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It's official: General Motors will end Holden's Australian operations this year

What is going on?

The Holden brand will be retired by 2021 in Australia and local design and engineering departments all-but shuttered, General Motors has confirmed.

In what is monumental news for the Australian automotive industry, Holden’s Melbourne design studio and Lang Lang proving ground are expected to shut with up to 600 of 800 local jobs lost.


GM President Mark Reuss said in a statement every effort had been made to retain the Holden brand.

"At the highest levels of our company we have the deepest respect for Holden's heritage and contribution to our company and to the countries of Australia and New Zealand," he said.

"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.

"We do believe we have an opportunity to profitably grow the specialty vehicle business and plan to work with our partner to do that.”

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UPDATES TO COME BELOW:

1.54PM, Holden press conference, Julian Blissett and Kristian Aquilina:

This was an “agonising decision for us.”

This “will impact all functions except for aftersales.”

Aftersales will continue for next 10 years.

“GM design Australia and GM engineering in Australia will be re-consolidated overseas,”

Work at Salmon St will cease at end of July 2020.

Lang Lang will operate until end of August 2020.

“We have developed a fair compensation package” for dealers and employees.

“More broadly, it was a question of scale.”

It’s hard to prioritise an operation that’s in just two markets.

“It cannot be sustained for the future.”

What Holden’s closure means for the Colorado and Trailblazer
2.10PM, press conference continues:

“Several thousand [cars in inventory]. We need to see what we’ve got currently in dealer inventory and what’s in the pipeline coming toward them.”

“We’re happy to take customer orders until the last Holden in sold.”

There are 185 dealers in Australia and 31 in NZ.

2.18PM, update on Holden in racing:

"Holden has made a commitment for the 2020 season, as long as Holden vehicles are in dealers." (Aquilina)

"We do see a future for GM in these [RHD] markets. Not firmed up, but our intent is to stay in the market with GM Speciality Vehicles – that is our intent. We’re in negotiations with our partners to make this happen." (Blissett)

"Corvette in right-hand drive will exist, but we’re still working out how we will deliver it. We’ve got to make some decisions on what we do with Corvette in Australia and New Zealand." (Aquilina)

Total cost to GM to wind down Holden

“It’s an expensive undertaking, and an agonising decision for us”. Total bill to wind down Australia and Thai operations will be “north of a Billion dollars”

Not at liberty to discuss internal plans and scenario planning RE: dollar value of investment sought from GM. Reality is that the costs ‘were significant’ and ROI wasn’t guaranteed.

One can reasonably assume that $1bn shutdown was deemed the cheaper option.

2.26PM

GM has sold Rayong plant to Great Wall. Australian Colorado was the primary product of that plant, however the plant as a whole has been severely under-utilised for years and thus a burden to GM.

“If there is an on-going presence, it will be a minimal one.” – Aquilina

 

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Discussion Starter #2
OFFICIAL GENERAL MOTORS PRESS RELEASE
GM Accelerates Transformation of International Markets

  • GM to cease Holden sales, design and engineering operations by 2021, plans to focus on growth opportunities in specialty vehicle business
  • GM and Great Wall Motors sign binding term sheet for sale of Thailand manufacturing plant
  • Chevrolet to cease domestic sales in Thailand by end of 2020
General Motors (NYSE: GM) is taking decisive action to transform its international operations, building on the comprehensive strategy it laid out in 2015 to strengthen its core business, drive significant cost efficiencies and take action in markets that cannot earn an adequate return for its shareholders.

GM announced today that it would wind down sales, design and engineering operations in Australia and New Zealand and retire the Holden brand by 2021. The company will focus its strategies for the market on the GM specialty vehicle business. The company also announced that it had signed a binding term sheet with Great Wall Motors to purchase GM's Rayong vehicle manufacturing facility in Thailand; and would withdraw Chevrolet from the domestic market in Thailand by the end of 2020.

"I've often said that we will do the right thing, even when it's hard, and this is one of those times," said GM Chairman and CEO Mary Barra. "We are restructuring our international operations, focusing on markets where we have the right strategies to drive robust returns, and prioritizing global investments that will drive growth in the future of mobility, especially in the areas of EVs and AVs.

"While these actions support our global strategy, 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."

