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    The Other Shoe Drops: Holden Ceases Manufacturing In 2017



    William Maley

    Staff Writer - CheersandGears.com

    December 10, 2013

    The rumors were flying around only a week ago, but it has been confirmed now. This afternoon in Australia, Holden announced that after sixty-five years of production, the automaker will stop producing vehicles and "transition to a national sales company in Australia and New Zealand" by 2017. The move will affect 2,900 workers at the Elizabeth manufacturing plant and Victoria. It will also affect a number of suppliers in Australia.

    “We are completely dedicated to strengthening our global operations while meeting the needs of our customers. The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world,” said GM Chairman and CEO Dan Akerson in a statement.

    “GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government’s point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers,” said Holden Chairman and Managing Director Mike Devereux.

    Holden says they hope to have "significant presence in Australia beyond 2017" with a national sales company, parts distribution, and a global design studio.

    Acting Prime Minister Warren Truss told members of the Australian Parliament during question period that he had spoken with Devereux and found out the decision had been made in Detroit.

    "Now this government had indicated right from the very beginning that we wanted Holden to remain manufacturing cars in Australia. "We've wanted, we want to have a strong and active motor vehicle manufacturing industry in Australia," said Truss.

    Workers were told the news at the end of their shift. Many were angry and honked and screamed as they left for the day.

    "Ive been waiting for a package anyway," said Rob Williams, a worker to Drive.com.au.

    Holden follows in the footsteps of Ford who announced earlier in the year that would be shutting down their operations in Australia by 2016.

    Source: Drive.com.au, News.com.au, General Motors

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.comor you can follow him on twitter at @realmudmonster.

    Press Release is on Page 2


    GM to Transition to a National Sales Company in Australia and New Zealand

    • Company to cease manufacturing in Australia by 2017

    DETROIT – As part of its ongoing actions to decisively address the performance of its global operations, General Motors today announced it would transition to a national sales company in Australia and New Zealand. The company also said it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.

    “We are completely dedicated to strengthening our global operations while meeting the needs of our customers,” said GM Chairman and CEO Dan Akerson. “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”

    As a result of the company’s actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.

    Holden will continue to have a significant presence in Australia beyond 2017, comprising a national sales company, a national parts distribution centre and a global design studio.

    GM Holden Chairman and Managing Director Mike Devereux said an important priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.

    “This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” said Devereux. “We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.”

    The sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged.

    “GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government’s point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers,” Devereux said.

    Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar’s peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.

    With the decision to discontinue vehicle and engine manufacturing in Australia by the end of 2017, GM expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013. The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs. Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees’ union. The asset impairment charges will be considered special for EBIT-adjusted reporting purposes.

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    Sorry guys, two of you made comments but they got wiped out due to a software configuration issue I had to fix in the Holden category. Feel free to re-post them.

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    Sad. But other than the Commodore and it's variations, Holden today is just peddling the same generic FWD appliances that GM is peddling elsewhere. The Commodore and it's variations are their only unique models.

    Edited by Cubical-aka-Moltar
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    The real genius behind Holden's cars is the variation and creativity they were able to generate from one single platform. That is something the rest of GM never learned how to do very well at all.

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    Camino, I think it is not as bleak as you see. Manufacturing jobs may go, but I think Mark Reuss is too smart to let the design studio go hayside.

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    A shame perhaps, but considering how high the value AU dollar has gotten, its cost prohibitive, and it makes more sense financially. Plus, Alpha is more sophisticated and flexible than Zeta. Its not like RWD is dead, its just going Alpha.

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    • By William Maley
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      "I think it is looking at what are the global applications because in certain vehicles, like Camaro, there would be markets outside Australia and New Zealand, and understanding looking through it a lens of; does this make business sense? Does this make customer sense? Is it the right thing to do from a competitive perspective? So it's really a mix of variables that we take into account," said Lowell Paddock, head of product planning for General Motors International.
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    • By William Maley
      We have known for a couple of years that Holden will end Australian production in 2017. Today, Holden announced that October 20th, 2017 will be the final day of production at their Elizabeth plant. This will end over 60 years of production at the plant.
      “While this confirmation isn’t a surprise for anyone and we’ve been working toward this for nearly four years, we can now confirm the actual date for our people and our suppliers. Putting our people first and foremost has always been our highest priority,” said Richard Phillips, Holden's Executive Director of Manufacturing in a statement.
      Before that date arrives, Holden plans on building 30,000 Commodores, Utes and Caprices at the plant. These will include some rumored high-performance models of the Commodore. Workers at the plant and suppliers were notified of the date the day before.
      “This October may bring to a close more than 60 years of vehicle manufacturing by Holden at Elizabeth but I know it will be business as usual for our manufacturing workforce until then – we have tens of thousands of world-class cars to build in coming months and I know we all want to see Holden have great success in Australia for many years to come," said Philips.
      This leaves Toyota as the only automaker who hasn't announced when it will end production in Australia. A spokesman told CarAdvice that a date would be announced before the end of the first quarter. Ford already ended Australian production last October.
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      Press Release is on Page 2


