General Motors to kill off Holden brand in Australia and New Zealand
Prime Minister Scott Morrison has slammed General Motors for taking billions of dollars in government subsidies only to let the Holden brand die.
Prime Minister Scott Morrison has voiced his anger over General Motors taking billions of dollars in government subsidies only to let the Holden brand die and then walk away from the Australian market.
General Motors on Monday announced it was retiring the Holden brand from sales in Australia and New Zealand after the company ceased local manufacturing in 2017.
The decision will close all the brand’s import operations, its engineering and design facilities, plus its finance arm and ride-share operation Maven by June.
Around 800 employees in Australia and New Zealand will be affected, with at least 560 redundancies.
It will also impact 185 dealers with the removal of Commodore, the Colorado ute, Astra small car and a range of SUVs from showrooms by the end of the year.
General Motors International operations Senior Vice President Julian Blissett said in a statement that after considering their options, ongoing business was not viable.
“I am angry,” Scott Morrison told reporters in Melbourne, noting governments had contributed more than $2 billion to General Motors.
“They took money from Australian taxpayers for all those years just to let the Holden brand wither on their watch - that’s disappointing.
“Throwing all that taxpayers’ money at them - at the end of the day they were never going to respect it.”
Mr Morrison vowed to look after the roughly 600 workers who will lose their job, stating Canberra would “work with them to ensure they can move into new industries”.
GM announcement ‘particularly disappointing’
Industry Minister Karen Andrews has blasted General Motors and Holden for failing to inform the government they were axing the brand in Australia.
Ms Andrews said the announcement that “Holden is walking away from Australia” marked “the end of an era”, and that it was “particularly disappointing” given government investment and assistance to the car industry.
She said Holden had contacted Scott Morrison “just before” making the public announcement, and that mostly sales, marketing and human resources jobs would be affected.
“This is a very disappointing outcome. It’s disappointing because there will be several hundred workers that are about to lose their jobs because of this decision that’s been made by Holden, and it’s disappointing that they only advised the government of this decision just before their announcement,” Ms Andrews said at a press conference in Sydney on Monday.
“I have had the opportunity to speak to Holden very briefly since their announcement. It’s very clear to them how disappointed the government is with this decision and the way that they have gone about announcing this decision.
“My first car was a Holden Torana that I bought from my grandfather, so like many Australians Holden has a place in my personal history and Holden is a manufacturer, it is a vehicle that is near and dear to many Australian hearts, so it’s disappointing that this is the end of an era.
“I have been assured by Holden, that they will do all that they can to support the workers that have been displaced by this decision.
“They’ve made it very clear that their decision has nothing to do with government policy. It was a result of a business case that they had developed here in Australia that they believed was no longer sustainable.”
Ms Andrews said finding alternative employment for workers would be a priority.
“The Australian government will do all that it can to assist the displaced workers to look at other opportunities. We will also do all that we can to make sure that Holden is held to account for the promises that it has made to me personally and to the government that it will support workers, and it will support the dealers who have been affected by this decision.
“I intend to have further discussions with Holden over the coming days and weeks. The Australian government in various forms has done a lot to support. Auto vehicle manufacturing here in Australia. We’ve made it very clear that we will look at the automotive sector.”
Ms Andrews continued: “It’s true a lot of money has been given to these car manufacturers to try and support them here. That makes it particularly disappointing that they’ve made the decision that they have and that effectively Holden is walking away from Australia.”
“I don’t think it’s acceptable for Holden to have made this decision without any consultation with government and without significant advice of that decision. Now I understand they need to communicate and consult with their workers, but quite frankly, this is an unacceptable process that Holden has undertaken so yes I will be speaking to board and I will be asking what their plans are of course it will be up to them how much information they choose to divulge.”
“To make an announcement of such significance. I think it would have shown a considerable amount of goodwill, as well as decency in picking up the phone and talking to government beforehand.”
Holden ‘no longer viable’
“Through its proud 160-year history, Holden has not only made cars, it has been a powerful driver of the industrialisation and advancement of Australia and New Zealand,” Mr Blissett said.
“Over recent years, as the industry underwent significant change globally and locally, we implemented a number of alternative strategies to try to sustain and improve the business, together with the local team.”
GM closed the company’s local manufacturing operations in 2017.
General Motors said that one of the reasons the brand will be scrapped was the “highly fragmented right-hand-drive markets” and the cost of “growing” the brand to deliver a return on investment.
“After comprehensive assessment, we regret that we could not prioritise the investment required for Holden to be successful for the long term in Australia and New Zealand, over all other considerations we have globally,” Mr Blissett said on Monday.
GM said Holden employees would be provided with separation packages and employment transition, though it was not initially clear how many jobs would go. It has also pledged to work with its dealer network on transition arrangements, with dealers to be able to continue as authorised service outlets for Holden customers.
The company will also honour all warranties and provide servicing and spare parts for all Holden vehicles for at least 10 years.
Sinking sales
Holden sales have plummeted over the past two years in the wake of its factory closure and replacement of the locally built Commodore with a rebadged Opel import. In its final year in production, the sedan attracted almost 24,000 buyers but last year’s total was fewer than 6000.
The Colorado ute, imported from Thailand, took over as its best-seller but a range of SUVs shipped from the GM’s American plants failed to gain traction and buyers deserted the brand.
With Holden sales haemorrhaging, Detroit lured a former Toyota boss out of retirement to turn things around but he quit late last year and the brand finished with an all-time low market share of just 4 per cent.
Along with its factory closure, Holden cut a swathe through its dealer network – once one of the most extensive in the country – and the national dealer body reacted angrily to the news yesterday.
