GM’s Holden Reports A$361 Million Loss For Fiscal 2014
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General Motors’ Australian subsidiary, Holden, has reported a before-tax loss of A$361 million for the fiscal year of 2014 on revenue of $3.62 billion. On an after-tax level, the loss comes out to $255.2 million.
Having sold 106,092 units in calendar year 2014, Holden is the second most-popular automotive brand in Australia, with Toyota currently being first.
The financial performance represents an improvement over the A$553.8 million loss reported for fiscal 2013, and comes as no surprise to Holden’s CFO Jeff Rolfs, who forecasted during fiscal 2013 earnings that the automaker would likely post another loss in 2014 and continue doing so through 2017.
Digging deeper into the results shows that Holden recorded a A$345.9 million charge for ’employee separation costs’ as well as a A$9.4 million ‘impairment charge’, payable once for property, plant and equipment. Together, these two charges contributed the most to the loss. In fact, had Holden not incurred the charges, its loss would have only been as little as $5.6 million. By contrast, the 2014 fiscal year results are a significant improvement on the $70.3 million figure calculated the same way for 2013.
As one would expect, the majority of the costs are associated with GM-Holden’s decision to shutter manufacturing operations in Australia.
“It’s obvious that there are major costs associated with our decision to cease domestic manufacturing of vehicles in Australia by the end of 2017, chief among them being employee separations and entitlements. We’re committed to supporting our people and treating them with the respect and dignity they deserve during this transition; clearly there are significant costs associated with that,” Rolfs said today of the 2014 result.
“We are working with all levels of government and the rest of the industry to deliver support, training and links to future opportunities for Holden employees impacted by our decision. This is evidenced by Holden’s $15 million contribution to the Australian Government’s Growth Fund for the transition and re-skilling of Holden employees, along with the Holden transition centres we have established at all of our sites.
“We are always mindful of the impact on our employees and our financial results, however these are expected and foreshadowed costs that are well within our forecasts. As we announced in 2013 and again last year, there are substantial costs involved in the orderly wind-down of local manufacturing. This is a difficult path to tread but we’re committed to our long-term plan.”
There is, however, some upside to Holden’s loss: the A$345.9 million for employee separation accounts for all employee entitlements though the end of 2017 calendar year. As such, Holden has now accounted for the majority of costs — separation and asset write-downs — associated with its ceasing manufacturing operations in the country.
Holden says it has implemented initiatives to reduce operating costs and improve business efficiency during the course of the year as it continues to adapt to its evolving business model.
“Our operations and business model will continue to evolve, what won’t change is Holden remaining a significant part of Australia and its communities through both our National Sales Company and our 230-strong dealer network, employing more than 14,000 people combined. Holden also continues to contribute to the Australian economy, spending $123.7 million in research and development in 2014 alone,” Rolfs said.
“Holden is focused on executing our long-term plan to grow sales and revenue and manage our other costs very closely. We continue to face stiff challenges and there is no quick fix but we are building a sustainable future step by step.
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GM/Holden are not 2nd in sales sorry and they might have just slipped to 4th behind Hyundai. Sad that after all the market dominance GM/Holden had that sub standard GM/Asia junk imports and terrible marketing decisions have led to this. GM/Holden will be lucky to be any higher than 8th after they switch to full imports seeing as the locally made commodore accounts for 16,400 of the 51k total sales. And yes Scott3 most of us are fine with it if GM packs up and pisses off all together after 2017 and take their two thirds sub standard quality FWD GM/Asia shit box portfolio with them.
Top 25 best-selling brands – January to June 2015
Toyota — 101,714
Mazda — 56,591
Holden — 51,737
Hyundai — 50,099
Mitsubishi — 35,866
Ford — 34,810
Nissan — 32,950
Volkswagen — 32,020
Subaru — 21,659
Honda — 20,602
Mercedes-Benz — 17,889
Kia — 16,660
Jeep — 14,453
BMW — 12,602
Audi — 11,343
Isuzu Ute — 10,227
Suzuki — 10,068
Renault — 5697
Land Rover — 5353
Lexus — 4453
Fiat — 3108
Peugeot — 2426
Skoda — 2352
Volvo Car — 2288
Porsche — 2070
Read the article. Holden was second best selling in CY 2014.
And it’s funny that you mention “GM/Asia” and junk, seeing that the top 5 best-selling brands are Asian. Skewed perception, much?
Hi Silent Electrician,
I think your misinterpretation of GM/Asian junk is a cultural thing.
