GM Holden future secure – Reuss
June 2, 2009 by David Twomey
In a significant move GM Holden, the Australian subsidiary of General Motors, has been quick to assure that the dramatic moves in the United States will not have a direct impact on Australian workers or the Australian car industry.
The Chairman and Managing Director of GM Holden, Mark Reuss, told a news conference this morning that the US moves would have no effect on Australian design, engineering and manufacturing operations, and that no local jobs would be lost.
Mr Reuss said Holden will continue normal operations in Australia and New Zealand and did not expect changes to its business after General Motors announced it has taken court action in the US to launch a competitive New GM.
The fact that Gm Holden has a taxpayer-funded deal in place to build a new small car, based on the Delta 2 platform used for the recently launched Korean-built Cruze, is believed to have played a big part in ensuring that Holden was saved.
“Operations at Holden are unchanged in Australia and New Zealand and we expect it to remain that way,” Mr Reuss, said today.
“GM has clearly stated that all of its businesses in the Asia Pacific region – and that includes Holden – continue normal operations and are not directly impacted by this process in the US.
“No operations outside the US are included in the court filing or court supervised process.
there had been speculation that Holden, like other GM corporate entities such as Saab, Hummer and even the GM Europe operation, would be sold off.
“Holden is a subsidiary of GM but we are a corporate entity in our own right – an independent company under Australian law,” Mr Reuss said.
“Beyond that, GM has indicated that Holden will be an important part of the New GM and we intend to maintain our focus on Holden product programs and activities.
“That means technology improvements to our best selling Commodore range, launching the all-new Holden Cruze this month, and the introduction of our locally-built fuel efficient, four-cylinder small car next year.
“We continue to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network.”
However, the loss of a $1 billion deal to supply Commodores to the US, as the Pontiac G8, when GM decided to axe that brand in the US, has lead to production being cut in half at Elizabeth and workers being put on reduced rosters.
Hammering home the message that it’s business as usual in Australia, Mr Reuss said; “We don’t anticipate this decision will have any direct impact on Holden’s workforce, dealers, or suppliers.
“Holden customer warranties are not affected and we continue to deliver the sales and service experience that our customers expect.
“We wouldn’t normally issue statements to highlight nothing has changed, but we appreciate that customers will naturally ask questions about this sort of announcement from the US.”
Mr Reuss said Holden would remain informed of developments in the US, a process that had been determined to reinvent General Motors.
“The process being used in the US is unlike Australian and New Zealand law. It is a fast, court supervised process that permits the sale of selected assets to a new entity,” Mr Reuss said.
“Unlike court-controlled processes in many other countries, US chapter 11 allows GM to deal with the financial issues that have built up over many years and for New GM to emerge as a healthier business, better able to deal with the challenges of today and tomorrow.
“It does not mean ceasing to trade.”
He said that pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM, with two distinct advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before.
GM has previously indicated it is negotiating with prospective buyers for the Saab and Hummer brands. GM is working closely with dealers, including those in Australia and New Zealand, to continue delivering vehicles and maintaining after sales and servicing requirements.
Asked if GM Holden would move to remove these brands from sale in Australia Mr Reuss said that to the contrary it would support the brands until they were sold and then would seek to work with the new owners to continue to provide support for them in the future.
GM Group Vice President and President of GM Asia Pacific, Nick Reilly, said: “We believe this step – which was taken with the support of the US Government – is the most efficient and effective means for New GM to emerge with substantially less debt and lower operating costs, and with our operations positioned for long-term success.”
Mr Reuss admitted that GM Holden, through its ownership of the GM Daewoo operation in Korea had an exposure to about 50 per cent of the debt accrued by that operation.
He declined to specify exactly how much that debt was.
Mr Reuss also said that from December, when the New GM came into being GM Holden would effectively be ‘fenced off” and would operate by itself.
He said this would mean that the company would receive operating capital from GM but would need to generate a positive cash flow, which he said the company was doing.
Mr Reus said the recently launched Holden Cruze, which is imported from Korea, and a similar but different Cruze model, which will be built in Australia from late next year, were significant steps in the future of Holden in Australia.
He also signalled a change in the model development of the company’s long-running large car, the Commodore, saying that the company would be doing business in a different way in the future, with ongoing development of the model replacing major model revisions.
