Well that’s a matter for Punch Corporation and General Motors to discuss. I mean, there are very significant costs to General Motors in reclaiming that site …

Fran Kelly: Right.

Christopher Pyne: … from obviously decades of being an industrial site as an automotive plant. Now, if they were able to come to an arrangement with Punch Corporation to take over those costs of course, it might start to become attractive to General Motors. So what I’ve done is tried to clear the way for Punch Corporation to meet with General Motors in both Australia and in Detroit, and I understand that has happened. And I think they are open to talking to them. Big corporations like General Motors in Detroit are not quick-moving, not agile and nimble like we want the Australian economy to be Fran, so therefore these things take time, and I think this will take time. But we’ve set a six month limit on that; that means about mid-year we would want to know the future for Punch Corporation and General Motors. But I am hopeful, but I am not getting over-excited because I don’t want the workers at Holden to have two sets of periods of grieving because their company- their factory is closing.

Fran Kelly: Yeah, and is there sort of a price to all this? We heard Guido Dumarey there saying all he’s asking for is a fair go. It’s going to take more than that of course. He’s planning- he says he’s willing to invest about $150 million, but there’s- I think you’d need government investment there or government backing as well. Is that what he’s asking for, and is there a plan for the Government to dig into what was the $800 million Automotive Transformation Scheme to back it up?

Christopher Pyne: Well Fran there’s a lot of confusion around the Automotive Transformation Scheme …

Fran Kelly: There is.

Christopher Pyne: … but let me clear it up, or try to clear it up. The Automotive Transformation Scheme is legislated until 2021, but it requires a car manufacturer to access it that produces 30,000 units or 30,000 vehicles a year. If there is a car manufacturer in Australia producing 30,000 units a year, the Automotive Transformation Scheme will continue to at least 2021, because that’s what the legislation says. The reason why people say the Automotive Transformation Scheme is coming to an end in 2017-18 is because that’s when the three car manufacturers – Toyota, Ford, and Holden – have said that they will be exiting Australia. So the reason that it’s forecast to end is because of that action on their part. If a car manufacturer continues, like for example Punch Corporation taking over the Holden plant, and they produce 30,000 units, which is what they propose to do, then they’ll be able to access the Automotive Transformation Scheme.

Fran Kelly: Right, okay. And therefore that would have a dent on the budget because the savings- proposed savings from the closure of that scheme have already been booked in the budget haven’t they?

Christopher Pyne: Yes, that would be a cost to the budget.

Fran Kelly: And how would the Government- given the troubles the budget already has, the Government’s prepared to look at that?

Christopher Pyne: Well it has to look at it Fran because that’s what the legislation provides.

Fran Kelly: Okay. So if it’s there…

Christopher Pyne: It’s not a question of looking at it really, it’s a question of…

Fran Kelly: It’s triggered by those 30,000 units.

Christopher Pyne: Exactly. It’s a consequence of a car manufacturer producing 30,000 units so the forecast would have to change.

Fran Kelly: So let’s look at that. What kind of units- apparently Guido Dumarey wants to keep building the Commodore plus other premium range vehicles. How does that work? Doesn’t General Motors own the Commodore? Would he be re-badging the Commodore?

Christopher Pyne: Well I guess that’s a matter for Punch Corporation and General Motors to negotiate. For example he might say to General Motors that they’ll produce the Commodore and maybe re-badge it as something different, but they might sell in the markets that General Motors doesn’t sell into. Now that would therefore you’d assume not present a problem to General Motors. But look I’m not a General Motors executive and I’m not a Punch Corporation executive but I’m very happy as the Minister for Industry if we can continue a car manufacturing business in Australia and of course I would do whatever I can to make that happen and that would start jobs and start growth.

Fran Kelly: And that would be great for your political fortunes in Adelaide too wouldn’t it?

Christopher Pyne: Well it would be great for the jobs of workers in Australia and for growth in the economy and of course the automotive industry has the important knock-on effects throughout the economy in terms of innovation and research and development, so I think anybody in the Government would like there to be a car manufacturing business in Australia, it just simply has to fit within the various programs that we already have, whether it’s the Automotive Diversification Program, the Automotive Transformation Scheme, The Next Generation Manufacturing Program. I mean there are- there’s lots of government support for the automotive sector and I have to say that there is actually a very rosy future for the automotive sector. Even with Ford leaving in Melbourne, they’re still leaving behind 1100 people in Ford who’ll be doing design and research for Ford International.

Fran Kelly: Okay. Just on this issue though you’ve said that you’ve put a six month timeframe on this, so the people of South Australia, the people of Elizabeth particularly will know before the next election almost certainly whether this is a goer or not.

Christopher Pyne: Well I understand that’s the timeframe that Guido Dumarey has put on his discussions with General Motors.

Fran Kelly: Okay. You’re listening to RN Breakfast. We’re speaking with the Minister for Industry, Innovation and Science, Christopher Pyne. Christopher Pyne, a couple of other issues; one in your home state of South Australia. The Premier Jay Weatherill has apologised to the husband of a British man who died here on holiday - they were on their honeymoon in fact. The death certificate issued in South Australia read never married because South Australian law doesn’t recognise same sex marriages performed in other jurisdictions. Is it time to change that law, not just in South Australia but everywhere?

Christopher Pyne: Well I haven’t studied that issue. I did see the story and I agree with Jay Weatherill that that is outdated and anachronistic and I think it’s offensive to the man involved obviously. I agree with him about that.

Fran Kelly: On another issue; Tony Abbott’s future still a little unclear. He’s reportedly indicated to local branch members that he’s going to stay on in Parliament. He hasn’t made it clear yet but I’ll guess he’ll have to soon because pre-selections are occurring now. If he stays and there is a reshuffle going to happen sometime early in this year, it has to happen, does Tony Abbott deserve a Cabinet position?

Christopher Pyne: Well Fran that’s a matter for Malcolm. I mean it is - the Government is going very well. The team is working very well together…

Fran Kelly: But there’s some holes in the team. There are going to be some new members anyway.

Christopher Pyne: Well I’m not sure that’s necessarily the case. I mean Jamie Briggs’ position is obviously available…

Fran Kelly: Mal Brough’s position is empty.

Christopher Pyne: Mal Brough has stood down as opposed to no longer holding the position to the future until his matters are cleared up.

Fran Kelly: And possibly Warren Truss will announce his retirement.

Christopher Pyne: Apparently, possibly, but I see different stories in the paper. Some of them say that Warren Truss is intending to stay, some say that he’s intending to retire. He’ll need to make that clear at some stage over the next month or two I suppose. But the team is working well and the Government is travelling well because we’re focusing on the things the Australian public want us to focus on and I think Malcolm is demonstrating a very clear grasp of the role of Prime Minister. Now, whether you want to - we want to change that to a significant reshuffle, I think is a moot point, but that’s a matter for the Prime Minister to decide. I hope Tony Abbott decides that he wants to stay in politics because I think he’s a great advocate for the non-Labor side of politics and the more good advocates we have the better.

Fran Kelly: Minister, thank you very much for joining us.

Christopher Pyne: It’s a pleasure Fran.

Fran Kelly: Christopher Pyne, he’s the Minister for Industry, Innovation and Science and he’s a very active South Australian too when it comes to policy matters. He’s also leader of the Government in the House.

[ends]