“This was a decision made in Detroit and highlights the vulnerable position in which franchised new car dealers can find themselves,” the chief executive of the Australian Automotive Dealer Association, James Voortman, said.
“The social and economic effect of this development should not be underestimated.”
The ACTU sheeted the blame back to the factory closure decision, taken when Tony Abbott was prime minister, and accused the government of failing to protect jobs.
“The Prime Minister like to talk about creating local jobs and never misses a photo op, but he’s missing in action when it comes time to ensure that local workers have secure jobs they can count on,” ACTU secretary Sally McManus said.
“The Abbott Government was the beginning of the end for the Australian car industry, now the Morrison Government is finishing the job.
“The announcement marks a sad day for many Australians who took pride in the Holden brand as an icon of Australian ingenuity, something the Morrison government has never understood or valued.”
‘Surprise move’
AMWU national vehicle division secretary Dave Smith said a significant proportion of the 600-800 workers who would lose their jobs were members of his union.
Mr Smith said he was “surprised” by the news.
“It’s come about with no indication that this was going to occur,” he said.
However, Mr Smith said redundancy packages had been successfully negotiated last year.
“All of that has been taken care of. It’s really now about getting out and talking to them and ensuring the proper support mechanisms are in place to help them transition to new employment,” Mr Smith said.
He said the decision would mean job losses at Holden’s proving ground at Lang Lang, southeast of Melbourne, as well as at head office at Port Melbourne.
Parts warehouse operations at Dandenong South will not be immediately affected.
Mr Smith blamed globalisation, free trade and the Abbott government’s 2014 decision to cut automotive industry subsidies for the closure.
“If you have open markets there are winners and losers and blue collar workers have been a major loser out of this,” he said.
“That decision of the Abbott government has really cost Australia thousands and thousands of jobs.”
Mr Smith said some of those who would lose their jobs had been redeployed after General Motors closed its Fishermans Bend assembly line in 2016.
Announcement ‘will be felt deeply’
Holden interim Chairman and Managing Director Kristian Aquilina said that given the significance of Holden through its history, it was critical the company worked with all stakeholders to deliver a dignified and respectful wind-down.
“Holden will always have a special place in the development of our countries. As Australia and New Zealand grew, Holden was a part of the engine room fuelling that development,” he said.
“Today’s announcement will be felt deeply by the many people who love Holdens, drive Holdens and feel connected to our company which has been with us for 160 years and is almost ubiquitous in our lives.
“Unfortunately, all the hard work and talent of the Holden family, the support of our parent company GM and the passion of our loyal supporters have not been enough to overcome our challenges.”
As part of the wind-down, Holden Financial Services will also cease operations.
The decision could mean the end of traditional rivalry on the racetrack between Holden and Ford.
Holden Motorsport officials are set to have urgent discussions with Supercars officials and team bosses after the decision by General Motors to retire the brand.
The future of several Supercars teams is up in the air. Holden provides factory-backing to Supercars team Red Bull Holden Racing Team while there are a further seven teams running Commodores in this year’s championship, which starts this weekend at the Adelaide 500.
We are saddened by Holden’s closure announcement. Holden was always a fierce rival. A great Aussie brand coming to an end is sad for our country, no matter your allegiance. We feel for those affected, and look forward to continued strong competition on the track. #VASC #Holden pic.twitter.com/g16q44RUzS
— Shell V-Power Racing (@DJRTeamPenske) February 17, 2020
‘Inaction’ condemned
Shadow industry spokesman Brendan O’Connor said successive Coalition governments had “goaded Australia’s car manufacturers to leave our shores.”
“Today’s announcement is a consequence of that decision,” Mr O’Connor tweeted.
“We’re losing one of Australia’s most iconic brands due to the inaction of this (Government).”
Opposition leader Anthony Albanese also blamed Holden’s axing on “a decision that dates back to 2013 when the Liberals dared Holden to leave.”
“This is about more than just a car. For many Australians, Holden is part of their family story,” Mr Albanese tweeted.
Here’s an ad we’ll never see again.
— Anthony Albanese (@AlboMP) February 17, 2020
Holdens will ceast to exist by the end of 2020 – a decision that dates back to 2013 when the Liberals dared Holden to leave.
This is about more than just a car.
For many Australians, Holden is part of their family story.
The end of an era. pic.twitter.com/ZRrwbLSjRo
Labor blames government ‘hostility’ towards GM
Senator Kim Carr has scolded the government for “persistent hostility” towards General Motors, blaming policies towards manufacturing and indifference to contracts and other initiatives for the downfall of Holden in Australia.
The former shadow industry spokesman also told The Australian that comments by Industry Minister Karen Andrews blasting Holden for failing to inform the government it was leaving the Australian market were “less than disingenuous”.
“This is the direct result of decisions made by Joe Hockey and Tony Abbott to end car manufacturing in Australia,” Senator Carr said.
“The Liberals have shown absolutely no regard for the consequences of their actions.”
Senator Carr told The Australian the motoring company had come to him in 2018 when he was shadow industry spokesman complaining the government had knocked them back for an appointment request when they applied for the National Interest Test.
“Even when General Motors committed $120 million and 150 jobs for a global research and development centre in Port Melbourne in 2018, but they had no support from the government, they couldn’t even get an appointment with the minister. Why didn’t they get appointments about the national interest test?”
“They had a contract for armour plated vehicles for the Prime Minister taken off them after they’d won the contract, and then they couldn’t even get on the list of preferred vehicles for comcar replacements.”
“I’ve spoken to very senior people in General Motors in the United States and there’s deep distress in the company at the consequences of this failure.”
“This is a matter of peak despair for Australia. 160 years of history are being lost because of negligence by the government of Australia.”
Additional reporting: Angelica Snowden, Rachel Baxendale, AAP
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