Labor remains committed to auto industry

HOLDEN job losses are disappointing but the federal government remains committed to the automotive sector, acting industry minister Gary Gray says.

Mr Gray says the government's thoughts are with affected workers and their families at this difficult time.

Holden has announced it will axe 400 jobs from its South Australian operations with another 100 positions to go from its product development workforce in Melbourne.

Holden said workers would be offered voluntary redundancy packages and the company expected the restructuring to be completed by August.

Mr Gray said Holden was committed to honouring worker entitlements and assisting them to find new jobs.

As well, the government has a range of measures available to assist workers, including intensive employment support under the Automotive Industry Structural Adjustment Program.

"The Gillard government remains committed to the Australian automotive sector and the manufacturing sector more broadly," Mr Gray said in a statement.

"We will work with the industry to ensure it is sustainable in a period where the Australian dollar is very strong, for example trading at parity or higher with the US dollar."

Holden said the strong Australian dollar was the primary reason for its decision, but there were also challenging market conditions and a fall in demand for its locally-built Cruze small car.

Mr Gray said Holden had made clear the restructuring was part of a broader move to make its operations more competitive and ensure it was well placed to retain production in Australia.

"The automotive manufacturing industry is an integral part of the Australian economy, paying the wages for around 250,000 Australians employed either directly in the sector, or indirectly in related manufacturing and service industries," he said.

"Our commitment to the sector is why we are investing $5.4 billion to 2020 under our New Car Plan. This will help fund investment and innovation by the car industry and it creates the policy certainty needed to support long-term investment."

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