Holden to stop making cars by 2017

[Lima]

AUSmotive.com » Holden to cease local production in 2017 (http://ausm.tv/gmh)

A sad day. I know there's enough old timers, even with VW in their veins, who will be saddened by today's news.

[tigger73]

Be interested to know where the govt of the day thinks all the people in that industry are going to find jobs.

Sad day for SA and Vic manufacturing.

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[Transporter]

Be interested to know where the govt of the day thinks all the people in that industry are going to find jobs.

Sad day for SA and Vic manufacturing.

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Oh, everybody will be a teacher so we have all the unemployed highly educated with at least double degrees surfing at the beach, since the government already sold out almost everything that we manufactured here, including utilities. :?

[Sharkie]

Well, I have been toying with the idea of buying a SS-V Redline Ute for a few years now as a 2 seater toy (OK just to be able to hear that V8 roar :) ). May now have to do that sooner rather than later before I can't get 1 anymore ....

I believe it is a mistake to kill off such a fundamental manufacturing industry, however labour costs (and the unions) are making it impossible to continue to do and make a profit. Unless we as taxpayers fund a loss making industry for another purpose, there is just no business sense in keeping it going.

And Miro, its not the government's fault, its all down to the high cost of doing business due to unacceptably high labour costs compared to the rest of the world.

[wai]

Oh, everybody will be a teacher so we have all the unemployed highly educated with at least double degrees surfing at the beach, since the government already sold out almost everything that we manufactured here, including utilities. :?

Yep, we will have the highest qualified unemployment queues in the world, per capita or otherwise.

[wai]

I believe it is a mistake to kill off such a fundamental manufacturing industry, however labour costs (and the unions) are making it impossible to continue to do and make a profit. Unless we as taxpayers fund a loss making industry for another purpose, there is just no business sense in keeping it going.

Not entirely. It has more to do with the fact that we are not buying the large cars that Ford and Holden are making. The cars from Ford and Holden that we do make are already allocated to other manufacturing plants, and there is simply not the economic muscle that Australia can exert.

Unions and the deals do have some impact, but if people bought the cars they used to, there would not be a problem. There is NO level playing field out there. We took away our protection, but there is plenty of protection where we would like to sell the Commodores and Falcons.

Well, now here's an opportunity for Toyota to get a foot in. As Holden and Ford are no longer manufacturing in Australia, maybe we need to get on board with Toyota and make sure they do not go the same way.

[Sharkie]

Not entirely. It has more to do with the fact that we are not buying the large cars that Ford and Holden are making. The cars from Ford and Holden that we do make are already allocated to other manufacturing plants, and there is simply not the economic muscle that Australia can exert.

Unions and the deals do have some impact, but if people bought the cars they used to, there would not be a problem. There is NO level playing field out there. We took away our protection, but there is plenty of protection where we would like to sell the Commodores and Falcons.

Well, now here's an opportunity for Toyota to get a foot in. As Holden and Ford are no longer manufacturing in Australia, maybe we need to get on board with Toyota and make sure they do not go the same way.

Actually, no .... Toyota in Australia only makes cars in the same segment as the Commodore and Falcon which is a segment correctly pointed out as a segment in decline ...

Holden already previously identified this issue and to combat this segment problem started building the Cruze locally which is the segment of the moment it appears. It is actually quite a good car and deserves to do well. Ford attempted the same a while ago and tried to get approval to build the Focus locally. Both manufacturers intended to shift to building the right cars for the current market.

Ford's proposal got killed off due to the high cost of building the Focus locally compared to elsewhere and Holden has stated that they can build the Cruze $3750 per car cheaper elsewhere.

Its a no brainer really from a business perspective and I expect Toyota who only builds in the "wrong" segment locally to be gone soon too. They are already making such noises .....

