GM kills Holden
In 2016, GM ceased local manufacturing in Australia. Two months ago, after dismal sales in 2019, GM announced it would kill the Opel-based Holden Commodore and Astra to focus on Holden-badged trucks and SUVs. And now, Australians are forced to confront GM's termination of the Holden brand.
The U.S. automaker apparently ran the numbers back in Detroit on investment and return. Just before 2 p.m. local time Monday in Melbourne, GM and Holden execs announced at a press conference that Holden will be shut down by the end of this year. GM President Mark Reuss released a statement saying, in part, "After considering many possible options – and putting aside our personal desires to accommodate the people and the market – we came to the conclusion that we could not prioritize further investment over all other considerations we have in a rapidly changing global industry."
GM's Australian design and engineering facilities "will be re-consolidated overseas" before closure in July 2020. The Lang Lang proving grounds will cease operations in August. Out of a total 800 workers, 600 will be let go, the remaining 200 staying on to manage aftersales. Holden said it will honor all warranties, offers, and guarantees, and supply service and spare parts for 10 years. Holden is locked into Supercars racing events for this year, but only plans to stay "as long as Holden vehicles are in dealers."
GM's been pulling out of right-hand-drive markets for the past few years, and Australia, New Zealand and Thailand were the only three left. GM said it will wind down sales, design and engineering operations in Australia and New Zealand in addition to killing Holden. It also said China's Great Wall Motor Co had agreed to buy GM's Rayong, Thailand, car manufacturing plant and an engine factory, a transaction expected to be completed by the end of 2020.
The automaker absolved the Holden team of blame, which didn't do much to placate the Australian government. Prime Minister Scott Morrison chastised GM with, "I am angry. ... Australian taxpayers put millions into a multinational company. [GM] let the brand just wither away on their watch." National Industry Minister Karen Andrews was upset Holden didn't tell the government about the move until "just before" the announcement.
GM's SVP for international operations, Julian Blissett, said, "It's not firmed up, but our intent is to stay in the [RHD] market with GM Speciality Vehicles," which would become a sub-brand to serve such markets, and, "We’re in negotiations with our partners to make this happen." Local media think GM wants to sort out an RHD conversion pipeline with Walkinshaw and the company formerly called Holden Special Vehicles. Walkinshaw/HSV has spent the past two years converting the Camaro and Silverado for Oceana. The factory-built RHD Corvette remains on the menu for now, but Holden managing director Kristian Aquiliana advised, "We’re still working out how we will deliver it."
The GM statement calculated the cost of exiting Thailand and Australia in "cash and non-cash charges of $1.1 billion," and "net cash charges of approximately U.S. $300 million." A chunk of that will be used to settle accounts with 185 Holden dealers in Australia and 31 in New Zealand.
If anyone is interested in taking home a Holden keepsake, GM said, "We’re happy to take customer orders until the last Holden in sold."
Material from Reuters was used in this report.
