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Holden says no decision yet on quitting Oz

SYDNEY--Struggling automaker Holden said Tuesday it needed long-term government support to remain in Australia, following a report that its U.S. parent General Motors had decided to close the unit's two plants in the country.

However, while there remains uncertainty about the future of the firm's manufacturing in Australia, Holden said it had made no decision.

The Wall Street Journal, citing people close to the plans, reported on Monday that GM intended to shut down its two Australian factories, while also slashing output in South Korea, as part of a plan to weed out its unprofitable operations.

The move would be a blow to the country's car industry after U.S. giant Ford said in May — it would stop making vehicles at its unprofitable Australian factories in 2016, with the loss of 1,200 jobs, and bringing an end to an era that began in 1925.

“We need a public/private partnership over the long term to be able to be relatively competitive and to have GM be able to do what it wants to do which is build where we sell,” Holden chief executive Mike Devereux told reporters after appearing at automotive Productivity Commission hearing.

He told the commission, which is investigating subsidies to the automotive sector, that manufacturing in Australia was more expensive than elsewhere in Asia.

Should Holden, which has a 10.3-percent market share in Australia, cease manufacturing it would leave only Toyota Australia — which employs more than 4,000 workers — making cars in the country after Ford's exit.

Mitsubishi closed its Adelaide plant five years ago, and the government must now decide whether to continue its assistance to the industry, on which some 50,000 jobs rely.

The government has said it supports Holden remaining in Australia, but Treasurer Joe Hockey on Monday told parliament the carmaker's future was dependent on the sale of its vehicles.

Australia's auto industry has struggled against a high dollar for years and Canberra extended a AU$3.2 billion bailout to the sector at the height of the global economic downturn.

The productivity commission is due to report to the government in March.

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