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The Holden brand will be retired by 2021 in Australia and local design and engineering departments 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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Latest Holden Closure News
20/2
As we wind down the live chat, we'll leave you with the notion that the luxury car tax is now more redundant than ever. This explainer piece reveals all.
We'll continue to scour our archives for the best Holden content to add to the top of the site, and we welcome your input as well./TIm Robson
19/2
6.00PM One of Adelaide's biggest Holden dealers, City Holden, was three months away from opening a $5.6m showroom, according to the company's Facebook page. Groundwork pics taken in November (below) show a new dealership under construction for the 41-year-old dealership group, which is a stand-alone franchise.
"It has been an incredibly tough few days for us with the recent announcement that General Motors will be retiring the Holden brand in Australia and New Zealand," said Julian Newton the owner and dealer principal of City Holden, in a statement.
"City Holden opened its doors in 1979, and for the past 41 years have been a proud supporter of this iconic Aussie brand.
"We will continue to support all our customers and are committed to ensuring that your vehicle will be looked after in every possible way."
5.20PM Reports coming in of people phoning Holden dealers asking for $12,000 Astras, when a second-hand car is still worth $16,000. Our read is that while there will be discounts to be had, the biggest deductions will come from MY17-plated weirdly-painted high-km demonstrators that have sat on dealer lots for far too long. If you have scored a bargain, though, let us know in the comments!
4.00PM Data is beginning to emerge around what the closure will mean for Holden, after two days of silence from Fishermens Bend. Our dealer sources are suggesting that while there are substantial discounts potentially on the table for the remaining stocks of Holden cars, reports of $1k savings may be wide of the mark.
11.00AM News has emerged that GM's Rayong plant - where the Holden Colorado and Trailblazer were made for Australia - will be sold to Chinese company Great Wall. The plant churned out some 60,000 cars a year - well under the widely accepted industry break-even point of 250,000 cars a year.
9.30AM So what now for Ford Australia, now that its archest enemy has bitten the dust? As we've reported previously, Ford is precariously exposed to market forces in similar ways to its former adversary, but its parent company will continue to sink money into the Australian operation.
We've also added a story to the front page about the pitfalls of buying a discontinued car.
Watch Dan Gardner talk about the closure on ABC TV here.
18/2 - the day after
6.00PM Speculation has emerged that transport magnate Lindsay Fox may finally be able to buy a property he's had his eye on since 2013 - the Lang Lang proving ground currently owned by Holden. Fox already owns the Phillip Island circuit. The property was estimated to be worth $20 million seven years ago.
4.30PM Street Machine had this planned for weeks, apparently - a big reveal of the All Fords Day. :)
2.30PM And in a case of perfect timing, a private seller is auctioning off a prime piece of Brock memorabilia.
10.30AM The team at Wheels have dived a little deeper into the hard numbers around the General's demise.
7.00AM Well... we can all catch our breath a little as we start to process and analyse the news from the last 36 hours. Our teams have rallied to produce a steady stream of amazing content, as well as more than 50 radio interviews and half a dozen TV appearances between them.
17/2 - The day Holden announced that GM was shutting Australian and Thai operations down
6.50PM - As the day draws to a close, many Holden customers are likely asking 'what about me?' We've broken down some of the most pertinent questions in terms of what the Holden announcement means to customers to answer the 'whys' and 'hows' of this new Holdenless Australia. We also answer the question for those thinking about buying a discontinued Holden - whether there's value in it and if it's a good move or not.
5.50PM - 'Goodbye, mate,' says Ford Australia as it farewells its old rival. The statement from the Blue Oval includes a thanks to the Lion for "keeping [Ford] on its toes and inspiring [Ford] to keep aiming higher."
It finishes with, "we will miss you.”
5.35PM - The question of what happens to Holden's warranties and servicing has come up a few times today, but Holden answered it with its initial press release. Here's the summary. Holden will:
- Honour all existing warranties and guarantees
- Honour all free scheduled servicing offers
- Provide ongoing call centre support
- Provide servicing and spare parts for at least 10 years, through national aftersales networks in Australia and New Zealand
- Deal with recalls or safety-related issues if they arise
5.00PM - This is going to be an expensive move for GM. It's been announced that as the global company makes itself less global, GM will spend $1.6 billion withdrawing Holden from Australia. GM is also withdrawing Chevrolet from Thailand, while Holden says it's a high priority to provide support for the employees who will be out of a job.
4.40PM - All is quiet on the frontlines. We've attempted to contact several Holden dealerships across the country and have heard the phrase ‘no comment’ or variations thereof many, many times.
Those dealerships which didn’t supply ‘no comment’ had no senior staff available to talk, as many were in meetings. We imagine there are plenty of Holden employees feeling hurt by the news today, and were hoping to bring their views on the issue to you.
Unfortunately, the closest we were able to get was a quick chat with one sales member who said everyone was ‘in a state of shock’ in the showroom he works at.
4.04PM - Federal minister for industry accuses Holden of 'walking away from Australia' as GM withdrawal comes as shock news to Aus government.
3.02PM - Where art thou Corvette? The withdrawal of GM from all RHD markets makes the C8 Corvette coming to Australia complex, but we boil down what we know.
2.45PM - What does the closure of Holden mean for the Colorado and Trailblazer? We unpack the harsh reality for two of Holden's best-selling models.
2.26PM - GM has sold Rayong plant to Great Wall. The 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 - with no more Holden, the Thai factory has nowhere to send cars. The press conference concludes here.