As the sales figures show Australians buy a lot of Asian made vehicles but the GM stuff we are seeing in Australia is poor quality and poorly perceived compared to other Asian brands…..Hence the reference to GM/Asian junk.
Hope this helps explains the comment.
Sorry but if they had done nothing things would be even worse.
Selling rwd cars and building it in country is not going to solve Holden’s issues.
The companies moving to the top offer no rwd cars nor are they domestic. Nor are their cars of better quality.
For as small as your market is I would not blame GM if they left. It is just worth the hassle even if sales were better.
GM really needed to have changed Holden earlier but the could not afford it.
Sorry Silent but facts are facts and GM/Holden are selling worse than ever, 2nd best was along time ago in this market. As for GM/Asia junk I didn’t say every vehicle made in Asia was junk, I can think of many different Asian built models I would buy before a GM made product thank you. I might actually buy an R35 for myself and a new Patrol for the missus and kids seeing as Nissan still have parts manufacturing here.
Yes David, facts are indeed facts:, Holden was — in fact — second best-selling in 2014 calendar year with 106,092 vehicles sold, behind only Toyota.
And would you care to expand on this? “I can think of many different Asian built models I would buy before a GM made product thank you.” I’m truly curious as to why.
Chis, that reasoning is simple – GM’s Korean-made products (as well as Colorado) are absolutely CRAP! With poor value for money, numerous issues later on down the track and with regards to the Craptiva, a very poorly designed front end which makes the car unroadworthy, I would also put many other vehicles in front of something GM derived. I looked at a few dual cab, four wheel drive utes late last year and the Colorado was by far the worst one of the lot. It ended up coming down between a Ranger and a VW Amarok. I ended up getting a base Amarok which was only a few grand more than the base Colorado, but drives much better, is quieter, more comfortable and uses less fuel as it has a sixth gear (Colorado, Hilux and D-Max only have five). GM need to stop this whole “This is the lineup you’re getting, and that’s that” mantra. It only works for Ford because the lineup are genuinely decent products with a fair chunk of them coming from Ford Europe while the Ranger was developed by Ford Australia so is suited to Australian conditions which is why some people are prepared to pay significantly more for one over a Colorado. Plus the Fords actually look nice. Only product in the Holden lineup that doesn’t look like it was drawn by either a six year old kid or an American is the Commodore, but even then they’ve taken the rear spoiler off the SS which makes it look stupid (every SS Commodore since the VK has had a rear spoiler on it) much like the VH SS did (it was pretty much a parts-bin affair with only a 253 and four speed manual or three speed Trimatic auto and some decals). I would even sooner have an FG X XR8 over a VF SS these days.
Simply go and read the reviews on any GM/Asia product that it sold here in Australia compared to its direct competitors, the GM product all ways finishes second or worse by a fair margin. If GM want me to buy those products then increase the damn build quality.
I thought I should also put this in context in regards to my feelings about Holden. I have been a GM/Holden man my whole life, My Dad only ever owned Holden’s and I grew up riding around in Holden’s. I have purchased 12 brand new Holden’s over the last 15 years and only ever owned Holden’s. I have been to Bathurst (our daytona) 9 times and been ecstatic when we won and shattered when beaten by Ford. Up until recently the thought of owning any other brand never even entered my head, how angry do you think GM have had to make me and many other loyal buyers like myself to turn around and say “**** you GM”?
I also find it laughable that so many Americans get their nose out of joint because we wont buy what GM is selling as its not what we want. Here is a simple suggestion, sell us cars we want to buy and we will buy them WHAT A REVOLUTIONARY IDEA !!!!!!!
Holden Cruze / waterpump / 30,000km
Google it. My Holden dealer tells me it’s not uncommon and is my problem as it’s juuuuuust out of warranty.
Show me a Commodore with a bust water pump at 30,000 km and you could put in Ripleys (as stranger than fiction)
I think David sums up a lot of Australians views over GMs handling of Holden.
They have really stuffed up a well recognized and respected company.
While operating conditions have been tough, they have really misread the market.
Not seeing too much light in the tunnel, only the freight train headlights!
If most of the losses were due to payments related to winding down production in 2017, I wonder how much of a loss they would have suffered had they decided to continue manufacturing. I know that there would have been addition operating costs with continued manufacturing, I’m just curious where the balance sheet would have landed. It would be nice if the AUS government would have adjusted the tariffs to encourage domestic manufacturing.
