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General Motors to close Australian plants by 2017

SYDNEY--Auto giant General Motors said Wednesday it will close its Holden plants in Australia by 2017, prompting Toyota to review its operations as unions warned the car industry was finished.

Holden's decision to move to a national sales company, costing 2,900 jobs, comes after Ford said in May it would stop making vehicles at its unprofitable Australian factories in 2016, with the loss of 1,200 jobs.

With Mitsubishi closing its Adelaide plant five years ago, only Toyota Australia — which employs more than 4,000 workers — will be left making cars in the country.

Even that appeared uncertain, with the Japanese auto firm immediately announcing a review of its own position in Australia.

“This will place unprecedented pressure on the local supplier network and our ability to build cars in Australia,” Toyota Australia said in a statement about Holden's closure.

“We will now work with our suppliers, key stakeholders and the government to determine our next steps and whether we can continue operating as the sole vehicle manufacturer in Australia.”

The Australian Manufacturing Workers Union said it expected Toyota to follow Holden's lead.

“It's now highly likely that Toyota will leave Australia. In fact it's almost certain,” AMWU national vehicles division secretary Dave Smith told reporters.

“It's a very bleak day indeed.”

GM chief Dan Akerson said the decision to shutter Holden's Australian operations reflected a “perfect storm of negative influences the automotive industry faces in the country.”

“This includes the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” he said.

Holden, maker of the iconic Commodore car, said 2,900 jobs would be axed over the next four years — 1,600 from its Elizabeth vehicle manufacturing plant in Adelaide and approximately 1,300 from Holden's workforce in Melbourne.

It spells the end of a long association with Australia. The company began as a saddlery in 1856 and first started manufacturing cars locally in 1948.

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