“Next month’s Commodore will be the new Commodore and the month after’s Commodore will then be the new Commodore,” Mr Reuss said.
Print it: 
If you believe that you’ll believe anything.
Perhaps Caradvice could speak to Reuss for their next podcast.
Sadly BJ, watch the Australian media and public gobble that all up as gospel. In a way, they are saying that the Commodore is dying, and that its going on life support. It’ll get some development to keep it ticking along, but in a few years if Ford keep developing the Falcon, the Commodore will be so far behind not even Holden fanatics could excuse it. Large platform based changes can’t be made incrementally, as they are saying they will do, which’ll leave future upgrades at the minor, BA to BF level of development.
I find this dribble so hard to swallow, how can a company that hasn`t made a profit since 2004 and has losses to the tune of 300 million not be effected by this.
Ill be interested to see how all this negativity has affected sales last month.
I think its a bit of pre-mature ejaculation to say Holden wont be affected because all the hard facts arent in yet. There will be some more dirty news in the coming days\weeks so how can Holden say anything with any certainty at this early stage of banruptcy hearings?
Thet reality is that Holden will suffer …………
Anyone who believe’s that load of PR Spin needs serious help.
Holwoo’s getting what they’ve had coming for some time now. As soon as the Fleet buyers wake up and smell the coffee and realise there’s far less risk in buying a Ford, Holwoo are gone for all money.
“Holden means a great deal for Australia” YEAH RIGHT !!
Charles,
You are assuming that GMH didn’t make a profit in 2008 (not yet released) and that they aren’t currently operating profitably. Didn’t you understand the statement “positive cash flow”?
Buck,
Agreed, much more security with the Blue Oval brand.
DesignEngr, positive cash flow != profitability. Think about it, in 2007, Holdens best year, with the export program at its peak, didn’t make a profit. What makes you think that in 2008, with the export program dying and the beginnings of the GFC crushing car sales, that Holden would make a profit?
And lets forget for a minute that GM-Daewoo, which as pointed out shares half its debt with Holden, is already asking for state aid to stave off bankruptcy itself. Holden getting cutoff from GM isn’t a lifeline, its an ultimatum. Make it on your own or go bankrupt, the new GM will not save them.
“Beyond that, GM has indicated that Holden will be an important part of the New GM and we intend to maintain our focus on Holden product programs and activities.”
Really? When :-/
Give holden another 6 months and beyond and you will see if they will be the next victim.
I also believe, unfortunately that this spells the long, slow, and painful death of what has been Australia\’s and still will be Australia\’s favourite car . . .
The Blue Oval may be the better long term bet – but not because of the Falcon – in spite of it. 4 litre petrol engines are just not going to be of any importance in large cars within a year or two. LPG perhaps – diesel certainly – hybrid you can bank on. If the Falcon is to continue Ford will have to get the Ford-Peugeot co-production 2.7 litre diesel into the Falcon platform ASAP – and into the Territory even quicker than that.
Onepoppa,
Falcon will have a much needed LPG system update next year and territory will get diesel power also next year.
Check this out.
Rav-4 fuel usage, yes including the 4cyl versions, CRV, X-trail and many others and then look at FG’s 6speed auto fuel consumption.
I’m tired of the perceptions not matching reality.
Also diesel power is not the blessing many think, diesel engines are more costly to buy and run, not to mention servicing.
Onepoppa
The 4.0L Falcon six was always offered in two capacities in the past (up to early 90’s) in the form of 4.1/3.3 and 3.9/3.2 It will be downsized again in the future.
DesignEngr,
No I understand the statement “positive cash flow” but I find it hard to believe they have made a profit in 2008 when considering they hadn`t since 2004 and have losses of 300 million, so your of belief that they have turned all that around in one year, doubt it.
Why do you assume there is more security in Ford? Ford are up to their ears in debt. GM is basically an american government owned company now.
Charles,
Prove they haven’t? Do you know the inner working of the auto industry?
Tom,
Ford isn’t bankrupt for start!
Ford should have just taken 15 billion of the US goverments money and declared bankruptcy, appears to be easier than going it alone and fixing your company.
