Holden announces it is leaving Australia, job losses
Scott Morrison has revealed why he is “disappointed” and “angry” that Holden is quitting the Australian market, with 600 workers about to lose their jobs.
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Holden is as Australian as football, meat pies and kangaroos.
But, after decades of business, the door will shut on the iconic car maker’s relationship with the sunburnt country this year, in a decision that yesterday left the Prime Minister “angry”.
Interim chairman Kristian Aquilina said the “agonising” decision to stop selling cars in 2020 came after parent company General Motors ruled out any further investment in the brand.
He said there were “lots of tears” in its Melbourne headquarters, where staff learned more than 600 people would be unemployed by July.
Thousands more, working in Holden’s 185 Australian dealerships, face an uncertain future.
Customers will have access to parts, servicing, warranty and recall work for 10 years under arrangements set to be made with Holden’s dealer network.
About 200 staff will stay on in the short term in Holden’s after-sales operation.
Prime Minister Scott Morrison said he was “disappointed but not surprised” by Holden’s decision.
“I am angry, like I think many Australians would be,” he said.
“Australian taxpayers put millions into this multinational company.
“They let the brand just wither away on their watch. Now they are leaving it behind.
“I think that’s very disappointing, that, over many years, more than $2 billion was directly provided to General Motors for the Holden operations.”
Federal Industry Minister Karen Andrews also told reporters in Sydney: “I’m very disappointed with the decision that Holden has made.”
“The Australian government in various forms has done a lot to support auto vehicle manufacturing here.
“A lot of money has been given to these car manufacturers to try and support them ... that makes it particularly disappointing that they have made the decision that they have.
“Holden is walking away from Australia.”
HOLDEN SAYS IT COULD NOT ‘DEFY GRAVITY’
Mr Aquilina said senior employees fought to save Holden with “ambitious” investment proposals.
“We have had multiple rounds of discussions and tried to find a way to defy gravity,” he said.
“But the truth and the hard truth was there’s just no way to come up with a plan that would support a competitive and growing and flourishing Holden and also provide a sufficient return to our investors.”
Julian Blissett, senior vice president of international operations for GM, said the company “took this very difficult decision with heavy hearts and only did it after looking at every other possible opportunity”.
He said the decision to shutter the business was “no reflection on the capability and commitment of the Holden team”.
“It’s basically based on GM’s global investment priorities,” he said.
“After exhausting numerous options for continuing operations, GM assessed the investment required, including that for future product … regrettably, despite the tireless work of many good people, the business case could not meet GM’s investment thresholds.”
WHEN RIGHT IS WRONG
Part of the problem is Australia’s place as a right-hand drive market.
When Holden announced in 2013 that it would stop building cars in Australia, the plan was to bring in replacement vehicles from around the world.
But GM, a business focused on North America, pulled out of right-hand drive markets such as Japan and the UK, effectively orphaning Australia and New Zealand.
As a brand, Holden does not exist outside Australia and New Zealand, making it tough to justify marketing dollars to compete with global names such as Toyota, Volkswagen and Hyundai.
But a fundamental problem is that many customers left Holden for other brands.
Its share of the market fell from 21.6 per cent in 2002 to 3.7 per cent last month.
A senior multi-franchise Holden dealer, who declined to be named, said Holden’s decision was “not a huge surprise”.
“Customer inquiries have dried up and the franchise is simply not what it used to be,” he said.
Mr Blissett said the choice to shut Holden down “was an agonising decision” for senior leadership within GM who “have a very strong affinity for this iconic brand”.
GM IN THE U.S. SAYS ‘WE WILL SUPPORT OUR PEOPLE’
GM CEO Mary Barra said: “I’ve often said that we will do the right thing, even when it’s hard, and this is one of those times.
“We are resturcturing our international operations, focusing on markets where we have the right strategies to drive robust returns, and prioritising global investments that will drive growth in the future of mobility, especially in the areas of EVs and AVs.”
Ms Barra said that the actions support GM’s global strategy which it laid out in 2015.
“We understand that they impact people who have contributed so much to our company. We will support our people, our customers and our partners to ensure an orderly and respectful transition in the impacted markets.”
Detroit Free Press reported that GM will focus its strategies for Australia and New Zealand “on the GM specialty vehicle business”, working with Holden Specialty Vehicles (HSV).
Former Holden boss Mark Reuss is the president of GM.
He said GM had considered “a range of options” to continue Holden operations. But all would have required large investments for the highly fragmented right-hand-drive market and they would not deliver a return on investment.
“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 prioritise further investment over all other considerations we have in a rapidly changing global industry,” Mr Reuss said.
The move will not affect GM’s US operations, Detroit Free Press reported.
GM’s Spring Hill assembly plant in Tennessee builds the Holden Acadia SUV for Australia, but the volume is so small that it will not affect the plant’s production or employment. The plant will make up the volume with other GMC and Cadillac products.
MINIMAL FUTURE FOR GM DOWN UNDER
Australia’s Mike Simcoe rose from sketching Commodores to become GM’s vice president of global design.
Blissett said General Motors might have a “very minimal” future presence in Australia with low-volume imports from the US.
Chevrolet’s Camaro coupe and Silverado pick-up are converted from left to right-hand drive in Melbourne and sold in small numbers through some Holden Special Vehicles dealerships.
Mr Aquilina said Holden would maintain its support for Supercars racing in 2020.
The manufacturer last year announced a plan to back motorsport to the end of 2021.
Customer reaction on social media was mixed. Some supporters felt saddened by the loss of the Australian brand, while others felt GM’s handling of Holden after its Australian plant closures was “absolutely disgraceful”.
The brand previously committed to supporting Australia’s Supercars category until the end of 2021.
Supercars teams and officials will hold urgent discussions with Holden after parent company General Motors announced it was retiring the automotive brand.
GM’s decision to scrap the brand in Australia and New Zealand by 2021 has sent a shockwave through the Supercars field just days before the start of this year’s championship at the Adelaide 500.
In a post on the company’s Facebook page, Holden said the company’s future within the championship was unresolved.
“We will begin discussions with the organisers of Supercars and Red Bull Holden Racing Team,” the post said.
“We will update you on these discussions at the appropriate time.” Holden provides factory backing to the Red Bull Holden Racing Team featuring former champions Jamie Whincup and Shane van Gisbergen.
A further seven Supercars teams are set to run Commodores in the 2020 championship.
One of those, ex-factory team Walkinshaw Andretti United, expressed their sadness at Monday’s decision.
“Our team has shared a long and successful relationship with Holden in Australia for three decades,” the statement read.
“It’s very sad to see them leave. We are thankful for their support, and proud of what we have achieved together, including seven Bathurst 1000 victories, and six driver championships.”
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Holden said it would “work through” the implications of Monday’s decision with Red Bull Holden Racing Team in regards to its ongoing commitment to the team.
New rules on the way for 2022 will shift the sport away from family sedans such as the Commodore, toward high-performance coupes such as Ford’s Mustang — and potentially, the Chevrolet Camaro.
Originally published as Holden announces it is leaving Australia, job losses