GM Holden Chief Executive Mark Reuss said Tuesday the bankruptcy of parent company General Motors Corp. (GM) is a positive opportunity to restructure, and the Australian business is "safe", with no job losses planned for now.

Reuss said GM Holden is well placed as one of GM's three key subsidiaries in the Asia Pacific region and that the bankruptcy will not affect the Australian unit's access to capital.

"We are a viable, sustainable business in the long term," he told reporters.

"We are cashflow positive, we are liquid (and) on the verge of turning a profit here this last month even in a down business."

GM filed for Chapter 11 bankruptcy protection in New York on Monday. The prepackaged plan leaves the U.S. federal government in control, with a 60% stake in the downsized auto maker, which is faced with the weakest market conditions in a generation.

Reuss said that in Australia, GM Holden has moved quickly to respond to the economic downturn, cutting shifts and freezing pay, and is well placed competitively with the best selling car in Australia in the Holden Commodore and new small car the Cruze on the way.

"With all those things in place, with the right operating and structural cost, we can be very profitable here," he said, adding that the division may be in a position to make a return on investment "in the first half of next year, if not sooner".

GM Holden has no plans to cut jobs at this stage and the company does not have debts owing to its parent, Reuss said.

Australia's A$7.7 billion auto industry has faltered in recent times as a rising Australian dollar exchange rate made imports more attractive, and as escalating gasoline prices saw consumers shy away from the mainly large vehicles auto makers produce locally.

GM Holden's South Australia-based manufacturing plant is currently running at only around two-thirds of capacity, at 66,000 units, according to Reuss.

The Australian division suffered a blow last year when GM jettisoned its Pontiac brand, and with it a major export deal to sell Holden Commodores under the Pontiac marque in the U.S.

Reuss said the company is working to replace lost exports and has some export opportunities, but he declined to give any detail on these at this stage.

"We are on the verge of bumping (capacity) up as we bring the small car online and then we have some export opportunities that we can't reveal today that will bring (capacity) back pretty quickly," he said.

Reuss downplayed suggestions that GM's decision to continue manufacturing in Australia - despite the fact that the local division has not turned a profit in five years - is due to generous subsidies offered by the Australian government.

However, he did say that the confidence displayed by the federal government in maintaining an auto industry in Australia was "very important".

For his part, Australian Industry Minister Kim Carr was eager to take credit Tuesday for the role played by the government in ensuring GM Holden's ongoing viability in Australia - notably through a recent decision to jointly invest with GM in producing its new low-emission vehicle.

The Australian government announced in December that it will contribute A$149 million over three years, from July 1, toward the new small auto.

That deal is the first grant of funds since the launch of the Australian government's new A$6.2 billion "clean car" plan last year, under which the government will match industry investment in low-emission cars on the basis of A$1 for every A$3 invested by industry.

The front-wheel-drive, four-cylinder Holden will be manufactured from the third quarter of 2010 at GM Holden's South Australia plant, supporting up to 1,200 jobs.

"Australia, a high-waged country, an advanced manufacturing country, is able to take advantage of the government's new car plan, and as a result of the partnership that has developed between (GM) and the government, we are now able to see the industry transform itself and move forward with greater confidence to ensure its sustainability," Carr told Australian Broadcasting Corp. radio Tuesday.

GM's two other manufacturing operations in the Asia-Pacific region are in low-wage countries South Korea and China.

Only three auto makers manufacture vehicles in Australia - GM Holden, Ford Motor Co. (F) and Japan's Toyota Motor Corp. (TM) - after Mitsubishi Corp. (8058.TO) closed its plant in Adelaide, South Australia, in March last year.

-By Alex Wilson and Rachel Pannett, Dow Jones Newswires; 61-3-9292-2094; alex.wilson@dowjones.com