Just proves Ford is by far the better managed company.
“not directly impacted by this process in the US.” ……………..So he’s virtually saying that, Holden won’t get be fully impacted by the bankruptcy of General Motors in the US, but there will be some to a certain extent.
“Mr Reuss also said that from December, when the New GM came into being GM Holden would effectively be ‘fenced off” and would operate by itself.
He said this would mean that the company would receive operating capital from GM but would need to generate a positive cash flow, which he said the company was doing.”
…………………..So because of the bankruptcy of General Motors, Holden will operate differently now because of changes? Does that mean n ot as much control by General Motors? Or?
“Next month’s Commodore will be the new Commodore and the month after’s Commodore will then be the new Commodore,” Mr Reuss said…………………I’m guesing that, the Commodore’s going smaller??? Like Kingswood to VB Commodore?
I guess this isn’t really bad news for Holden then…..well not much.
Heheheh, anti-spam word…Pontiac.
Yes, that means General Motors will be surving on taxpayers money, for a while…….I guess?
In some respects i can’t see how GM can be directly compared to any other auto company currently, as it is goverment owned and funded.
Duck, that means that while VE may become VF, as it’s prob already done, VF will be the end of the road for any major upgrade, it’ll be minor tweaks here and there but no new models for Commodore.
Falcon probably isn’t much different, as the next generation may well be a “global” Ford.
Probably half of what he said is believable.
For the time being this wont affect holdens manufacturing, but mid to long term there will be changes.
He has also chosen his words very carefully
1 June 2009 HOLDEN OPERATIONS UNCHANGED BY PARENT COMPANY ANNOUNCEMENTS IN US
Holden to be part of New GM
Holden not included in US filing under chapter 11;
No direct impact on local design, engineering and manufacturing operations;
Technology improvements to best-selling Commodore, introduction of second carline remain on track;
No changes to Holden employees and supplier payment arrangements; and
No changes to Holden dealer and warranty arrangements.
Holden will continue normal operations in Australia and New Zealand and does not expect changes to its business after General Motors announced it has taken court action in the US to launch a competitive New GM.
“Operations at Holden are unchanged in Australia and New Zealand and we expect it to remain that way,” Holden Chairman and Managing Director, Mark Reuss, said today.
“GM has clearly stated that all of its businesses in the Asia Pacific region – and that includes Holden – continue normal operations and are not directly impacted by this process in the US.
“No operations outside the US are included in the court filing or court supervised process.
“Holden is a subsidiary of GM but we are a corporate entity in our own right – an independent company under Australian law.
“Beyond that, GM has indicated that Holden will be an important part of the New GM.
“We intend to maintain our focus on Holden product programs and activities.
“That means technology improvements to our best selling Commodore range, launching the all-new Holden Cruze this month, and the introduction of our locally-built fuel efficient, four cylinder small car next year.
“We continue to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network.
“We don’t anticipate this decision will have any direct impact on Holden’s workforce, dealers, or suppliers.
“Holden customer warranties are not affected and we continue to deliver the sales and service experience that our customers expect.
“We wouldn’t normally issue statements to highlight nothing has changed, but we appreciate that customers will naturally ask questions about this sort of announcement from the US.”
Mr Reuss said Holden would remain informed of developments in the US, a process which had been determined to reinvent General Motors.
“The process being used in the US is unlike Australian and New Zealand law. It is a fast, court supervised process that permits the sale of selected assets to a new entity,” Mr Reuss said.
“Unlike court-controlled processes in many other countries, US chapter 11 allows GM to deal with the financial issues that have built up over many years and for New GM to emerge as a healthier business, better able to deal with the challenges of today and tomorrow.
“It does not mean ceasing to trade.”
Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM, with two distinct advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before.
GM has previously indicated it is negotiating with prospective buyers for the Saab and Hummer brands. GM is working closely with dealers, including those in Australia and New Zealand, to continue delivering vehicles and maintaining aftersales and servicing requirements.
GM Group Vice President and President of GM Asia Pacific, Nick Reilly, said: “We believe this step – which was taken with the support of the US Government – is the most efficient and effective means for New GM to emerge with substantially less debt and lower operating costs, and with our operations positioned for long-term success.”
