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Holden: "No decision has been made"


Holden has contradicted Federal Government leaks by emphatically declaring “no decision has been made” to close its manufacturing operations in Australia. Holden boss Mike Devereux made the comments as he left a Productivity Commission hearing in Melbourne this morning.

However a formal decision to shut the Elizabeth car making factory is believed to be a formality given the hardline stance of the Federal Government to not increase taxpayer funding to the industry, and Holden’s request for more assistance. Carsguide understands the decision to shut Holden’s manufacturing operations will eventually come from General Motors executives in Detroit, but Mr Devereux and other Holden executives this morning declined to speculate when that might occur.

In the hearing Mr Devereux repeated Holden’s earlier arguments for an increase in taxpayer funding, including its claim that its manufacturing operations created $32.7 billion in economic activity over the past 12 years. However, Mr Devereux also confirmed for the first time that the two vehicles it planned to build from 2016 to 2022 will have much lower levels of local content.

It means that saving Holden won’t necessarily save up to 50,000 jobs in the rest of the automotive parts supply industry -- one of Holden’s central arguments during its campaign. "We’ve been relatively public that … were we to move forward the general notion is that you would see globalisation levels for suppliers more in line with what you have today on the Cruze," Mr Devereux told the hearing.

Earlier, Mr Devereux said the local content of the Cruze was "25 to 30 per cent", compared to 50 per cent for the Commodore. By comparison the local content of the Toyota Camry and Ford Falcon is 70 per cent, according to figures supplied by the car makers.

The deputy chairman of the Productivity Commission and the presiding commissioner on the inquiry into the automotive industry, Michael Woods, asked Holden for access to a report prepared by Adelaide University Professor Goran Roos. The secret document, as reported exclusively by us last month, revealed Holden’s plans for a “significant reduction” in the local content of its future models. The report, labeled "Cabinet in Confidence", was prepared in August 2013 with co-operation and input from Holden and the unions.

After the hearing Mr Woods told Carsguide: "We certainly did want to enquire what would be the local componentry of the new models. The whole supply chain is of very great concern to our deliberations."

Mr Devereux told the hearing that Australian vehicle component suppliers could pitch for global supply contracts. However, the confidential document that Holden helped prepare claims that local suppliers would likely be locked out of winning overseas contracts. “Even if an Australian-based supplier could offer a cheaper alternative for (Holden) locally it would not be adopted as it could interfere with the broader global GM supplier relations,” the report says.

Holden milestones

1948
Prime Minister Ben Chifley unveils the first Holden car, declares “she’s a beauty”. More than 18,000 orders are held before the 48-215 “FX” Holden goes on sale. Some customers sell their place in the queue for £100.

1954
One in three cars on the road is a Holden.

1958
One in two cars on the road is a Holden.

1960
The first export of left-hand-drive Holden vehicles begins with a small shipment of cars to Hawaii.

1962
1 millionth Holden sold (EJ Special sedan, Oct 1962).

1964
Holden employee numbers peak at 23,914 across seven facilities in Queensland, NSW, Victoria and South Australia.

1969
2 millionth Holden sold (HK Kingswood, March 1969).

1974
3 millionth Holden sold (HQ Kingswood, June 1974).

1978
Holden celebrates 25 years of continuous sales leadership.

1981
4 millionth Holden sold (VC Commodore, June 1981).

1990
5 millionth Holden sold (VN Calais, August 1990, more than twice as many as any other Australian built car at the time).

1991
Japanese car-maker Toyota beats Holden and Ford to market leadership for the first time in Australia.

2001
6 millionth Holden sold (VX Commodore SS, June 2001).

2002
The last year Holden led the Australian new-car market.

2004
Holden produces 165,000 vehicles (the most in its modern era), almost matches the 1963 peak of 166,274. Factory worker numbers in 2004: 7350.

2005
Holden’s biggest export year: 60,518 cars were shipped, mostly to the US and the Middle East.

2008
7 millionth Holden sold (VE Commodore LPG, Aug 2008).

2011
After 15 years as Australia’s favourite car, Holden Commodore sales are overtaken by the Mazda3 from Japan. Automotive historians say it is the first time since WWI an imported car has led the new-car market.

2013
Toyota Corolla on track to become Australia’s top-selling car for the first time.

Only five out of 100 new cars sold in Australia is a locally-made Holden.

Holden is overtaken in some months by Mazda, Hyundai and Nissan.

After several redundancies and a three-year wage freeze, Holden factory worker numbers fall to 1760.

Despite a record new-car market, Australian vehicle production falls to its lowest levels since 1958.

Holden is on track to export just 14,000 of the 84,000 cars it will make locally.

This reporter is on Twitter: @JoshuaDowling

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