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Elizabeth plant bidder wants subsidies

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The Victorian property group that’s pitching a plan to keep making cars at Holden’s Elizabeth plant says it will need government subsidies.

The consortium, Ethan Advisory, also hit back at the State Government’s manufacturing industry adviser Goran Roos after he dismissed their bid as a “pie in the sky” concept that needed exorbitant amounts of capital.

Manufacturing Minister Tom Kenyon, meanwhile, told InDaily he’s happy to keep discussions with Ethan open, adding that it was too soon to talk about subsidies.

A spokesman for Ethan Advisory’s head, Ashley Fenn, contacted InDaily yesterday after our report on comments at an economic forum by Goran Roos and the State Government’s Automotive Transition Coordinator Greg Combet, where both men dismissed the idea that any company could start making cars at the old Holden plant.

The spokesman was scathing of Roos, saying the key adviser had yet to come up with a viable manufacturing plan for the state – a claim rejected by Kenyon.

“We’re not interested in what he’s got to say,” the Ethan spokesman said.

Roos is chairman of the Advanced Manufacturing Council and a consultant to the Department of Manufacturing, Innovation and Trade (DMITRE).

“He hasn’t talked to us,” the Ethan spokesman said.

“We’ve met with Tom Kenyon and he’s been particularly supportive of us.

“We understand there will be cynics, but we believe that we can make it happen.”

The spokesman claimed the consortium had access to $750 million in Australian-based capital investment and would ask for a continuation of the government subsidy regime that existed under the previous federal government.

“We want to renegotiate the subsidy arrangements.

“The subsidy regime that’s been in place for the industry should continue, but we accept that it can’t go on forever, so we’d be prepared to set an end date for that.

“We have local capital and have gathered together the expertise for this.

“Ashley Fenn has a solid background in the industry having been involved in fleet sales and marketing.

“Our business case hasn’t been fully developed yet and we have spoken with some senior executive at General Motors in Detroit, but not in Australia.”

Kenyon defended his decision to meet with the consortium’s representatives, while also backing his manufacturing industry adviser Goran Roos.

“I’m not going to dismiss it out of hand and I want them to have a crack at this,” he told InDaily.

“Their comment about Goran Roos is a little bit harsh; he’s come up with a manufacturing strategy for us.

“I’m happy to keep talking to these people, but it’s a bit early to be talking about subsidies.”

At Tuesday’s Committee for Economic Development Australia (CEDA) forum, Beyond2017, Roos compared the Ethan bid to many that were floated in Sweden when the GM-owned SAAB Auto group went under several years ago.

“When SAAB went down in Sweden there was many a person with many an idea of how to prolong that activity,” Roos told the audience of 500 Adelaide business people.

“Almost all of those ideas were pies in the sky.

“There was one idea that was exceedingly well-capitalised; they had expertise in management, they had huge capital, had some ideas for niche production and how to manage supply chains … and they failed miserably.

“The reason is that one underestimates the complexity that surrounds the supply chain, maintenance issues, cost controls etc.

“The primary problem is not supply side, but demand; it’s extraordinarily complex and its extraordinarily expensive.

“It would need a proper plan that doesn’t not rely on restriction of imports or government support and a capitalisation of say, at least $10 billion dollars.”

Combet said he hadn’t seen the Ethan consortium’s proposal, but had read reports of it and had identified one significant stumbling block – Holden.

“I haven’t seen any proposition,” he said. “All I can do is repeat Goran Roos’ view of the complexities.

“What I can say is that Holden owns the site and they’ve made it very very clear to me that they will decide what they do with the property.”

The Ethan consortium had floated the notion that it could gain access to the Holden brand – a notion ruled out immediately by Holden corporate affairs executive director George Svigos.

The Ethan group of companies is based in Victoria and run by Ashley Fenn who is also the Victorian state director of the Family First Party, on the party’s federal executive and was a Senate candidate at last year’s federal election.

He heads the Ethan Property Group of companies which operate in the residential, commercial and industrial property sectors.

In 2009 Fenn set up Ethan Affordable Housing which specialised in managing houses and units built under the Rudd government initiative, the National Rental Affordability Scheme (NRAS).

The NRAS paid an annual subsidy of $9500 to owner/investors who lease out their property at 20 per cent below market rent rates.

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