Home > Holden decision unavoidable, made only yesterday: Devereux

Holden decision unavoidable, made only yesterday: Devereux

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Holden has blamed its decision to leave Australia in 2017 on a “perfect storm” of conditions facing the manufacturing industry.

As reported earlier today, Holden has announced that parent company General Motors has decided to close Holden’s factories – shedding 2,900 jobs in the process – and import vehicles instead.

Speaking at a press conference at Holden Vehicle Operations at Elizabeth, managing director Mike Devereux said the call was unavoidable.

“We will be working as I said with the federal government in earnest beginning today and with the state and local governments, and, yes, with our union partners, to do what you would expect us to do,” he told Manufacturers’ Monthly.

“And that is to do a professional job over the next three to four years, which is important to remember, in transitioning these great people, these talented engineers, these talented production workers into doing other things in this economy.”

Facing a series of – some fairly sharp – questions relating to when he knew Holden’s position was terminal, Devereux – who accepted a promotion in late-October to join the parent company’s consolidated international operations in Shanghai - insisted that GM had only made its final decision yesterday.

“General Motors made the decision to exit manufacturing in Australia a number of hours after my testimony to the Productivity Commission yesterday and as soon I got as soon as I could after that final decision was made and I came here today to talk to our employees first,” he said.

“It’s no secret that things are difficult in terms of manufacturing in this country. I received a final decision from General Motors yesterday afternoon and as you can imagine my first port of call was to get on a plane and come out here and share the news with our employees before anybody else.”

Holden has made profits averaging roughly $50 million a year, and received levels of government support averaging $153 million annually. It made a loss of $152.8 million in 2012.

Fairfax Media speculated yesterday that Devereux may have made today's announcement before the Productivity Commission hearings yesterday.

Echoing a statement given by outgoing GM CEO Dan Akerson, Devereux cited a “perfect storm” of negative influences in the Australian market, such as the strong dollar, high input costs and difficulties achieving economies of scale in a small, highly fragmented environment.

He said Holden remained popular, was the number two overall brand in Australia, and sold two of the market’s top five passenger cars.

The effects of Holden’s departure are a matter of huge concern for Toyota, the only other car company besides Ford (which will leave in 2016) that continues manufacturing in Australia, as well as for unions, auto suppliers, and governments.

The AWU’s Dave Smith said Holden’s announcement made it “highly likely” Toyota would follow. “In fact it's almost certain," he added.

Toyota conceded that "unprecedented pressure" has been placed on its ability to make cars as well as on its local supplier network.

The Australian Industry Group said that the news represented huge challenges in terms of providing transitional support and of replacing massive capabilities that will be lost with Holden.

“Holden’s decision will directly affect all the companies and people working in the automotive manufacturing sector. Collectively, around 3,000 businesses are directly linked into the automotive supply chain,” said CEO Innes Willox.

“They contributed around $5.5 billion to Australian value added in 2011-12, including $1.9 billion worth of exported cars and $1.6 billion in exported auto components.”


Image: News Corp

 

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