General Motors will not sell the iconic Holden logo to Australia for $1 – or offer it to a Chinese car company that might use the famous badge to rebrand its vehicles.
Holden boss Kristian Aquilina told a Senate Inquiry in Canberra today that General Motors in Detroit will formally decline a request earlier this year by Queensland Senator James McGrath to offer the Holden badge to Australia for $1 to preserve its future.
In his first public appearance since the shutdown announcement in February, Mr Aquilina also indicated there was no intention to sell the Holden logo to a Chinese car company, in the same way British brand MG is now owned by one of China’s largest automotive conglomerates.
Senator McGrath said to Mr Aquilina: “We’ve seen MG, a famous British automobile company, is now owned by a Shanghai-based, state-owned company in China. Can you give us an assurance that General Motors won’t sell off the Holden brand to a state-owned brand in China, or indeed any other company?”
Mr Aquilina replied: “I’m not going to address any hypotheticals, but I want to assure you … Holden remains within … General Motors ownership. We expect to trade with that trademark and that brand for a long period into the future.
“It gives our customers, 1.6 million of them, an assurance that they can come to a (parts and service) location bearing that marque, that they can have their cars looked after appropriately by well-trained technicians and (using) genuine parts.”
Senator McGrath then said: “I wrote to (General Motors CEO Mary Barra) back in May asking for her to sell the Holden brand back to Australia for $1 – not because it’s worthless but because it’s priceless – and I note Ms Barra has not had the courtesy to reply to my correspondence.
“If the CEO of General Motors won’t reply to legislators in the Commonwealth Parliament, how can we be assured that what you say to us today about the long-term future of Holden in Australia is actually assured? Aren’t you taking us for a ride,” asked Senator McGrath.
Mr Aquilina responded: “We did receive your correspondence and only recently … because it did take a while for your letter to reach Detroit, given the circumstances, and we will be replying to you. But the reply will say this: We genuinely value the Holden brand, it has enormous value to the Australian community, the way that we are conducting ourselves with our heritage vehicles … and artefacts … demonstrates how careful we are. We will be giving the assurance to the extent possible that we wish to continue trading with that brand and caring for it as it deserves to be treated.”
Mr Aquilina was asked to estimate the value of the Holden brand but replied: “That’s not something I wish to disclose here in a public setting, it’s not the right place to do that. But it is of significant value. It’s an asset that we cherish within the company (General Motors).”
During Mr Aquilina’s question-and-answer session, which ran for one hour, he also outlined the countdown to the Holden closure.
Mr Aquilina said he was informed by Detroit about the shutdown of the Holden brand on the Friday before the Monday morning announcement on 17 February 2020.
Mr Aquilina said up until late January 2020 there were still a number of proposals put to Detroit to try to save the Holden brand in Australia, but conceded a shutdown was among the options being considered.
He said he informed the chairman of the Australian Holden Dealer Council on the same day, Friday, but both parties were subject to confidentiality agreements until Monday.
The timing of this information is crucial to the Senate Inquiry because, earlier this year, it was alleged General Motors had known for some time Holden was about to be wound down – even as dealers were investing in showroom upgrades or blocked from installing other car brands in Holden facilities.
The Holden boss emphatically denied there was a lengthy secret plan by Detroit to retire the Holden brand, and outlined the significant investments made in new models (such as the Equinox and Acadia SUVs), Australian design and engineering centres, and a new finance division in 2018.
Mr Aquilina said he was not exposed to confidential high-level discussions between Detroit and China’s Great Wall Motors, who earlier this year purchased the Thailand factory that made Holden’s biggest selling model, the Colorado.
Senator Deborah O’Neill asked Mr Aquilina a number of times exactly when Detroit knew it was going to sell the factory that made Holden’s biggest selling model – rather than when a decision was made about the timing of the announcement.
Given that such a complex factory sale process is likely to take months – not days or weeks – Senator O’Neill asked at which point Holden was informed of this decision.
“There is a difference between a decision and an announcement … I want to get to the heart of the decision, so I ask you to be very truthful in what you say here,” Senator O’Neill said to Mr Aquilina.
Mr Aquilina said it was not appropriate for him to comment on timing as he was not part of the factory sale process, but pointed out the Colorado was made in three factories around the world – and it was not beyond the realm of possibility Holden could source the vehicle from another assembly line.
This is despite the fact the Thailand factory specialised in right-hand-drive models – whereas the other factories only made left-hand-drive models.
“I was in Detroit in January and I was participating … in a very broad study on various options associated with Holden’s future (including) what investment it would take to have that brand and the cars necessary to thrive in the Australian market,” said Mr Aquilina.
“But I also needed to consider what the alternatives were, too. My time between December and February until the announcement (was made) was spent working day-and-night on all of the various possibilities.”
Mr Aquilina said he was “working on a whole range of scenarios … not only a wind-down but a future with Holden. I was obviously hopeful that it was a much longer future with the Holden brand, introducing great new product that met the needs (of consumers) and was superior to the competition, well into the future. That would be my Plan A. But I (also) had to consider Plan B, Plan C, Plan D, and Plan E.”
Mr Aquilina said Holden accounted for 1 per cent of global sales for General Motors and market forces – including a sharp decline in sales since the end of local manufacturing in 2017 – as well as the company’s withdrawal from other global right-hand-drive markets, made it difficult for General Motors to justify the investment in future Holden models.
The Holden executive was also repeatedly grilled over the compensation payments to dealers, even though he said more than 90 per cent of dealers have now accepted the offer.
“Everyone at Holden and General Motors … is hurting as a result of the decision to retire the Holden brand, it’s just so sad, Holden have been a family and a livelihood for so many people,” said Mr Aquilina in his opening remarks.
“(General Motors) explored every conceivable option to secure a strong future for Holden but it was not to be.”
Mr Aquilina, who said his grandfather worked for Holden for more than 23 years and that his “family is only here because of Holden”, said the closure of the brand was “deeply personal” for everyone.
Mr Aquilina also responded to claims that Australian taxpayers got a raw deal because Holden closed despite $2 billon in government assistance from 2001 to 2017.
“Yes there were some big numbers involved,” said Mr Acquilina. “All aimed at stimulating and advancing manufacturing and (research and development) in this country, and it worked, with car companies returning that investment many times over.”
For example, he said, “Holden generated 18 times the $2 billion it received in government programs over the last two decades, that’s $36 billion worth of activity, $1.8 billion each year buying Australian-made parts. It’s a return on an investment,” he said.
“But the world and the market evolved. And like every other local manufacturer, Holden transitioned to importing its vehicles until of course General Motors (made) an investment decision that would determine our future.”
The Senate Inquiry is scheduled to deliver its report into Holden on 12 November, 2020.
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