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A much-publicised potential deal between General Motors and the Belgian entrepreneur who wants to save GM Holden’s South Australian car plant from closure in 2017 will not go ahead.

General Motors today announced that both itself and Punch International Corporation, headed by entrepreneur Guido Dumarey, had concluded that a potential deal to keep producing vehicles at Elizabeth beyond 2017 was “not possible in this case”.

“General Motors and Punch Corporation have undertaken and completed a detailed global evaluation of a proposal from Punch Corporation to continue manufacturing vehicles at Holden’s Elizabeth plant in South Australia,” a GM International spokesman said.

“Both parties concluded that a viable business model was not possible for this case. Therefore the proposal will not be taken forward.

Cruze Elizabeth

“GM and Punch have communicated on this decision.”

As we have reported, Punch Corp discussed with GM the possibility of taking over Elizabeth and commencing full vehicle production. The prospective vehicles would be based on the locally developed rear-drive Zeta architecture that underpins the Commodore, but re-worked and offered on a global scale.

Dumarey’s Punch Corp. had form, having revived a GM site in Strasbourg slated for closure. The site now very productively makes transmissions for German giant ZF. Additionally, Punch already supplies six-speed automatic transmissions for the Commodore.

The plan — much publicised by lobbying from Dumarey, who’d pledged to invest $150 million — attracted the support of Industry minister Christopher Pyne, high profile independent SA senator Nick Xenophon and opposition industry spokesman Kim Carr.

Holden Manufacturing Elizabeth SA - 1

“As discussions have been governed by a Non-Disclosure Agreement, neither party involved is able to discuss details of the proposal, nor the assessment,” GM went on to say today.

“The challenges to domestic automotive manufacturing in Australia – lack of scale, high production costs, supply base contraction and increasing market fragmentation – persist and cannot be overcome for this business case.

“In particular, the wind-down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable.

“GM thanks Punch Corporation for their proposal. GM will continue to consider Punch Corporation, along with other interested parties, to participate in the sale process of the Elizabeth plant and assets after GM ceases local manufacturing.


“Punch Corporation will continue to pursue other business opportunities in the Australian automotive sector.”

The timing of this news coincides with today’s earlier announcement that Australian production of the Holden Cruze would wind up earlier than expected, at the end of 2016, with as many as 400 jobs to go.

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