General Motors Confirms Holden Will Cease Australian, New Zealand Production By 2017
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After months of reported investments, reassurances, negotiations, and general indication that it would not pull manufacturing out of Australia, GM has just confirmed that it will, in fact, discontinue manufacturing operations in Australia by 2017 — well before its initial promise of staying until at least 2022, and, in turn, letting everyone down.
The primary reason for the move revolves around the fact that manufacturing costs in Australia have risen 65 percent compared to just a decade ago, as the Australian dollar strengthened from just $0.50 USD to as high as $1.10 USD. In laymen’s terms, things are just too expensive to make a business case. Yet it’s going to cost GM A$400 million to A$600 million in the fourth quarter of 2013 alone to begin the wind-down process, with the automaker stating that it will incur “approximately $300 million to $500 million AUD for non-cash asset impairment charges including property, plant and equipment and approximately $100 million AUD for cash payment of exit-related costs including certain employee severance related costs.”
GM expects even more charges on top of the aforementioned costs through 2017, which makes us wonder how/when this move will end up paying for itself. There’s also the factor of customer blowback, considering that ending manufacturing in the country doesn’t seem like the most efective way to attract customers to Holden dealerships to buy cars.
GM indicates that 2,900 Australian jobs will be compromised as a result of this decision. We’re no strangers to what happens when manufacturing leaves a city or region, and plants close for good. Cities like Pontiac, Flint, and even Detroit, Michigan all come to mind. Hopefully the cities in New South Wales and Victoria can avoid a similar fate.
GM notes that the sale and service of Holden vehicles will be unaffected by this announcement, and warranties and spare parts availability will remain unchanged. GM will supposedly continue to sell Holden vehicles in the region beyond 2017 — meaning that they will have to be imported from somewhere such as Asia (South Korea or China), South America, or even North America. And the global design studio will also remain open.
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So if Australian’s are looking forward to seeing cars come from the us then what are the people of Australia complaining about?
If they are so loyal and prefer to buy locally made products then don’t the locally made cars sell better?
It’s no wonder all these companies are leaving
The money from GM the company that owns holden!
The american People that supports GM!
Understand now!
You need to read slower!
Take your time I’m not going anywhere!
Very sad news. Holden has a long and storied history. A great loss for all
This basically comes down to money.
Holden is much like Pontiac and really has little to offer that Chevy already offers. Even with being number two in the country they still sold just little more vehicles company wide than what GM sells in Camaro’s alone in North America.
This is not a large market or large company.
I would not be surprised based on what I am hearing that they may just change the grills to Chevys since they already are Chevys. Look a their web and less the Corvette and Camaro they offer nearly the same line up.
Change the name add a Camaro to the line up and maybe a Vette and you may see a lot of interest here.
The only thing Holden holds right now is name equity. As for product there is nothing left other then the old Zeta.
This deal was set in motion a while ago and I even pointed out some clues. A new RWD was stated by Chevy to replace the SS in a couple years. The Holden Commodore ads were stating that the car also was sold in America as a Chevy SS and the fact that the entire line up is a regrilled Chevy should have tipped off more.
Like Pontiac it hurts to see any brand go I hate Chrysler but hated to see the loss of Plymouth. But it comes down to making money and make the most of the money spent. One GM insider has stated that if Holden was Chevy they could tap into the whole global marketing plan vs. trying to ferret it out of their own small budget.
One last clue was just given not long ago. Chevy said they will increase marketing of their cars in Japan. What kind of cars do they need there? If you noted Right hand drive then you get a star. What kind of cars do the Aussies need? Right hand drive. Now the idea of GM going to Japan looks like a loser but if you combine it with cars sold in Australia then it is not as crazy making RHD version. Just making Chevys for Japan alone would never fly so this could be an option.
Also these could be shared with Vauxhall in some cases like the RWD sedan. I would recommend watching what GM is doing globally and the clue will start falling here.
Maybe holden should go away like Pontiac
Headquarters and like I said, design team are not going to be in Australia.
Many who work at Holden are not all Aussies and may want to come home too. People just assume that the team there is All Holden but GM moves people everywhere and more than once.
I wonder what Reuss thinks about this. He had a real good time running Holden a few years ago.
But in looking at what is going on. GM really wants to have ONE Chevrolet and ONE Cadillac throughout the world like virtually every other global auto company.
Ford is Ford globally. Toyota is Toyota. BMW is BMW. etc.
Unfortunately the cards dealt GM is what legacy has given them. Vauxhaull, Opel, Holden, Chevrolet. They thought about replacing Opel/Vauxhall in Europe with Chevy but the political and customer climate would not work without DEEP pain so they tried to bring in Chevy as the value brand and upgrade Opel to mid market. With the awful economy in Europe it did not work. If things were booming over there I bet there could have been a different story.
Anyways I think it is 50/50 if GM replaces the Holden brand with identical vehicles branded Chevrolet. Perhaps that will be one of Barra’s first decisions? I do think the Engineering and development group will be greatly downsized and primarily homologate the products engineered in US, China, Korea and Europe for Australia.
It’s indeed very sad that Australia is losing another of its auto-manufacturers, but in this global economy production increasingly goes to the region that is most competitive, offering the best return for the investors and share-holders alike. At the end of the day, these guys are why the company is in business and they can just as easily dis-invest and put their money elsewhere.
