November 03, 2011

Horse 1243 - Holden - As Australian as Baseball, Hot Dogs, Apple Pie and Chevrolet

"Senior management have confirmed it is highly likely that the 2014 Commodore will be the last one engineered in Australia,"
- Chris Walton to 702 ABC Sydney, The Association of Professional Engineers, Scientists and Managers - 3rd Nov 2011

"All I can tell you is that Holden is, for example the Commodore, 100 per cent designed, engineered, manufactured in Australia today, and the next Commodore, 100 per cent designed, engineered, manufactured in Australia, for many, many, many, many more years,"
- Mike Devereux to 774 ABC Melbourne, CEO of General Motors Holden - 3rd Nov 2011

The old adage that "there is no smoke without a fire" I think is particularly useful in this instance. Quite obviously Holden CEO Mike Devereux has the company's reputation and image to uphold and acts with the interests of the company in mind, but Chris Walton's comments are either sparked by a leak from management or perhaps at very worst spite.
The point is that if the Commodore was to be either engineered or built entirely overseas, then I'm hardly suprised by the news, as back in Horse 1217 in August, I already hinted at what the replacement for the Commodore will be.

The truth is that whilst Holden tries to palm itself off as "Australia's" own car company, its track record since 1947 has proven otherwise.

The original 48/215 (FX) was planned in 1938 to be a Chevrolet but scrapped on the basis that it was too small for the American market. Laurence Hartnett then then CEO of Holden pleaded with GM in Detroit for a locally designed car but was overridden and the prototypes were built in 1946 in Detroit.
The Torana was a facelifted Vauxhall Viva, the iconic Kingswood was a continuation of a series of cars which had been engineered in the US, the VB Commodore was basically the Opel Rekord/Senator but with the 3.3L in-line six cylinder engine carried over from the Kingswood and Torana, the VN Commodore was the Opel Omega A married to a 3.8L Buick V6 made in Bonneville and the VT was the Opel Omega B with the same 3.8L V6.
It wasn't until the VE Commodore introduced in 2006 that Holden was forced to develop an entirely new car, because there was simply no big rear wheel drive donor car to modify.

Given the history of Holden, Detroit probably sees Holden as a bit of an antiquated relic, a leftover of past lore. Truth be told that Holden itself has never built any more than 3 lines of passenger cars in Australia simlutaneously and given that the Commodore reached peak sales more than 10 years ago, it will be business decisions which finally kill the car off. Holden already realise that Australians are buying smaller cars and have started producing the Cruze in Australia. That more or less proves that even they're moving with the times.
As it is, the V8 Supercars have already future proofed the motor racing series in he expectation that neither the Falcon or the Commodore will exist beyond about 2015.

Just to undercut Mike Devereux's claims, photographs of the Malibu undergoing testing have already been taken in Victoria. No doubt that the Malibu has/was/is seeing intensive testing at Holden's proving grounds at Lang Lang in Victoria. Given that we already know that the Malibu will take the 3.6L engine already in the Commodore and already does take the 2.5L engine found in the unloved Epica, Holden would kill two birds with one stone.

If Holden was to kill off the Commodore and replace it with a 2-and-a-bit litre Chevrolet, then it's almost like going full circle. Laurence Hartnett had to plead with Chevrolet to even get an Australian produced GM car but that was more than 60 years ago. GM Holden is after all a business and exists to make a profit. If that means selling overseas engineered and built cars like they do with the rest of their line up then so be it.

Holden's most famous jingle was imported from the United States, so it's not like even that was engineered in Australia either.

Holden have released an official statement about model development in Australia:
The issues being raised in the media relate to confidential discussions with the engineering union, APESMA, as part of the enterprise bargaining agreement (EBA) negotiations which are currently under way.

Of course Holden wouldn't discuss private negotiations between the firm and its employees. It still doesn't change the fact that they currently import most cars from overseas and employ far cheaper labour rates than in Australia.
The Spark, Barina, Cruze and Epica are all Daewoos which come from Korea and the Colorado is an Isuzu which comes from Thailand.

However, Holden does not comment on its EBA negotiations in the media, nor do we speculate about very long-term future models and we certainly don't intend to give our global competitors a free kick.

This is a bit of stupidity on the part of Holden considering that every single car in the company's history bar the VE was based on existing developments. Any sensible onlooker doesn't even need to look at Holden's press releases to work out what possible cars come to Australia. All one needs to do is look at the noises and press releases coming from Detroit and various motor shows and prototypes which come out to give you a fairly accurate picture.

Basically Holden have come out with an official press release because they're more or less required to do so. The truth is that the whole Australian operation could be shut down tomorrow provided someone was to do a Discounted Cash Flow analysis and Projected Budgets and they found an unfavourable result. It's a private company and as such, they'll open or close plants according to how it affects the bottom line. That's the reason why there's no assembly plant in Pagewood any more.

1 comment:

aaron said...

The "big Aussie six" is a myth.
In September, 3551 Commodores, 3290 Mazda3s, 3123 Cruzes were sold. The Falcon doesn't even fit in the top ten anymore. By 2014, the Cruze will be Holden's volume seller.

The Commodore is only being propped up by fleet sales. Families buy SUVs and smaller cars.