When you take the soul out of a brand this is what happens. Holden fought longer than Pontiac, but it looks like it’s over.
There is NO EXCUSE for what GM did to this long standing Holden company , in my opinion ! They did the same thing in Europe with Opel and in particular with Chevrolet brands . Now here in Europe, Nissan with one new CUV becomes a huge seller in the marketplace .
This humungous bloated GM corporation cannot get intelligent marketing people to be able to focus on what the Europeans or Australians want in today’s marketplace ?? This isn’t rocket science , it just isn’t !! Instead this company still tells the world what it is prepared to sell them , whether the buyers there want or need to buy that model , as designed . This , to me , is still the ” throw it at the wall and see if it sticks ” mentality and is completely out of place in this , the world’s most competitive business !!
If you’re making the argument against global vehicles, then I will bring up Ford and its highly-successful One Ford global vehicle strategy, as well as Mazda and Subaru . There is no reason that GM/Holden shouldn’t follow suit with their mainstream (Chevy/Holden) and luxury (Cadillac) vehicles.
That would be fine if the build quality was the same as what Ford is bringing here but its not and Mazda is legendary for its excellent build quality here. Not to mention the Halo car comparison. Base Ford Mustang $45,000 vs Corvette upwards of $135,000, what ex commodore ss buyer at $50,000 is going to warm to the idea of having to spend an extra $85,000. Are GM insane? do they want to fail here? Because anyway you look at it they are making the absolute worst decisions in Holden’s history.
An FG X XR8 over a VF SS! are you insane? While unhappy with GM, the SS has it over the latest Falcon.
Agree with the Asian rubbish! My work has Colorado’s, the guys hate them. Some burn oil while the ride and looks are second rate.
While a parochial Holden guy, I do not support the current sub par fwd offerings.
As it is if GM dropped you guys I would not be all that upset. Dropping Australia is like dropping one model car. GM can use the volume but for all the hassles and complaints I see here it is just not worth the effort.
They can leave in in Toyota’s Mazda’s and Hyundai/Kia’s It’s not like they are imports or even some made in Korea.
We get your Holden here and we also get some of the Koran GM cars here and while built for different purposes and price range one is not built any better or worse than the other. No one here complains or even for the most part even notices the Encore is from Korea and the SS if you see one is built to the similar level of quality as we do not see issues with either one. Now there is a difference in content but for $20K more I would expect that.
You guys are worth 100,000 units a year and you have to learn the cost to design, build and make a variety of models is difficult to do in this volume. The other brands are doing the same thing and also contributed to the decline of the in country MFG,
They could have kept things as they were and charges a lot more for each model or they could do what they are doing to compete with the others in the same price range. When your countrymen started to buy the cheaper imports they chose for all of you. Now GM could keep it as it was and pass on the added cost to you but then you would not buy then either.
That is like how many fight Walmart here because they run off the smaller business but yet they do not shop local because they charge too much.
Companies are in business to sell product and make money not employee people and for national pride. These are positive side effects and how you shop and what you buy dictate that. When you made Toyota Number one and Mazda and the other imports higher sellers you sealed your fate along with the government issues involved.
WOW Hyperv6,
Firstly Mazda models are more expensive than GM/Asia products here but worth the extra money as they are better built end of story.
Second GM have completely stuffed up the marketing and type of cars we want to buy but sure its not GM’s fault its the Australian public’s because we expect a decent product for our hard earned money.
Third seeing as people are buying other brands at a higher price of better quality over GM’s cheaper sub quality Asian imports your argument over we wouldn’t pay more for a decent car by GM is invalid. If you stop being a GM fanboy for 5 seconds you would see its an easy fix for GM in all they have to do is offer decent vehicles we want to buy! But no hate us because GM is not selling what we want and blame us for the sales decline, its that type of thinking that turned GM into Government Motors in the first place. We didn’t knock GM out of 1st place in sales, GM did it to themselves with decades of poor management, sales marketing, poor products and an uncanny ability to misread our market at every opportunity.
I’ve read here a while. I’ve never posted before.
Hyperv6, while I don’t agree with everything you say you raise valid points.
That said this really resounded with me.
When your countrymen started to buy the cheaper imports they chose for all of you.
The market ultimately choose what is sold along in at least our case government regulations. Now with the global market too it will limit the choices in markets that are low volume that used to make their own,
The bottom line is Australians even with the RWD cars available have been migrating to the FWD Toyota’s and other imports. Most are made in some Asian country at this point and brought in.
