News Service from House Harris

Fed: Holden 'safe' in Aust, NZ in GM financial woes

MELBOURNE, June 2 AAP/AFP - Holden's Australian and New Zealand operations will remain unchanged despite its American parent, General Motors, filing for bankruptcy protection.

Holden's reprieve from General Motors' financial woes is great news for the more than 6,000 workers it employs in Australasia and the legions of suppliers that support its Australian manufacturing operations.

In a statement late on Monday night, Holden chairman and managing director Mark Reuss said Holden "will continue normal operations in Australia and New Zealand and does not expect changes to its business" after GM announced it had filed for bankruptcy protection.

The deal will give American taxpayers a 60 per cent ownership stake in the once mighty automotive giant.

Holden emerges unscathed but GM will close 11 of its plants and idle three others to slash jobs and operating costs.

Holden will also remain a part of the GM family, unlike GM's British Vauxhall and German Opel subsidiaries, which will be saved under a rescue engineered with support from a Canadian company and a Russian bank.

"Operations at Holden are unchanged in Australia and New Zealand, and we expect it to remain that way," Mr Reuss said.

"GM has clearly stated that all of its businesses in the Asia Pacific region - and that includes Holden - continue normal operations and are not directly impacted by this process in the US.

Holden was not affected by the chapter 11 bankruptcy proceedings GM was undergoing in the United States, Mr Reuss said.

"Holden is a subsidiary of GM but we are a corporate entity in our own right - an independent company under Australian law," he said.

Mr Reuss said GM would reform under bankruptcy protection with Holden "an important part" of the transition.

Leading the way will be the new small car, the launch of the four-cylinder Holden Cruze next month and the introduction of a locally-built four-cylinder car next year to revitalise sales in the wake of a big car slump that has affected sales of its Commodore range.

"We continue to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network," he said.

"We don't anticipate this decision will have any direct impact on Holden's workforce, dealers, or suppliers."

Holden has not made a profit in Australia since 2004 but its Commodore has been Australia's largest selling car since 1996.

The company received $149 million federal government grant to build a second car manufacturing line for its forthcoming small car, to be built at its Elizabeth plant in Adelaide's northern suburbs.

The company has built more than seven million cars since it began local manufacture in 1948.

Mr Reuss will front a media conference at Holden's Melbourne headquarters at 9am (AEST) on Tuesday.