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Aussie Bailout: Government Offers Cash Infusion to Ailing Auto Industry
CANBERRA, Australia — Australia's auto manufacturers have welcomed government plans to inject an extra $A3.4 billion (U.S. $2.4 billion) into the ailing industry to offset tariff cuts and a global economic slowdown.Prime Minister Kevin Rudd has announced that the federal government will make the cash outlay between 2011 and 2020 to transform the industry, including money for a 'Green Car' fund to help auto companies design and sell locally made environmentally friendly cars.The fund would see the government match industry investment in green cars on an $A1 to $A3 basis over 10 years starting in 2009.Other funds would help consolidation in the auto parts sector and help suppliers boost their capability. When tied to previous support, the new package will lift total government backing for the industry in Australia to the equivalent of U.S. $4 billion.Ford, Toyota and General Motors build about 320,000 vehicles in Australia each year and employ about 65,000 people, accounting for around 6 percent of Australian manufacturing. The companies had asked the center-left government to delay tariff cuts to safeguard jobs.Rudd said his government will proceed with longstanding plans to halve tariffs on imported cars to 5 percent in 2010 from 10 percent, while offering aid to help the industry cope with slowing sales amid global economic gloom.Inside Line says: That's the kind of help the automakers would like to see more of in the United States as well. — Mike Jarvis, Correspondent