The reason they by these cars is because they are most times cheaper and the fact they get better MPG just as people else where in the world have gone to these cars.
We went through the same thing here as has Europe.
The fact is the RWD buyers are now becoming a smaller slice of a even smaller part of the Australian market. It is just not economically feasible to market a number of carts that sell in such smaller numbers.
If you look at the number posted here and see how many of them were of Australian RWD production it is a small number. While the other cars are sold globally and are shared with the rest of the world.
To be fail the government down there played a part in this with their deals and could have helped a little but the bottom line was people were moving to cheaper smaller FWD cars as they have else where. The world economy is not as robust as some would like you to think and many people have had to down grade their purchases. The car prices are too high everywhere and it is not going to get better. The cars that offer the most for less will win no matter what.
As for their complaints on Quality I find it a little over the top. Yes they are not as strong to take a beating on bad roads like many of the older full frame cars or RWD but that is the way it is. The fact is the GM cars built in Korea are built to the same standards in the plants as any where else. The only people who complain are the Australians who are a bit sour because they lost their home markets.
We in the states for years were sour for the imports coming in and yet today people still like to call Honda and Toyota crap cars but the fact is they took the market with these cars because our countrymen bought them because they offered what the market wants at the time. Add in we had our own quality issues at the time too and we lost the lead.
No car is perfect but they are all pretty much competitive with each other.
The fact is if you wanted to keep Ford and Holden in country then people should have stopped buying the other brands. Yes you would have paid more and not gotten many of the things like higher MPG as the other brands but that is what you get.
GM’s greatest issue as they did not keep up with the market shift there fast enough. They should have been offering the smaller, cheaper and more efficient cars even sooner to compete head to head with Toyota. Also the smaller truck and even larger trucks should have been sooner. They still should be getting the wider line of new Colorado there. Our people went to trucks and larger SUV models GM could do the same there.
GM killed the Camaro for a while when it was selling around 50,000 units. you are selling about the same but of all models. You are not going to get a lot of special consideration unless you increase sales as they will never make money back other wise.
I really do not want GM to leave there as I did say that for shock value. But it very well could happen if people continue to buy the other Asian FWD cars they are making the top sellers. These country’s are not in the least trying to tailor their cars in any way for your market as Ford and GM have. In the end you are going to be driving the same cars they drive in Soul totally unchanged other than RHD.
As it is, I wouldn’t be upset if GM dropped us (Holden) either. In fact it’s probably a good thing.
For Holden to survive it needs to export, our domestic market has shrunk too much. GM has made it abundantly clear that it is not interested in Holden’s manufacturing and engineering capability. They have kept the local styling office – but big deal and for how long?
So GM put it up for sale – maybe India/China might buy them and leave them to its own device like Jaguar. If no takers, no problem, park the brand up – without local design and manufacturing input its effectively dead anyway. Success or die trying. The only downside is losing access to GM Powertrain products.
I drive the current RWD V8 manual family sedan and I have no confidence that GM will send us anything like it post 2017.
Shame Jacoby shame.
I love the passion that we car guys have. I don’t agree with all the comments but I can understand them.
The real problem, I think, is GM’s insistence in sticking with the Holden brand.
Sure they “own” the brand but the value of a brand is the passion it invokes in the customer….and Holden is an iconic Australian brand that symbolises Australia’s own car.
(Yes to my US friends, they’ve actually called it that)
A Holden symbolises Australian ruggedness and ingenuity. Well before Toyota land cruisers and Nissan Patrols ,Aussie miners,farmers, tradesmen and family men crossed the land in a Holden.
The family Holden was as indestructible as our fathers who drove them and the men who built them.
GM have long ‘badged’ imports as Holdens and it’s been fine as they were just secondary models for sale alongside the ‘real’ Holden Kingswood or Commodore.
But now the “real” Holden is almost gone and we’re being Feds this spin about Holden ‘staying’ and telling us ‘let’s go’ to a better future.
We accept the logic, economics and reasoning behind the Plant closure but what really pisses most Australians off is the insistence of rebranding a global GM car as a Holden and lining us up to accept some Opel thing as a Commodore.
GM should say “thanks Australia for the great times but you’ve grown up as a country, the worlds a smaller place and you want global cars.
Retire the Holden brand with respect, promote your GM vehicles through GM branded dealers but remind us that those same GM dealers , and GM USA will welcome and look after our Holden’s as long as we keep bringing them in.
I think the fixed price service promo for every Holden ever built was some lame attempt to try and tell us this.