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The Death Of An Australian Icon: Holden Is Lion Down.

1463753_10153583176800693_1881246771_nFor a bloke raised with the great triumvirate of car makers of Chrysler, Ford and General Motors-Holden, in the late ’60s and early ’70s, the news on a day that numerologists were salivating about (11/12/13) came as expected but still deeply unwelcome to me. The once great company, known as Holden, will be ceasing manufacturing in 2017. Just a few months after its also once great rival, Ford Australia, announced the same news, the unwanted confirmation was announced mid afternoon.

Sadly, it appears to be a combination of factors but a situation that will keep conspiracy theorists happy for a while. What is known: GM honcho Dan Akerman, a self confessed “non car guy”, advised Aussie boss Mike Devereux by phone just hours after Devereux said there still was no decision. In the statement to the press by Devereux is this: “The unfortunate fact is that as I stand here today, GM already has all the information it needs to know that our Next Gen business case is not viable.” And: ” We have looked at every possible option to build the Next Gen products here in Australia. But no matter which way we applied the numbers, the long-term business case is simply not viable.” Within the statement is no mention of lack of support financially from the Federal Government, however it’s this potentially vital point that will be debated for the next few years.

Whether or not the Labor Party’s proposal to fund around $150 million per year for the foreseeable future would have worked tied in with what could justifiably be seen, in some areas, as an unnecessary delay by the Federal Government, would have worked has now been rendered a moot point. What is undoubted is the closure of the engine plant in Port Melbourne (Victoria) with the loss of 1300 jobs, the body manufacturing plant in Elizabeth (South Australia) with 1600 positions to go plus the world renowned proving grounds at Lang Lang, Victoria. There will be a retention of a Global Design Studio plus staff enough to manage the transition from a manufacturing base to a sales and marketing company.

In a recent interview, when asked about the secrets to his success and the transformation of General Motors, Mr Akerson said: “Fundamentally I’ve got to run a business that’s gonna turn profits.” This isn’t surprising, given the financial mess the American Big 3 found themselves in recently.  However it’s this statement that, at its heart, provides the reason behind the decision: it’s business. However the reason for the rot goes back a long way. Some say it was Holden’s reluctance, along with Ford, to move with demand and provide the vehicles the market and therefore, the public wanted. Akerman said: “It was a perfect storm of negative influences which include 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”. Others say the high cost of living in Australia, the required amount of wages conspiring with a shift to a demand for smaller cars (and, some will argue, better quality) and SUVs alike up against the cost of manufacturing and the unsustainable losses on each Australian built car, are to do with the end result.

From here, there’s an economic cost,with figures of around $21 billion being thrown around. There’s the human cost, not just the 2900 or so workers directly affected but those in associated automotive industries, the suppliers and parts manufacturers, to the car and courier and truck drivers plus local businesses that depended on the workers spending their dollars with them, such as the humble sandwich bar and local pubs where workers may go for a frothy after a shift.

With a large range of cars available to cater for all parts of the market, Holden certainly ticks the boxes for diversity; the Commodore (enjoying a sales resurgence and, somewhat ironically, getting rave reviews in the US), the Malibu, Cruze, Colorado, Barina and Trax but with just the Commodore built almost start to finish here whilst the Cruze is assembled here, the costs to build were being swamped by the relatively low sales numbers in a market comparatively miniscule on a world scale.1950-48-215 Holden-ute 001

Sadly, regardless of the debate, it’s a done decision and unless something truly miraculous happens, come 2016 and 2017, where the two separate manufacturing plants finally close, there’ll be many a tear shed, no doubt a few choice words directed at politicians but finally, the doors will close and Holden, after a long and chequered history as a manufacturer, kicking off with the fabled 48-215 through to the iconic catchphrase of “football, meat pies, kangaroos and Holden cars”, down to the classy VF Commodore, will be lion down.

One comment

  1. Chris Keating says:

    Photo looks just like one from my Flickr account: http://www.flickr.com/photos/doctor_keats/196085008/

    January 9th, 2014 at 3:20 pm