Holden Calais 2001 News

The move has come as as it became increasingly clear that it does not make financial sense for the company or the country. But did Holden and its factory workers deserve the public bollocking they’ve received from the Federal Government over the past week?Holden’s crime was to build a factory in what was once the semi-rural outskirts of Adelaide in 1963, that 50 years later would be suffocated by low-cost labour from our Asian neighbours.At its peak, Holden employed more than 20,000 workers across seven manufacturing facilities. Now there is just one car assembly line and 1760 workers.Policies from both sides of government over the past half a century have helped shape the economic headwind that Holden drove into: a wealthy nation with a strong currency, high wages and among the lowest import tariffs in the automotive world.Holden, against this stark backdrop, came to the government for assistance, just as it always has done, in much the same way farmers get a helping hand in times of drought.The difference, however, is that the future of Australian manufacturing remains bleak because the economic fundamentals are unlikely to change anytime soon.When Ford announced in May that it would close its Australian factories in 2016, Holden privately wondered why Ford didn’t even give the government the opportunity to help.It has since emerged that even doubling the government assistance to Ford would not have been enough to save it.But because Holden feels that its brand image is so closely linked to manufacturing -- even if most of the cars in Holden showrooms today come from South Korea and Thailand -- it decided to raise its hand, Oliver Twist-style, and utter "please, sir, can we have some more?".Given recent events, however, Holden is probably reconsidering that decision.The one good call the Federal Government has made in the middle of this Holden sledging campaign is to announce that it will buy bomb-proof BMWs for its politicians instead of hand-built Holdens that can barely withstand a hand-grenade.Holden was criticised for not pitching for the business. But Holden knows that the likes of Audi, BMW and Mercedes-Benz have specialist divisions that can deliver better equipped armoured cars for less money -- a fitting analogy for the rest of the car industry in fact.For example, the Cruze is the cheapest locally-made Holden in 20 years. But its sales have been dented by better equipped and cheaper cars from Japan -- buoyed by a currency that has been artificially devalued by the Japanese government.So where did it all go wrong for Holden?Holden should have cut its production costs sooner than it did (three months ago it got workers to agree to a three-year wage freeze if the new deal goes ahead).But Holden cannot be accused of not reacting quickly enough to the changing tastes of Australian car buyers.It got the Cruze small car into the Elizabeth factory and built it alongside the Commodore in less than two years, in the height of the Global Financial Crisis, when normally such efforts can take up to five years.No-one wants to take responsibility for Holden's manufacturing shutdown. In the end, Holden was in the wrong place at the wrong time. Official statement from HoldenAs part of its ongoing actions to decisively address the performance of its global operations, General Motors today announced it would transition to a national sales company in Australia and New Zealand. The company also said it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.“We are completely dedicated to strengthening our global operations while meeting the needs of our customers,” said GM Chairman and CEO Dan Akerson. “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”As a result of the company’s actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.Holden will continue to have a significant presence in Australia beyond 2017, comprising a national sales company, a national parts distribution centre and a global design studio.GM Holden Chairman and Managing Director Mike Devereux said an important priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” said Devereux. “We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.”The sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged.“GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government’s point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers,” Devereux said.Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar’s peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.With the decision to discontinue vehicle and engine manufacturing in Australia by the end of 2017, GM expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013. The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs. Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees’ union. The asset impairment charges will be considered special for EBIT-adjusted reporting purposes. Holden milestones1948Prime 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 £100.1954One in three cars on the road is a Holden.1958One in two cars on the road is a Holden.1960The first export of left-hand-drive Holden vehicles begins with a small shipment of cars to Hawaii.19621 millionth Holden sold (EJ Special sedan, Oct 1962).1964Holden employee numbers peak at 23,914 across seven facilities in Queensland, NSW, Victoria and South Australia.19692 millionth Holden sold (HK Kingswood, March 1969).19743 millionth Holden sold (HQ Kingswood, June 1974).1978Holden celebrates 25 years of continuous sales leadership.19814 millionth Holden sold (VC Commodore, June 1981).19905 millionth Holden sold (VN Calais, August 1990, more than twice as many as any other Australian built car at the time).1991Japanese car-maker Toyota beats Holden and Ford to market leadership for the first time in Australia.20016 millionth Holden sold (VX Commodore SS, June 2001).2002The last year Holden led the Australian new-car market.2004Holden produces 165,000 vehicles (the most in its modern era), almost matches the 1963 peak of 166,274. Factory worker numbers in 2004: 7350.2005Holden’s biggest export year: 60,518 cars were shipped, mostly to the US and the Middle East.20087 millionth Holden sold (VE Commodore LPG, Aug 2008).2011After 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.2013Toyota 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.