GM President Mark Reuss said the company explored a range of options to continue Holden operations, but none could overcome the challenges of the investments needed for the highly fragmented right-hand-drive market, the economics to support growing the brand, and delivering an appropriate return on investment.

"At the highest levels of our company we have the deepest respect for Holden's heritage and contribution to our company and to the countries of Australia and New Zealand," said Reuss.

"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.

"We do believe we have an opportunity to profitably grow the specialty vehicle business and plan to work with our partner to do that," he concluded.

GM also undertook a detailed analysis of the business case for future production at the Rayong manufacturing facility in Thailand. Low plant utilization and forecast volumes have made continued GM production at the site unsustainable. Without domestic manufacturing, Chevrolet is unable compete in Thailand's new-vehicle market.

GM Senior Vice President and President GM International Steve Kiefer said these decisions built on the announcement in January that GM would sell its Talegaon manufacturing facility in India; significant restructuring actions implemented in Korea; and investment in and continued optimization of South American operations.

"These are difficult decisions, but they are necessary to support our goal to have the GM International region on the pathway to growth and profitability," said Kiefer.

"GM is well positioned in our GM International core markets: South America, the Middle East and Korea."

GM International Operations Senior Vice President Julian Blissett said that as well as implementing plans in international core markets, GM was continuing to optimize partnerships in markets like Uzbekistan, by transferring assets and building strong supply chains to reduce costs in growth markets.

"In markets where we don't have significant scale, such as Japan, Russia and Europe, we are pursuing a niche presence by selling profitable, high-end imported vehicles – supported by a lean GM structure," said Blissett.

"We will continue to implement these critical business strategies, while delivering a dignified and respectful transition in impacted markets."

In Australia, New Zealand, Thailand and related export markets, customers can be assured that GM will honour all warranties and continue to provide servicing and spare parts. Local operations will also continue to handle all recall and any safety-related issues, working with the appropriate governmental agencies.

As a result of these actions in Australia, New Zealand and Thailand, the company expects to incur net cash charges of approximately $300 million. The company expects to record total cash and non-cash charges of $1.1 billion. These charges will primarily be incurred in the first quarter and continuing through the fourth quarter of 2020. These charges will be considered special for EBIT-adjusted, EPS diluted-adjusted and adjusted automotive free cash flow purposes.
 

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Gee, low sales numbers wouldn't have anything to do with it, would it?
I'd think so. Back when Chrysler went bankrupt in 07/08 Chrysler Canada was going to keep their side going with cars sourced elsewhere because they weren't bankrupt and were profitable so if Holden Austrslia doesnt even have that option.....
 

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Smart Ass Conservative
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To many oil leaks ?
 

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A Fine Example For Others
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Well, no one to blame by aussie's themselves. I see a big jump in price for the vintage Holdens floating around, so that's a plus.
 

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MFI on CH3OH
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Well, no one to blame by aussie's themselves. I see a big jump in price for the vintage Holdens floating around, so that's a plus.
Problem is they dropped the rear wheel drive platform and started peddling front wheel drive sedan euro made shit.

Holdens problem started when fuel prices started getting crazy here crica 2000ish, they had cars that ate fuel like no ones business and were under powered. By the time they got round to offering powerful economical alternative drive lines most people had invested in different vehicles.
 

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Big Trev is a great guy!
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I dont feel sorry for GM or Holden. They swindled taxpayers out of $300m and then closed the plants and sacked everyone 5 years later. The unions played a part in that, but GM just took the taxpayers money and ran. Then they decided that only hipsters and millennial's would buy new cars and their advertising reflected that, which burnt off the loyal core of supporters they still had. Their new cars were cheap and nasty or fragile European crap. They had the Colorado Ute, but it was overpriced and under powered and as a result, it didn't sell for shit. They didnt see the winds of change blowing through and didnt bring in the Camaro or Corvette in right hook and sat back as Ford blew them away in the dealerships with the Ranger and blew them away on the track with the Mustang.

They totally butchered a once glittering operation.
 

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The writing has been on the wall for a few years now , ford made an affordable RHD Mustang that is selling its pants off , GM and GMH missed the boat with the Camaro, selling at $30k more , plus a wrong wheel drive replacement for the Commode which killed sales by near on 70% - Holden has been dead for 2 years, just hadnt stopped moving yet ...............
 
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