The company confirmed this morning that it intends to wind down sales, design and engineering operations in both Australia and New Zealand and retire the Holden brand by next year, axing about 600 jobs.
GM President Mark Reuss said the company had considered a range of options to continue Holden operations, but that none of those options 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 prioritise 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.”
GM Chairman and CEO Mary Barra said, of the decision: “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 restructuring 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 (electric vehicles) and AVs (autonomous vehicles).
“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 has committed to honouring all warranties and continuing to provide servicing and spare parts in Australia.
Local operations will also continue to handle all recall and any safety-related issues, working with government agencies.
The closure of the Holden Elizabeth plant in 2017 marked the end of car manufacturing in Australia.
The history of Holden began as early as 1858 in Adelaide, when James Holden, a 28-year-old leatherworker, opened a shop in Gawler Place, according to former South Australian Integrated Design Commissioner Tim Horton, writing for InDaily in 2013.
“Holden continued to diversify, merging with a carriage building company in 1885 to form Holden and Frost at a bigger plant on Grenfell Street and giving them the foundation to bid for contracts supplying defence materiel for the Boer War,” Horton wrote.
“But it was in 1923 that Holden’s move in to the global market set them up to both grow, and falter.
“Holden signed a deal with US Maker, General Motors, at first as an exclusive contract for Holden to build – on their terms – bodies for GM cars in Australia.”
You can read Horton’s full account here.
Today’s announcement is among several major moves by the company unveiled today, including that it had signed a binding term sheet to sell Rayong vehicle manufacturing facility in Thailand to Great Wall Motors; and that GM would withdraw Chevrolet from the domestic market in Thailand by the end of 2020.
GM Senior Vice President and President GM International Steve Kiefer said the decisions built on the announcement in January that GM would sell its Talegaon manufacturing facility in India, significant restructuring actions implemented in Korea and new investments in its 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.”
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