My understanding of the GM business model (certainly that outside of the US) is that individual car-plants now have to tender a competitive business case to win the rights to build a new model and stay in business. Hence in the United Kingdom, Ellesmere Port has been designated the global lead plant for the next Astra/Verano/Excelle GT, with the Luton plant taking the lead on the new Vivaro van.
At the end of the day from 2018 onwards, it will all depend on how many new Zeta platforms GM reckons it can sell globally. Factor in assembly, labour costs and shipping to the principal markets (North America/Aus & NZ/China/Middle East), it could well be that somewhere like the Port Elizabeth plant in South Africa is the most economic manufacturing base for new Zeta. PE already assembles a wide variety of different platforms including all the Chevy front-wheel-drive models + the half-ton Chevy Ute, Opel Astra and Corsa, together with the Isuzu KB pick-up. The current Holden Commodore and ute are also imported from Australia and re-badged and sold as the Chevy Lumina. In addition, PE supplies and exports to all the countries across the Southern and Central African region.
If it isn’t made in Australia it isn’t a Holden!!!! For my part GM can shove it where the sun don’t shine!!
Trust me Wayne… There are many of us in North America, that understands.
Because populations, no matter where they are, buy the cheapest, well hyped product on the market. In doing so… A they cut their own national economies throat.
The U.S. has been doing this for well over two decades, and now the only ones who are doing well… are the wealthy.
For better, or worse, nationalism is an endangered breed. Only the wealthy will survive well, sitting on top of the dung heap. This is what “trickle down” really means and is.
Your Going to tell GM to shove it! Well then it looks like your going to tell every car company to shove it! With no one in your country building cars what are you going to do in order to have a new car?
Why is GM the only car company getting heat for pulling out of Australia? I don’t remember this kind of news when Ford did!
So you will buy a holden that’s based on a chevy, as long as it’s built in Australia! But Americans are supposed to have no problem buying a chevy that’s based on a holden and comes from Australia!
You People Are Ridiculous!
Brian… You’re taking a holier than thou, on this. The Australian built GTO, never really took off in the states. Why?… because those who want a muscle car, want an American made muscle car.
Why are the big three doing well? Because, besides better products, many Americans realize that the auto industry is our last heavy manufacturing, production, industry left. The rest was given away by the Congress, outsourcing it to wonderful democracies like China.
You can’t have it both ways, only buy your cars and expect other people to buy yours!
Brian… Yes you can have it both ways. It’s called fair trade. It happens every day with responsible manufacturers. VW, MERCEDES, TOYOTA, NISSAN, BMW, HUNDAI, SUBARU… etc.
What do they have in common?… All of them have at least one production/assembly plant in America. This gives them the right to sell their other products here, on an equal footing.
In other words… They share assembly, which in turn, is providing jobs in this country. Think of it as job sharing… Fair trade.
It creates jobs, but foreign car companies fool you into believing the cars they build in America are American. . .
Nearly all your money goes overseas where the company was founded. I live in America and support my country! I buy GM. . .
Fair trade! So I buy mine only and I expect you to buy mine also! That’s a one way trade policy! You want me to take yours but you have no interest in taking mine!
Who is screwing who again
When is the last time you bought an auto from Australia?
You’re dismissing nationalism as a motivating reason to buy home products.
When a company, no matter the reasons, pulls manufacturing out of a market that has been loyal customers, that country/market feels betrayed.
It may be smart economical reasons to pull up stakes, but that country/consumer/worker, who has been written off… Will never be a willing loyal customer again.
If holden is loved in Australia like you say it is then why does Mazda out sell holden?
Why does holden have to be subsidized by the government for the last 10 plus years?
Loyal not really!
Brian… This is copied from my 1st comment on this thread.
“Trust me Wayne… There are many of us in North America, that understand.
Because populations, no matter where they are, buy the cheapest, well hyped product on the market. In doing so… They cut their own national economies throat.”
Like us, Australians don’t know what they’ve got, until its gone.
Soon we will be outsourcing congress to India. So they can lie to us and trickle down on us cheaper.
Evan, too bad that there are not more like you.
Besides the fact that most of the profit goes to the originating source, there are exceptions like China. Their government made sure that most of the profit stays in China.
This brings us to an overlooked point, which is… what type of government are we dealing with the in the sharing of profits and jobs. I don’t mind it, if the government, we are sharing resources and labor with, is a friendly democracy. But if the country in question is a potential, belligerent threat to other democracies, and us, then the trade we have with them is always made unfairly, with the threat of nationalising said assets on the back burner.
The relationship we have with China, is rapidly deteriorating. Now that they have been given or stolen most intellectual property from us… they are flexing their military muscle with just about every bordering country, our government has finally turned its attention to the east. I only hope that its not too late… and so does Australia, because the only thing standing between sparsely populated Australia and China… Is our navy’s 7th fleet.
Our corporations have inadvertently created a Frankenstein, and many of our democratically Asian nation allies are in the path of our attempt to bring China into the peaceful world of democracies, that enrich the lives of its citizens with trade… fair trade. Unfortunately, China isn’t ready.