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Holden closure: the full story

By Byron Mathioudakis, 11 Dec 2013 Industry

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Holden to become full-line vehicle and parts importer with design studio staying

GENERAL MOTORS has ended weeks of damaging speculation with the shock announcement that Holden will cease vehicle manufacturing in Australia from late 2017 to become a full-line importer.

Approximately 2900 jobs at Holden will be lost directly, with 1600 positions to “be impacted” in South Australia and a further 1300 in Victoria.

Only sales and distribution in Melbourne will remain in operation after that date, along with the design studio for future global vehicles.

Along with the vehicle and engine manufacturing plants in South Australia and Victoria respectively, the Lang Lang proving ground just outside of Melbourne will also cease operations.

Effectively this will end nearly 70 years of Holden engineering and over 85 years of General Motors vehicle production in this country.

What this means for the future of the Commodore brand beyond the fourth quarter of 2017 has not been announced, with Holden refusing to reveal what its replacement will be or where it will be imported from.

The Chairman and Managing Director of Holden, Mike Devereux, said that the decision was only made at General Motors’ Detroit headquarters last night (Tuesday December 10 2013) Australian time, after the conclusion of the productivity commission with the federal government.

“I went to the productivity commission yesterday as I was requested to do… and subsequent of my appearance, we had another review of the situation in Australia yesterday afternoon, I was informed by GM leadership – and I concur and agree with the decision that they have made – that we will exit manufacturing in Australia,” he told a packed press conference in Adelaide today.

The Holden workforce in South Australia and Victoria were informed of General Motors’ decision to cease manufacturing around lunchtime today.

“I received a final decision from General Motors yesterday afternoon and my first port of call was to jump on a plane and inform our employees,” Mr Devereux said.

“From 2018 Holden will become a full-line importer… with a world-class design studio doing global work for General Motors.

“It also means a reduction of operations in our head office in Melbourne… meaning the eventual loss of approximately 2900 jobs.

“It will be a lengthy and orderly transition over a four-year period… and after that Holdens will continue to be sold and serviced in Australia and New Zealand.”

Mr Devereux went on to say that every avenue of opportunity was explored to retain the manufacturing of Holden vehicles in Australia, but increasingly difficult conditions mean that pulling car making out is the only viable solution.

“This is an incredible difficult day at Holden given our long and proud history of making vehicles in Australia,” he stated.

“Make no mistake, we have looked at every possible option to build our next-generation cars here in this country to replace our existing models. Holden builds cars that are popular right across this country. Everybody that is saying otherwise is ignoring the monthly sales figures. The fact is that two of the top five passenger cars in this country is made right here in our plant in Adelaide, and we are number two overall.

“But no matter which way the numbers, the long-term business case to make and assemble cars in this country is simply not viable.

“It is no secret – we are not only witnessing a huge shift in the automotive market in this country, but also in the wider economy in Australia.

“Australia’s automotive industry is up against a perfect storm of negative influences, including the sustained strength of the Aussie dollar against nearly all trading currencies, the relatively high cost of production, and the relatively small scale of the local domestic market.

“In addition we have arguably the most competitive and fragmented auto market on the entire planet… and the bottom line for GM is that building cars in this country is just not sustainable.”

Mr Devereux said General Motors would work with federal, state and local governments to help equip people who will lose their jobs what they need to find new employment.

“We will be doing our best to support our people over the next four years… but there is nothing I can say that will take the sting out of this announcement.

“This is a very difficult situation for everybody at Holden, the government and the economy of this country. We don’t mean to make light of the fact that since 1948… that we have been part of the industrialisation of this country, and has always had a strong relationship with the government of Australia and the people of Australia.

“But we understand the point of view of the government of this country… and I don’t think it would be a surprise to anybody, but it is more viable to make cars in other countries.

“(The decision to exit manufacturing) is irreversible”