Aquilina delivers a brutal forecast when asked if there will continue to be a GM presence in Australia post-Holden: “If there is an on-going presence, it will be a minimal one.”
2.18PM - Quizzed by a journalist on what impact the retirement of the Holden brand will have on its motorsport activities in Supercars, Aquilina says that "Holden has made a commitment for the 2020 season, as long as Holden vehicles are in dealers." However, a 2021 future is murky... at best.
Asked to what extent GM will stay within the country, GM International Operations senior vice president Julian Blissett says there's still potential. "We do see a future for GM in these [RHD] markets. It's 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." We suspect "partners" is code for Walkinshaw/HSV, which has been doing good trade converting Chevrolet Camaros and Silverados to RHD since the departure of the Commodore in 2017
As for the local debut of the Chevrolet Corvette: "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," says Holden managing director Kristian Aquilina.
2.13PM - Someone asks how much it'll cost General Motors to pull the shutters down on Holden. Blissett answers, “it’s an expensive undertaking, and an agonising decision for us”, before revealing the total bill to wind down General Motors operations in Australia and Thailand will be “north of a Billion dollars”. That's US dollars.
However, no execs present are at liberty to discuss internal plans and scenario planning RE: dollar value of investment Holden sought from GM. The reality is that the costs ‘were significant’ and ROI wasn’t guaranteed. One can reasonably assume that the $1B cost of an outright shutdown was deemed the cheaper option.
2.10PM - Holden dealers have “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.”
Meanwhile, “we’re happy to take customer orders until the last Holden in sold.” Bargains could be around the corner for savvy buyers.
The execs confirm that there are 185 dealers in Australia and 31 in NZ. The impact of the shutdown will be deeply felt by all of them, in addition to the hundreds of people directly employed by Holden.
1.54PM, Holden press conference commences
Shutting down Holden was an “agonising decision for us," and one that “will impact all functions except for aftersales.” Holden MD Kristian Aquilina confirmed that aftersales support for customers will continue for next 10 years.
“GM design Australia and GM engineering in Australia will be re-consolidated overseas,” and work at Holden's Salmon St HQ and its local design studio will cease at the end of July 2020. The engineering centre at Lang Lang will operate until end of August 2020.
“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.”
READ MORE
- Clay modelling at Holden's design studio (02 Jan 2020)
- Opinion: When was it time to retire the Holden brand? (18 Dec 2019)
- Why did Australia fall out of love with Holden? (12 Dec 2019)
- Two years on from Holden's factory closure (18 Oct 2019)
- Holden halts production of Commodore and Equinox (17 Oct 2018)
- How Holden shaped a nation (25 Sep 2018)
- Opinion: 'Quit Holden on' (11 Apr 2018)
- The best performance Commodores (09 Nov 2017)
- The history of the SS (21 July 2017)
- Holden's factory closure statement (11 Dec 2013)
OFFICIAL HOLDEN AUSTRALIA PRESS RELEASE
The Holden brand will be retired from sales in Australia and New Zealand and local design and engineering operations will wind down by 2021, General Motors (NYSE: GM) announced today. Maven and Holden Financial Services operations will also wind down in Australia.
GM International Operations Senior Vice President Julian Blissett said GM had taken the difficult decision after implementing and considering numerous options to maintain and turn around Holden operations.
“Through its proud 160-year history, Holden has not only made cars, it has been a powerful driver of the industrialization and advancement of Australia and New Zealand,” said Blissett.
“Over recent years, as the industry underwent significant change globally and locally, we implemented a number of alternative strategies to try to sustain and improve the business, together with the local team.”
GM undertook a detailed analysis of the investment required for Holden to be competitive beyond the current generation of products. Factors impacting the business case for further investment included the highly fragmented right-hand-drive markets, the economics to support growing the brand, and delivering an appropriate return on investment.
“After comprehensive assessment, we regret that we could not prioritize the investment required for Holden to be successful for the long term in Australia and New Zealand, over all other considerations we have globally,” said Blissett.
“This decision is based on global priorities and does not reflect the hard work, talent and professionalism of the Holden team.”
GM intends to focus its growth strategy in Australia and New Zealand on the specialty vehicles business and plans to immediately work with its partner on developing these plans.
GM Holden Interim Chairman and Managing Director Kristian Aquilina said that given the significance of Holden through its history, it was critical the company worked with all stakeholders to deliver a dignified and respectful wind-down.
“Holden will always have a special place in the development of our countries. As Australia and New Zealand grew, Holden was a part of the engine room fuelling that development,” said Aquilina.
“Today’s announcement will be felt deeply by the many people who love Holdens, drive Holdens and feel connected to our company which has been with us for 160 years and is almost ubiquitous in our lives.
“Unfortunately, all the hard work and talent of the Holden family, the support of our parent company GM and the passion of our loyal supporters have not been enough to overcome our challenges.
“We understand the impact of this decision on our people, our customers, our dealers and our partners – and will work closely with all stakeholders to deliver a dignified and respectful transition.”
Holden customers can be assured that the company will honour all warranties and servicing offers made at time of sale. Holden will provide servicing and spare parts for at least 10 years, through national aftersales networks in Australia and New Zealand. As required, Holden and its aftersales network will also continue to handle any recalls or safety-related issues if they arise, working with the appropriate governmental agencies.
Impacted Holden employees will be provided separation packages and employment transition support.
Holden will work with its dealer network on appropriate transition arrangements, including offering dealers the opportunity to continue as authorized service outlets to support Holden customers.
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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