[Buzy_Robot]

Has me reflecting on why I made the move away from my old VT Commodore to Mazda then Volkswagen. The simplicity of the old VT had its charm, but after 8 years of ownership, I no longer needed a large car - let alone the VE which was even bigger! Holden has struggled to offer a medium size car, hence my move to imported vehicles. To be sure, if I was in the market for a large car now, I wouldn't hesitate and go for a VF Commodore. Sorry Toyota, the Camry can't compete with the Mazda6 or Volkswagen Passat in terms of driving enjoyment. Indeed, I doubt Toyota will stay much longer either. It'll certainly be interesting to see what the flow on effect will be on the imports - will they charge more? Be less willing to negotiate on pricing?

[Transporter]

And Miro, its not the government's fault, its all down to the high cost of doing business due to unacceptably high labour costs compared to the rest of the world.

Well, don't forget the farmers, the land that is sold to the overseas, the houses that the foreigners are buying and than rent back. The politicians are there to make the laws that protect our interests, not to go against us.

[BenM]

It is certainly a sad day but really the writing has been on the wall for years. I don't blame the government (of either flavour) for this. Holden failed to produce cars that the people wanted; unions drove the cost of production up (and hold the company to ransom in the way they are allowed to operate their labour force) and those two factors make them uncompetitive in the global market.




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[Idle]

Maybe now's the time to really bite the bullet.

Let's get rid of at least one level of government, take the labour force generated by all the closures and do something useful with it.

Use it to grow food that the world market desperately needs (instead of selling our farms overseas) and to convert the raw materials we're letting overseas companies take away for next to nothing into products.

It could be done!

[wai]

Maybe they need to see what other manufacturer would like to move their operations to Australia? After all, there is the support industry here, and there are the people with skills to do the work.

[BenM]

Maybe they need to see what other manufacturer would like to move their operations to Australia? After all, there is the support industry here, and there are the people with skills to do the work.

So long as it's not any VAG brands. Like them just how they are, thanks. If they were built here they'd be significantly more expensive and fall apart twice as fast :D

In all seriousness though, the only problem with your idea is that any manufacturer would want massive govt subsidies to come here, we're then still stuck with another company that can't survive on its own without taxpayers propping it up.

[Lima]

Subsidies on their own aren't the issue. The wider benefits they bring to the economy are worth the spend and as noted plenty of other sectors get government benefits too, what is it $4bn in diesel concessions to the mining industry, a crap load more than car makers are asking for.

The point will always be that sufficient domestic and/or export demand must exist for any model to be viable, regardless of brand etc. While wages, high AUD etc all play a factor in the costs involved, including the sale price, people have to actually want to buy the car in enough numbers to make it feasible.

[Tom87]

Be interested to know where the govt of the day thinks all the people in that industry are going to find jobs.

Sad day for SA and Vic manufacturing.

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They're putting on a happy, smiling face infront of the cameras because they know that the majority of them are unskilled assembly line workers who will not get another job which pays them anywhere NEAR what they're accustomed to and won't accept a job with a normal salary because they'll see the pay as beneath them. Luckily it is only a very small number of them who will be eligible for immediate government assistance. Majority of them will be able to live for quite some time without a job on their $300k pay outs.


If Holden does leave, workers will receive the most generous redundancy benefits around. Holden says leaving will cost $600m. Most of this will go to staff payouts. The fellow interviewed agrees with my calculation: the average production-line worker will walk away with a redundancy package of between $300k-500k.


Not entirely. It has more to do with the fact that we are not buying the large cars that Ford and Holden are making. The cars from Ford and Holden that we do make are already allocated to other manufacturing plants, and there is simply not the economic muscle that Australia can exert.

Unions and the deals do have some impact, but if people bought the cars they used to, there would not be a problem. There is NO level playing field out there. We took away our protection, but there is plenty of protection where we would like to sell the Commodores and Falcons.

Well, now here's an opportunity for Toyota to get a foot in. As Holden and Ford are no longer manufacturing in Australia, maybe we need to get on board with Toyota and make sure they do not go the same way.
Sir, Holden's death is almost entirely to be blamed on the staff.