Holden customers with queries about this announcement can contact the Holden Customer Assistance Centre on 1800 033 349.
KEY FACTS – Holden
Holden employees more than 6000 people in Australia and New Zealand.
Holden spends $500 million annually on employee wages.
Last financial year Holden spent $420 million on research and development – more than any other private company in Australia.
The Holden Commodore has been Australia’s best-selling car since 1996.
Holden has produced more than 7 million vehicles since 1948.
KEY FACTS – GM
What GM Corporation’s US filing is:
An accelerated, court-supervised sale of GM’s strongest operations and brands to New GM, which is intended to be completed within about 60-90 days.
The most efficient and effective means to achieve the substantially lower debt and operating costs necessary to align the operation for future success.
Unlike court-controlled processes in many other countries, the US process being used by GM will allow it to continue trading and enable New GM to emerge as a leaner company with a stronger balance sheet.
What this US filing of GM Corporation is not:
This is not liquidation or a discontinuation of operations by General Motors.
This is not a proceeding similar to insolvency proceedings in Australia.
This does not mean New GM is going out of business or intends to pull out of Asia Pacific or any other region.
GM Holden Chairman and Managing Director Mark Reuss will address media tomorrow, Tuesday 2 June at 9.00am
Source: GM Holden Media Release
Wow, a Holden media release, that settles everything. I love how Holden forgot the “Holden hasn’t been profitable since 2004 despite years of booming car sales” in their key facts.
I don’t want Holden to go under, but at the same time I want people to see through this PR speak and see the cold hard facts and figures surrounding Holden. It is not a healthy company, and its survival is beyond GM’s control now. Given the number of Holdens I see rebadged as Chevrolet’s (I saw a Barina today rebadged), would it really be the end of the world if tomorrow you woke up and saw the Chevrolet Barina and Chevvy Captiva, like the rest of the world? Is the Holden name really worth that much? And given how cheap the Commodore is nowdays, does being Australia’s highest selling car mean that much? Not to the health of the company, thats for sure.
Adam aka Mada – Yes diesel donks do cost more to buy commonly $2-3000 but the servicing cost are way less with services at 36000Km’s as opposed to what 12K with a petrol.
The extra cost of diesel motoring is genrally revoved in about 60K Km.
Guess this means you’ll no be getting the decent Opel based cars anymore, not that anyone bought them anyway. How do the Global platforms fit into the scheme of the things said he thinking about the Insignia pan. It’s been developed in Europe for Euro cars (at the mo) guess in the split Opel will retain the rights.
“Next month’s Commodore will be the new Commodore and the month after’s Commodore will then be the new Commodore,” Mr Reuss said.” (whilst kidding himself)
Hi, with regard to this statement made in the above media release; “No operations outside the US are included in the court filing or court supervised process.”
A court document filed Monday with the United States Bankruptcy Court Southern District of New York, made available through TTAC’s resident court reporter, Justin Berkowitz, names the following Chinese companies as part of the General Motors bankruptcy: Pan Asia Technical Automotive Center Company, SAIC GM Wuling Automobile Ltd., Shanghai General Motors Corporation, Shanghai GM, Shanghai GM (Shenyeng) Norsom Motors Co. Ltd., Shanghai GM Dongyue Motors Co. Ltd., and Shanghai GM Dongyue Powertrain. That’s ONLY a partial list of GM’s international operations named in the filing.”
Clearly this statement; “No operations outside the US are included in the court filing or court supervised process.”
is a flagrant LIE.
Holden has not been named, GM Europe is already gone, so forget about them, THE SPIN CONTINUES…
If you bought a Holden (any model) in the last eighteen months then guess what? You just got at least two thousand wiped off your already fast depreciator over night. The Car industry is the confidence industry to an extent. General motors is now government motors. No confidence in them now. This is ‘churnalism’ at it’s worst. Where is the editorial?
If Holden was a friend of yours in real life you’d say get lost. ‘You have lied to me one time too many and your passive aggressive nature worries me’.
Holden make crap cars but they sure now how to spin crap through the media !!!! How can they say they are not affected? they already halved production of the Commode and lost exports …………who knows what will happen in a few months when the U.S. gov find out how bad GM really are…….
