Australian industry minister, Christopher Pyne, calls the upcoming step in finding a suitable buyer for Holden’s Elizabeth manufacturing plant a “positive sign.”
Pyne will meet with Holden chairman and managing director Mark Bernhard to discuss a proposal from Guido Dumarey, of Punch Powertrain, to purchase the facility, according to SBS Australia.
Pyne remains hopeful a deal can be reached, but is still cautious due to the many hurdles standing in the way of an official agreement. Holden has not received an official offer from Dumarey.
“The signs are promising and I’m encouraging Punch and Holden to work through the issues,” he told a business lunch in Adelaide on Friday.
Holden and General Motors have already stated it will treat the proposal seriously, but remains scheduled to close the Elizabeth factory in 2017.
The biggest issues facing Dumarey are the contamination left behind by Holden at the site, which could cost millions to clean up properly. Also, Dumarey continues to pursue a free license for the Zeta architecture, on which the Holden Commodore as we know it is built upon, and it’s unclear if GM will be willing to give up its intellectual property.
Comment
It is one thing for Dumarey to build a car and it is another to formulate a distribution network to sell it. GM has acknowledged that it underestimated the impact on the Holden brand with its plans to vacate production in Australia.
Holden and GM should step back and look at the viability of continuing to distribute the Commodore as a Holden even if it is built by an outsider, Dumarey. As such negotiating a favorable agreement to the rights of the Zeta platform are in order.
Yes the old Commodore will compete with with the Insignia based replacement but there are sufficient differences in these two cars that they could cumulatively increase Holden’s market share.
The big prize will be the goodwill to the Holden brand that is totally intertwined as part of Australia, but could so easily be lost if Holden has no domestically built product.