In 1991, the pre-enterprise bargaining award wage of a Holden entry level process worker was $462.80 a week. In 1992, Holden began enterprise bargaining and now a worker at that same classification level has a base rate of $1194.50 a week, a 158 per cent increase, or a compound increase of 4.4 per cent year on year for 22 years. Right now, base wage rates for process workers in the Holden enterprise agreement are in the $60,000 to $80,000 per year range and in recent times, "hardship payments" of $3750 were given to each worker.

The modern award for such workers mandates base rates in the $37,000 to $42,000 range. This means that before we add any of the shift penalties, loadings, 26 allowances and the added cost of productivity restrictions, Holden begins each working day paying its workforce almost double what it should. After you add in the other employment costs, I estimate Holden's workforce costs it somewhere close to triple the amount it should.

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Nowhere in the world is this acceptable. Unfortunately for many great Australian companies we do not have the same forgiving financial system as seen in the USA which has allowed many giant corporations nullify their outdated and impossible to service staff agreements.

[Finance_Analyst]

the houses that the foreigners are buying and than rent back.

I think you will find the actual proportion of these foreigners are quite small in absolute numbers, given that they cannot buy a landed property, only new ones (which is a good thing to prop up new housing approvals).

People who complain about foreign investment should remember that without money from China, this whole economy was done for years ago. Plus the fact the there is not enough local capital to swallow investment here locally.

[Sharkie]

Sir, Holden's death is almost entirely to be blamed on the staff.



Cookies must be enabled. | The Australian (http://www.theaustralian.com.au/opinion/columnists/high-wages-stall-holden-engine/story-fnkdypbm-1226779253154#)

Nowhere in the world is this acceptable. Unfortunately for many great Australian companies we do not have the same forgiving financial system as seen in the USA which has allowed many giant corporations nullify their outdated and impossible to service staff agreements.

Exactly, this and nothing else (not even any government past or present) is the sole reason Holden is stopping production in Australia.

Common sense says, if you price yourself out of the market, do not be surprised if the market passes you by. Trouble is common sense is not very common these days.

[Tom87]

Exactly, this and nothing else (not even any government past or present) is the sole reason Holden is stopping production in Australia.

Common sense says, if you price yourself out of the market, do not be surprised if the market passes you by. Trouble is common sense is not very common these days.

Actually I kind of disagree.

I think this could have been prevented.

If action had been taken 10 yrs ago when the check engine lights were flashing it is possible Ford and Holden would be looking at a healthier future. The issue of course is back then the every day plebs or indeed the population would have taken sides with the employees and unions in wondering why on earth it was required. If anyone can't remember, 10 yrs ago was 2003. it was pre GFC, and money was flying around everywhere. Things were looking pretty peachy.

[Transporter]

I think you will find the actual proportion of these foreigners are quite small in absolute numbers, given that they cannot buy a landed property, only new ones (which is a good thing to prop up new housing approvals).

People who complain about foreign investment should remember that without money from China, this whole economy was done for years ago. Plus the fact the there is not enough local capital to swallow investment here locally.

Is that right?
Just look at the German economy, they don't have the amount of minerals we have, their farming land is non existent compared to ours, they have 4x more people to feed and yet they are second to China when you compare their production on their homeland. :?
Maybe our economists should learn something from them.
Smart people don't sell their own factories and utilities to foreigners, that's the bottom line.

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[Sunny43.5]

I think part of the problem is that for years Holden and Ford have fed a frenzy of rev heads with their constant V8 battles on the road and on the track , meanwhile the rest of the world has moved on from gas guzzling oversized dinosaurs . So they can only blame themselves for fuelling the V8 and big car crowd with their tired old line that Aussies like big cars , the autobahns in Europe are crowded with small to medium size cars running diesel turbo engines and they run all day at high speeds on the smell of an oily rag . The US on the other hand is littered with big cars as their fuel is cheap as so are their cars . I think there are many other reasons we all will trot out for this demise of the local car industry , but one story told to me by a motoring insider twenty plus years ago was that we pay twice as much for our cars to keep 20.000 workers in a job .

[hoi polloi]

Sad day indeed...

