Holden denies holding Government to ransom

Holden has denied media reports that it is playing "double or nothing" with the Federal Government, demanding another $265 million in funding or else it will abandon local production in three years.

A story in The Australian newspaper today claims Holden has asked the Government to almost double the money it has pledged to keep the company building cars in Australia.

The Federal Government and state governments in South Australia and Victoria have already pledged $275m to help the struggling car maker, but the report says Holden is demanding a lot more funding because it cannot make a profit building cars in Australia.

A Holden spokesman dismissed the story as "purely speculative". "Our plan remains to input two new global platforms into our Elizabeth facility," the spokesman said.

"To execute this next-generation program there are several milestones we must achieve - the two most crucial being reducing our structural costs and improving productivity in our factory, along with the implementation of clear, consistent and globally competitive industry policy.

"We are in close and constant discussions with both sides of politics - at a state and federal level - but are not in a position to publicly comment on the details of those discussions. We will also not be commenting publicly of the process, or any meetings, that may need to occur as we work towards securing the future of Holden manufacturing.

"Holden is doing everything in its power to secure the future of our manufacturing plant and lay the long-term foundations necessary to achieve the next-generation program."

The report comes just weeks after Holden asked its employees to consider taking pay cuts to keep the company profitable.