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Exclusive: General Motors knew at least four months ago it was axing Holden

EXCLUSIVE: US car giant General Motors knew at least four months ago that it planned to shut Holden.


However, industry insiders believe the management decision to leave Australia was made some time in the first half of 2019 but was kept a closely guarded secret in Detroit.

Drive understands even the most senior Holden executives in Australia were kept in the dark and not told of General Motors’ plan until less than a fortnight ago.

Confidential sources have told Drive that General Motors began to negotiate the sale of the Thailand factory – its last car assembly line in the Asia-Pacific region and the source of Holden’s biggest selling model, the Colorado ute – to China’s Great Wall Motors approximately four months ago.

“Deals like that don’t happen overnight,” said the well-placed source, speaking to Drive on condition of anonymity. “Talks of the sale began at least four months ago, so you can comfortably deduce from that, GM knew at least at that time the days were numbered for Holden. They were getting rid of the Thailand factory that was supposed to be Holden’s lifeline. What else can you make of that? Of course they knew.”

 

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General Motors insists the final decision to close Holden was only made “recently” and in the wake of record low sales, with little chance of a recovery. 

When local manufacturing ended in October 2017, General Motors said it had every intention of turning the company around, as evidenced by the investment in factory-made right-hand-drive versions of the Equinox and Acadia SUVs.

Detroit also funded a $15.9 million refurbishment of Holden’s emissions laboratory and test track in Lang Lang, south-east of Melbourne. Those upgrades – designed to bring the Holden facility up to world standards so it could to continue to take on Detroit’s overflow engineering work – were completed in late 2018. 

However, while Holden represented 20 per cent of all new cars sold in Australia in 2002 – its last year as Number One – it had slipped to 4 per cent by the end of 2019, the lowest market share since it was established as a car brand in 1948.

Industry insiders are adamant the writing was on the wall for Holden from the first half of 2019, even before it began to hit new record lows.

According to confidential Holden sources, the impressive line-up of future models that lured former Toyota Australia boss Dave Buttner (pictured below) out of retirement in August 2018 – after being flown to Detroit to view the designs – were quietly taken off the table some time in the first half of 2019.

 

 

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Senior managers inside Holden who were responsible for the rollout of future model programs over the next three to five years left the business by the middle of 2019 and were not replaced.

This timeline shows that General Motors was still investing in Holden in the second half of 2018 but then plans changed some time in the first half of 2019.

Mr Buttner stepped down from the company in November 2019 citing personal reasons, after just 16 months in the role. His departure came soon after General Motors is understood to have started the process of selling the Thailand factory that built Holden’s biggest selling model, the Colorado ute.

Earlier in his tenure at Holden, Mr Buttner told Australian media that he had advised dealers to focus on returning their businesses to profitability and postpone expensive showroom upgrades that had been requested by previous management. Some dealers heeded the warnings, others did not.

 

 

Drive

It may have been too late for General Motors to warn some dealers against expensive renovations to their facilities, such as City Holden in Adelaide, which is about to open a $6.5 million showroom in May 2020 after it scheduled reconstruction work in July 2018.

However, a number of dealers across the country had invested in new signage and commenced minor renovations within the period of time it appears General Motors was preparing to exit the Australian market.

“General Motors has had a lot of practice exiting unprofitable markets in the last few years, so this is not new to them, but this is unprecedented in Australia, to shut down a network the size of Holden,” the industry insider said.

It is now apparent the timing of the negotiations with Chinese car maker Great Wall Motors will provide a clearer picture of when General Motors had given up on Holden, Australia and the rest of the Asia-Pacific region.

General Motors and Great Wall Motors have not disclosed how much the factory in Rayong, Thailand (pictured below) was sold for, or how quickly the Chinese manufacturer will start manufacturing its ute models there.

Drive
Joshua Dowling

Joshua Dowling has been a motoring journalist for more than 20 years, spending most of that time working for The Sydney Morning Herald (as motoring editor and one of the early members of the Drive team) and News Corp Australia. He joined CarAdvice / Drive in 2018, and has been a World Car of the Year judge for more than 10 years.

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