Can't help thinking Toyota will follow soon enough... As others have said we just aren't buying large cars as we used to - I owned a Commodore in the early 90's (primitive but reliable enough once the bugs were sorted) then went to a Corolla (liked to destroy alternators and blow tail lights), then an Astra (nice car but 60,000km cam belt changes were a drain) before my Golf... Most of the time it's just me in the Golf so can't justify a Commodore - if I was in the market for that size car though... As for the Cruze - we have a few at work and a couple have had to have their automatic transmissions replaced under warranty... Funnily enough these are Korean made ones before production came to Australia (not that it makes much of a difference)... My work is in Zetland (next to Suttons City Holden) and the number of Cruzes that I see get towed in is a bit alarming...

As for the subsidies the car industry gets - many industries get subsidies in one form or another... Whether it's housing/real estate (negative gearing), private health insurance (premium rebate), private education (Govt subsidies) or primary producers (diesel fuel rebate)... It seems there are just some sacred cows that can't be touched is all...

Regards,
Anthony.

[wai]

The likes of Ford, GM and Toyota do not manufacture the cars we are now buying. The problem is that the local operations cannot simply change this as the cars we want have been allocated to other facilities around the globe.

So their demise in Australia was completely in their hands. If GM wanted to keep the local facility operating, they could have easily allocated a tiny fraction of global manufacturing for the cars we want to Australia. They chose not to. They would rather close the local operation. Their decision completely.

[ian]

GMH has treated Australia like a milking cow , Gillard announced she had done a deal with holden to stay till 2022 at considerable costs to the tax payer , There is a $500 carbon cost on every car made in Australia but none on imported vehicles . , Car manufacturing in Australia pay on average over $70,000 per assemble line worker twice as much as the USA worker gets , through the greed of the unions and the dysfunctional Labor party . It has now forced the hand of GMH, they are not just closing up shop in Australia ,as they are now building 4 large factories in china where the hourly rate is about $7 per hour, We will only have Toyota left by 2017 and they just might be next .

[ParaBul]

I think it's a shame, because I think Holden have turned the Commodore into quite a nice car. Unfortunately, like a vast majority of Australians, it's simply not a car that I want to buy.

I believe there are two co-conspirators who need to share the blame for Holden's demise.

Primarily, I believe it is the unions who have made Australian manufacturing too expensive to be competitive - their members were doing very well while it lasted, but how well will they do when it's all over? Outstanding Performance in the Lack of Vision category...

GM is the other major culprit. Their US-centric management doesn't understand what the non-US world wants. The Australian market isn't large enough to support a large rear drive family car, but BMW and Mercedes seem to do OK globally - why can't GM? Because they expect the rest of the world to buy what America buys from them, and haven't yet figured out that even Americans are turning away from Detroit and embracing foreign cars. I believe Holden have developed a platform (Commodore) that could be globally competitive - if GM had the vision - but because they don't expect it to sell well in the US, they don't expect it to sell well anywhere else. To be fair, the cost of manufacturing here doesn't help (see above), but it's still a performance worthy of Honourable Mention in the Lack of Vision category.

While I'm whingeing, what have they done with the Cruze? The Mazda 3 / Toyota Corolla category is what Australians want, but Holden couldn't make the Cruze compete - not even with a "Buy Australian" advantage. When I bought my Golf, I didn't particularly want a Golf - I wanted a Golf sized diesel (that wasn't a Ford...)

My list came down to Golf, Mazda 3, Hyundai i30, and Cruze:


i30 was competent, but completely uninspiring, and sold (by the sales staff) as cheap. They couldn't understand why I was asking about options that would increase the price, much less tell me about them :facepalm: - but I digress.
The Mazda 3 was in runout, and there were only two left in the country - not in Adelaide, and I would have to sign for one without a test drive. :facepalm:
Holden said they couldn't supply a diesel Cruze for 6 months - not even to drive. They couldn't get engines. :facepalm:
Volkswagen had more choice, a range of vehicles to test drive, and offered me a cancelled order at a discount that I couldn't go past. :banana:


One of the few times an Australian-built car was on my list, and they crossed themselves off.

I'm disappointed that Holden is going, but I think it was inevitable.