For car maker Holden to maintain its two-model manufacturing facility in Adelaide, the firm needs $250 million assistance from the government, Holden Chairman and Chief Executive Mike Devereux said on Sunday.

The amount would be sufficient to cover costs for five years to replace or update the Cruze and begin production in 2017 of a replacement for the Commodore model. However, it is two-and-a-half times over the initial estimate of $100 million.

Due to the uncertainty of the political career of Manufacturing Minister Kim Carr, who supported losing candidate Kevin Rudd in the Australian Labor Party leadership struggle, Mr Devereux said the firm is negotiating an assistance package with Australian Prime Minister Julia Gillard and her cabinet.

He said that Holden was given by the government $149 million as a co-investment to set up the infrastructure needed to produce the Cruze which is built on the global Delta platform. It was initially designed in South Korea for global production by GM Holden and is one of the top five cars sold in Australia.

Mr Devereux said the competitiveness of Holden's Australian operations would be at stake as well as jobs if the company losses the bid with General Motors to other governments. He said for the Holden operations in Australia to remain profitable, its costs should match GM plants in U.S. than in China or Thailand.

"A lot of people wish that the world was flat and that everybody played by the same rules but countries aggressively compete for what Australia has," Mr Devereux told the Herald Sun.

He said that seeking a taxpayer-funded assistance package is common in the car manufacturing sector. He cited the provision by the Brazilian government of tariffs for its car makers and regional development funds by the British government as examples.

"The assistance that we seek is the assistance, frankly, that is sought by auto companies and other manufacturing entities around the world," he told ABC.

Mr Devereux pointed out that Australia is one of the 13 countries in the world that is capable of designing, engineering and manufacturing vehicles and other nations want to have the same capability.

GM, which is based in Detroit, Michigan, said the company is prepared to invest $400 million in its Australian operations if there is a right amount of co-investment by the federal government.

Opposition spokeswoman for innovation, industry and science Sophie Mirabella expressed concern with how the government's Automotive Transformation Scheme operates because it sets the standards for car producers to meet before money is handed over. She cited the $35 million that was given to Ford at the end of 2011 from the scheme with no attached conditions.

"There must be a transparent grant program with well-understood benchmarks and guidelines administered at arm's length. Any money unspent at the end of the year should be returned to consolidated revenue and not just gifted out," The Australian quoted Ms Mirabella.

Ironically, while Holden is seeking more government assistance, it axed jobs in February and announced a 22 per cent wage increase spread over the next three years for the remaining 4,000 workers in Australia. Besides the wage increase, the employees would also receive an assured $1,750 one-time hardship recognition payment on the first year and $1,000 more on the second and third years to offset the layoffs and pay cuts previously made by Holden.

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