GM delays decision to stop production in Australia, may cease in 2016

Article by Christian A., on December 6, 2013

General Motors Co. will no longer produce vehicles in Australia as early as 2016, according to local media. GM operates in Australia through its Holden unit. The disclosure of the decision was supposed to come this week but it was postponed to early 2014, according to Australian Broadcasting Corp., citing unnamed senior government sources.

Both Industry Minister Ian Macfarlane and shadow minister Kim Carr remarked that they understood no decision had been made. The move would be a major blow to Australia’s auto industry, which has been struggling for years no thanks to high costs, a strong local dollar, weak exports and tough international competition.

The government has spent billions of dollars to support the industry, but the aid has become less certain since Tony Abbott's conservative government grabbed power in September 2013. The Australian auto industry employs over 50,000 people and supports 200,000 other manufacturing jobs. Carr remarked that if one carmaker closes in Australia, “it’s only a matter of time before the whole lot goes." Ford will close two of its auto plants in Australia in October 2016.

In July, GM reaffirmed a plan to position Opel as a more expensive brand in Europe while creating room for Chevrolet as its value offering. The US carmaker plan new vehicle launches at Opel and sister brand Vauxhall with an aim to better its already financial situation in Europe. Success of the Opel and Vauxhall brand should allow GM to create space for Chevrolet to operate in Europe.

GM sees Chevrolet as its global mainstream brand. Along with luxury marque Cadillac, Chevrolet is aimed at penetrating every market around the world. Opel (Europe), Holden (Australia) and Buick (US and China) are intended to be successful regional brands.

Holden’s roots can be traced to J.A. Holden & Co, a saddlery business in Adelaide founded by James Alexander Holden in 1856. His son and business partner Henry James founded Holden's Motor Body Builders Ltd. (HMBB) in 1919 to build car bodies. Starting 1924, HMBB became the exclusive supplier of car bodies for GM in Australia.

In 1926, GM formed General Motors (Australia) and in 1931 bought HMBB and merged it with General Motors (Australia) to form General Motors-Holden's. A GM unit since 1931, Holden has been the carmaker's global center for rear-wheel-drive engineering. In fact, Holden did the engineering work on the Chrvolet Camaro.

As for the auto industry’s situation in Australia, Japan's Mitsubishi Motors Corp. discontinued manufacturing in the country in 2008. In many, Ford Motor Co. said it would shutter its two auto plants in the country in October 2016.

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Topics: gm, australia, production

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