Australia Sets Up Fund to Battle Shrinking Auto Sector

The Australian government is creating a A$100 million ($89 million) fund to help the country recover from announced production pullouts by Ford and General Motors in 2016 and 2017, respectively.

Prime Minister Tony Abbott says the program will aid Australia's efforts to move from heavy industrial manufacturing to higher-value production. The plan also will provide direct support to workers left jobless by the auto plant closures.

Abbott, who was elected in September, says the government wants to help Australia's industrial base shift to sustainable products. "No government has ever subsidized its way to prosperity," he declares to reporters.

Imports account for about 90% of Australia's auto market. The pullout by Ford and GM will eliminate about 4,200 jobs and leave Toyota as the country's only local carmaker.

Analysts predict Toyota will eventually be forced by high costs to exit the country too. Its departure would complete the collapse of an industry that directly employs 45,000 people, according to the Federation of Automotive Products Manufacturers.