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Holden's cash contribution to state down since offered $275m rescue deal

Tuesday, 15 October 2013
Author: Daniel Wills, State Political Editor, AdelaideNow

HOLDEN'S economic contribution to the state has declined sharply since it was offered a $275 million rescue deal but up to 13,000 jobs remain at risk if it closes, analysis shows.

Two of the state's leading academics have updated a key report into the company's operations which has been used by the State Government to help make the case for further handouts.

It finds cost cutting and job shedding at Holden since 2011 have lessened the worst case scenario impact of a shutdown on employment, state tax revenue and economic activity.

Torrens University Australia business professor Barry Burgan and Australian Workplace Innovation and Social Research Centre executive director John Spoehr have found a Holden closure would cost the state between $350 million and $1.2 billion in economic activity.

That is down from between $500 million and $1.5 billion modelled in their 2011 report.

The State Budget is expected to take a hit of between $20 million and $70 million per year if the carmaker quit Adelaide tomorrow, reduced from a range of $25 million to $83 million.

The updated paper also predicts job losses of between 4300 and 13,000 at Holden and companies that rely on it, down from earlier predictions of between 6000 and 16,000.

Professor Burgan said closure would likely deliver results close to the high end of the modelling.

"It comes down to whether the supplying industries would be able to find alternative contracts for what they do," he said.

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Associate Professor John Spoehr (email)
Executive Director
Australian Workplace Innovation and Social Research Centre (WISeR)
The University of Adelaide
Business: (08) 8313 3350

The Advertiser (email)
31 Waymouth Street
Adelaide 5000
Business: 1300 130 370

Associate Professor Barry Burgan (email)
Head of the Business School
University of Adelaide
Business: (08) 8313 4756