GM: No Decision on Production Halt in Australia

General Motors Co. denies a media report that it has decided to halt car production in Australia in 2016.

But the company also tells a government panel the company's Holden unit will need continuing aid to survive long term and will reduce local content even if it does receive assistance.

Holden Managing Director Mike Deveraux opines that A$150 million ($136 million) in annual subsidies would generate A$33 billion ($30 billion) of economic activity. Prime Minister Warren Truss demands that the carmaker "immediately provide a clear explanation" of its intentions.

Bloomberg News cites an earlier GM report to the Australian government showing that Holden received an average A$153 million ($139 million) in annual assistance between 2001 and 2012 more than GM invested in Holden during the period. The report notes that the unit has posted a profit in only two years of the past eight years.

GM claims it costs nearly $3,800 more to build a vehicle in Australia than in any of its plants in Asia. Analysts blame competition from lower-cost imports, aided by an Australian dollar that strengthened almost 50% against the U.S. dollar between 2009 and 2012.