Only the most optimistic in bred red necked army coat wearing Bathurst attending GM Holden fan would believe a press release from GM Holden at the moment.
^^ And they ALL will.
Millatime Says:
June 3rd, 2009 at 3:32 pm, Only the most optimistic in bred red necked army coat wearing Bathurst attending GM Holden fan would believe a press release from GM Holden at the moment. never a truer word said
All these wishful thinking anti Australia industry idiot who stereotype Holden drivers and want to ustralia who want to see Holden go are a disgrace. I wonder how many of those making comments are actually 5th or 6th or even 3rd generation Australians who actually care about anything Australian. You are a disgrace to the average pure bred Aussie if you are showing predujice and badge snobbery.
Holden will survive this and you know why>? Sales. Yes sales have gone down but so have sales everywhere in all types of industries especially the car industry. If anything Ford Australia will cease to exist in Australia because there market share is dropping and they are behind the 8 ball by having the lowest market share of the 3 Local companies.
Also to those who are saying its the end because Holden are doing gradual changes to the Commodore instead of the series 2 updates etc, well if that was the case all the European and Japanese companies are in the same boat because they have all been doing this for years with model year upgrades.
Elfin Says:
June 4th, 2009 at 9:09 am
“All these wishful thinking anti Australia industry idiot who stereotype Holden drivers and want to ustralia who want to see Holden go are a disgrace. I wonder how many of those making comments are actually 5th or 6th or even 3rd generation Australians who actually care about anything Australian. You are a disgrace to the average pure bred Aussie if you are showing predujice and badge snobbery.”
The “average pure bred Aussie” stopped buying Holden years ago bud, and they’re also now wondering why their taxes are supporting a company who hasn’t made a profit in five years.
People like you are a disgrace to the overall business community and hard working Aussies who don’t get free lunches from the government. What do you do? Live off government welfare too?
BTW – a few weeks ago I witnessed what could only be described as incredibly stupid, a hoon in a green VX Commie Ute drive down Murray Street in Perth in the opposite direction (Murray Street is one way). There’s a reason why there’s a negative perception of bombadores mate. And the “average pure bred Aussie” doesn’t want a bar of it.
Elfin,
Ford’s market share is INCREASING not dropping, and they are often the highest seller of locally made vehicles, swapping with Holden. Toyota sell very few locally made cars relative to the market.
Realist,
The average Aussie buys near new Falcodores in droves. It’s that ex-lease turnover that drives the entire industry.
It is a shame that american greed and stupidity can affect our home grown hero .Lets hope holden survives for the sake of australia….and if they dont survive what the hell is ford going to race against at the mountian?
JT, Holden, whilst having it’s roots in Australia, the car manufacturing entity that you know as Holden has always been owned by GM in America.
JT: IS-F’s :o
just close the whole thing down…..and lets ask the Italians nicely if we can assemble fiats and lancias for them. this way, the Australian consumer gets access to a great line of affordable cars that are far superior to the best ‘australian holdens’ and the regular meat and potatoes monkey gets to keep his process job…..
Yeah I can see a Fiat Punto going head to head with an 600hp FG at Bathurst this year,hahaha.
Ben, why would we want arguably some of the most unreliable cars ever made?
The thing is, close it down and nothing takes it’s place. Mitsubishi anyone?
Where do u get some of the most unreliable cars from?
Think u may have had a flashback to the 70s/80s when the contempary Jap cars were shit as well in other respects.
Meat and potato monkeys?
Gee Benny u sound like a pretentious prick!
Funny how people here bag Fiats etc but have never owned one nor fail to realise that the world doesn’t care for their rubbish Holden’s except for countries that don’t make cars or make cars of lesser quality.
When you have only known average your life you don’t know what your missing, its only when a person who owns a Holden steps into a European car then they start to say “ohh why hasn’t mine….”
Bathurst…Pffft…Fiat owns Ferrari and Maserati…
Realcars, was talking Italian not japanese. Fiats and Lancias do have the worst reputation for reliability of all of the Euros.
BATHURST!!!!!!!!!!!!!!!!!!!! Holden v Ford….no wonder australia is 20yrs behind europe in everything!???????…holden is a great australian icon….i think i’ll buy australian by purchasing ‘australian made’ barina……..