GM Will End Production in Australia After All

A day after denying plans to shut down its carmaking operations in Australia, General Motors Co. says it will do exactly that by the end of 2017.

CEO Dan Akerson blames the decision on a "perfect storm" of four negative influences: the strong Australian dollar, high production costs, limited demand and what he describes as the world's "the most competitive and fragmented" automotive marketplace.

Holden's phase-out of vehicle and engine production will eliminate 2,900 jobs at the company's factories in Elizabeth and Victoria. The phase-out also includes a sharp reduction in engineering activities in the country.

Pre-tax charges associated with the four-year pullout will begin with a charge in the current quarter of $400 million-$600 million, mostly in the form of non-cash asset impairment charges, according to the company.

GM says Holden will maintain a presence in Australia and New Zealand beyond 2017 in the form of national sales company, national parts distribution center and design center.

Ford Motor Co. announced in May that it will end production in Australia in 2016. Toyota, the country's only other local carmaker, says GM's decision puts "unprecedented pressure" on its ability to continue there.