A decision on Holden's future is a mere pen-stroke, email or phone call away -- and it could now happen before Christmas after the Federal Government increased its pressure on the iconic car-maker.News Corp Australia understands the global CEO of General Motors, Dan Akerson, based at the company's headquarters in Detroit, has the sole discretion to sign away Holden's manufacturing operations and with it the jobs of 1760 factory workers.Contrary to earlier reports -- and protocols at other companies -- the Holden decision does not need to go to the General Motors board, which meets monthly.Mr Akerson is a $12 million-a-year man who served as an officer on a US naval destroyer in the 1970s.  In just three years he has developed a reputation in Detroit as not being afraid to make tough calls, such as shutting factories or axing entire brands, such as Pontiac and Hummer and the sale of Swedish icon Saab.A self-confessed "non-car guy", Mr Akerson has helped reshape General Motors globally since it came out of bankruptcy, driven the company to record profits and, as of yesterday, finished repaying the $50 billion loan from the US Government, which sold its remaining shares in GM.In a recent interview with USA Today, when asked about the secrets to his success and the transformation of General Motors, Mr Akerson said: "You can't live in a crisis mode … fundamentally I've got to run a business that's gonna turn profits."Holden has lost $432 million over the past five years and the company openly admits it loses money on each car it builds locally. Mr Akerson speaks about "fortress balance sheets" and taking emotion out of decisions by being able to "define reality"."That was necessary in this industry and in General Motors," he told USA Today. "Once you define reality you have to provide a vision."With pressure from the Federal Government reaching new heights after the Treasurer Joe Hockey said of Holden in Question Time "either you're here, or you're not", General Motors is increasingly being left with no option but to shut the car-making factory that Queen Elizabeth II visited in its opening year, in 1963.It is possible an announcement by Holden could come on or before December 20 -- the last day of work for Holden factory employees before the scheduled summer shutdown, and the same day the preliminary report by the Productivity Commission is due to be released.An early announcement would alleviate the uncertainty being felt by Holden factory workers and minimise the potential damage being done to the company's brand image.When asked yesterday if Holden felt pressured by the Federal Government to announce a shutdown sooner rather than later, Holden boss Mike Devereux said: "Everything that could have been asked of me has been asked of me (at the Productivity Commission hearing). No decision has been made by General Motors."When asked by News Corp Australia if an announcement would be made before or after Christmas, Mr Devereux and Holden representatives declined to answer.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.Central to the debate over the Holden shutdown is the definition of the word "decision". In car industry terms, executives may have made up their minds on an outcome, but a "decision" is a more formal process.It took Ford more than 300 meetings and seven years to arrive at its decision to shut its Australian factories, and Mitsubishi was questioned for four years before its eventual shutdown, the Federal Government is trying to force Holden to announce its bad news within months.When Ford announced the 2016 shutdown its Australian factories, the decision was made at board level and included input from executive chairman William Clay Ford Jr, and Edsel Ford, both great-grandsons of Henry Ford. It then took several days for the announcement to be made to Ford workers on the factory floor.When asked by the Productivity Commission how much extra money Holden had asked from the Federal Government, Mr Devereux said the government had the figures and would not disclose them publicly.Carsguide understands Holden had asked for an average of $150 million per year -- the annual figures fluctuate to match the progress of vehicle development.In March 2012 Holden agreed to invest $1 billion in two new cars to be built from 2016 to 2022, in return for $275 million in taxpayer assistance -- $215 million from the Federal Government, $50 million from the SA Government and an estimated $10 from the Victorian Government.However after Ford announced in May this year that it was closing its factories in 2016, Holden has asked for an increase in taxpayer support because, it says, market conditions have "changed significantly" since the original deal was signed.Holden milestones1948Prime 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 £100.1954One in three cars on the road is a Holden.1958One in two cars on the road is a Holden.1960The first export of left-hand-drive Holden vehicles begins with a small shipment of cars to Hawaii.19621 millionth Holden sold (EJ Special sedan, Oct 1962).1964Holden employee numbers peak at 23,914 across seven facilities in Queensland, NSW, Victoria and South Australia.19692 millionth Holden sold (HK Kingswood, March 1969).19743 millionth Holden sold (HQ Kingswood, June 1974).1978Holden celebrates 25 years of continuous sales leadership.19814 millionth Holden sold (VC Commodore, June 1981).19905 millionth Holden sold (VN Calais, August 1990, more than twice as many as any other Australian built car at the time).1991Japanese car-maker Toyota beats Holden and Ford to market leadership for the first time in Australia.20016 millionth Holden sold (VX Commodore SS, June 2001).2002The last year Holden led the Australian new-car market.2004Holden produces 165,000 vehicles (the most in its modern era), almost matches the 1963 peak of 166,274. Factory worker numbers in 2004: 7350.2005Holden’s biggest export year: 60,518 cars were shipped, mostly to the US and the Middle East.20087 millionth Holden sold (VE Commodore LPG, Aug 2008).2011After 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.2013Toyota 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 _______________________________________