Jobs at General Motors Holden remain at risk as the company warns it is considering ''tough decisions'' at its Australian operations in coming weeks.
The comments come in the wake of news that Holden's parent, General Motors, plans to slash 47,000 jobs and close plants by the end of the year as it seeks a larger bail-out package from the US government.
''We are actively looking at all aspects of the business and will be making some decisions - some of them tough decisions - in the coming weeks in terms of our structure and operations,'' said Holden's national media relations manager Scott Whiffin.
Mr Whiffin said Holden's outlook remained challenging with shrinking local and export markets affecting sales volumes and manufacturing schedules.
''Holden is actively working on a series of initiatives that will see us contribute meaningfully to GMs global viability,'' he said.
The carmaker's Australian arm says it expects Holden to remain in business - in part because of the $6.2 billion assistance extended to the local auto industry by the Australian Government in November. The package will help fund an industry overhaul to produce green cars to satisfying growing demand in the market.
''We have already announced plans to build a second car line in Adelaide - the reality of that is that we are a company that is innovating to make sure we are responding to a rapidly changing market,'' said Mr Whiffin.
Overseas cuts
GM said its layoffs include 26,000 workers outside the US as part of a plan to revive the company in exchange for massive financial aid, according to a document lodged with the US Treasury.
The plan includes the closure of another five plants in the US. GM has said if it does not receive an immediate cash injection it won't survive.
In its proposal to the US Government, GM cited its Holden operations: "Continued local production has become more challenging due to changes in market preferences.
''GM's local subsidiary (Holden) and the Australian government have developed a plan to bring to market a new, more fuel-efficient vehicle, with project funding provided by the Australian Government in the form of permanent grants.''
"With this support, Holden is projected to be a viable operation, making a positive net present value contribution."
More, please
GM and Chrysler have said they need as much as $US21.6 billion ($34 billion) in new federal aid, more than doubling what the company has already received from the US Government, and must get cash next month to survive.
GM has also examined three bankruptcy scenarios, with price tags of as much as $US100 billion, and that all were less- favourable options than a rescue. GM said it plans to close an additional five US plants by 2012 and cut 47,000 jobs globally by the end of 2009.
GM and Chrysler met a deadline today to report progress in revamping their operations as a condition of the $US17.4 billion in loans granted so far. The US Treasury Department can recall the money if automakers fail to show by March 31 how they will become profitable.
The industry got a boost when the United Auto Workers said it reached tentative accords with GM, Chrysler and Ford to amend US labor agreements to help the companies survive.
GM said it needs at least $US9.1 billion more in aid, or as much as $US16.6 billion should the economy worsen. The biggest US automaker has received $US13.4 billion since December. GM said it would stop making Saturn cars in 2011, if it hasn't sold the brand.
Chrysler, the third largest US automaker, said it needs an additional $US5 billion by March 31 after receiving an initial installment of $US4 billion. Chrysler also said it needs to eliminate an additional 3,000 jobs after shedding 32,000 through the end of last year.
Bankruptcy option
President Barack Obama's chief spokesman said a restructuring through bankruptcy for the struggling companies can't be ruled out, while adding the industry is "tremendously important'' to the economy.
White House press secretary Robert Gibbs, speaking before GM and Chrysler submitted their progress reports, said the administration won't "prejudge'' the next steps.
"I wouldn't preclude policy choices, particularly since we haven't seen details,'' Gibbs told reporters traveling with the president to Colorado. The auto companies "represent a huge part of our manufacturing base, and to have a strong and viable auto industry is tremendously important for the future.''
Shares fall
GM fell 3.7% to $US2.10 after regular New York Stock Exchange composite trading. Earlier, the shares sank 32 cents, or 13%, to $US2.18, extending their decline over the past year to 92%. Chrysler is controlled by Cerberus Capital Management LP.
To meet loan requirements, GM and Chrysler have been trying to persuade the UAW to accept equity instead of cash for half of next year's scheduled payments into union-run retiree health- care funds.
Discussions are continuing over how the companies will finance those trusts, the UAW said in an e-mailed statement announcing the preliminary agreement on other contract terms. Lower-cost labor contracts would help GM, Chrysler and Ford trim expenses amid the worst US auto market since the early 1980s.
GM is required by the government to cut two-thirds of its $US27.5 billion in unsecured public debt to $US9.2 billion, and the company has been in talks with bondholders.
With BusinessDay's Chris Zappone, Bloomberg News and AAP