      HOLDEN CONFIRMS OCTOBER 20 FOR END OF PRODUCTION AND FINAL TRANSITION TO VEHICLE IMPORTER; PROVIDES CERTAINTY TO EMPLOYEES AND SUPPLY CHAIN NETWORK
      Holden manufacturing continues until October 20, 2017. More than 30,000 vehicles to be built before manufacturing ends. Nearly 70% of Holden’s Elizabeth employees have secured jobs within 12 months of leaving. Holden to retain more than 300 designers and engineers in addition to 10,000 employees at Melbourne headquarters, Proving ground, Design Studio and across 230-strong national Holden dealer network. Holden today has confirmed it will continue manufacturing in Australia until October 20, 2017, when the final car will be built at its Elizabeth plant and Holden becomes a national sales company and vehicle importer for the long-term in Australia.

      Today Holden’s manufacturing workforce in Adelaide were the first to be told the company will fulfill its 2013 commitment to manufacture vehicles at its Elizabeth plant until the final quarter of 2017.

      Holden Executive Director of Manufacturing, Richard Phillips, said that Holden’s overriding priority is giving employees and suppliers advance notice and providing certainty.

      “While this confirmation isn’t a surprise for anyone and we’ve been working toward this for nearly four years, we can now confirm the actual date for our people and our suppliers. Putting our people first and foremost has always been our highest priority,” Mr Phillips said.

      “This October may bring to a close more than 60 years of vehicle manufacturing by Holden at Elizabeth but I know it will be business as usual for our manufacturing workforce until then – we have tens of thousands of world-class cars to build in coming months and I know we all want to see Holden have great success in Australia for many years to come.

      “Every day our employees exhibit professionalism and passion for achieving quality. We are categorically building the best cars Holden has ever built and that is backed up by internal and external data. They simply are a fantastic team that will ensure our last locally-made car is also our best car ever.”

      Holden has assembled vehicles for domestic and export markets at the Elizabeth plant since 1963 and will continue to manufacture the world-class Holden Commodore range there until October 20, with nearly 1000 employees remaining at the Elizabeth plant in production, engineering and support roles until production ends. There are no plans for any further workforce reductions ahead of October 20.
      Of the nearly 700 people who have left Holden’s Elizabeth plant since 2015, 80 per cent have successfully transitioned within 12 months of leaving (69 per cent employed, 5 per cent in training, 3 per cent have retired and 3 per cent are volunteering).
      Holden’s Transition Support program will continue to prepare job seekers for new careers and support those opting for retirement until well after the factory closes.

      During 2016, the Elizabeth plant was recognised with two awards for safety and financial performance within General Motors International.

      All Holden employees leaving the business have access to a suite of transition services and up to $3000 in approved training and $500 for financial advice - all part of Holden’s $15 million contribution to the federal government-led Growth Fund for specific support of automotive manufacturing employees.

      Holden’s Transition Centre was opened at its Elizabeth plant in 2014 to provide a range of support services including information sessions, workshops, career counselling, employment expos, resume writing, interview skills preparation and more.

      Holden Chairman and Managing Director, Mark Bernhard, said Holden’s manufacturing workforce had set new benchmarks for quality and performance in the past four years.

      “They have continually pushed to improve the quality of their work for the benefit of our customers – this commitment, continuous improvement attitude and passion have been exhibited in spades in challenging circumstances,” Mr Bernhard said.

      “It’s not surprising that their skills, work ethic and flexibility are highly sought after and they are leaving a legacy for Holden that deserves to be honoured by ensuring this company has a bright and successful future.

      “Holden continues to change but we are proud to retain a significant presence in Australia for the long-term that includes more than 300 people across our local design and engineering workforces, in addition to the approximately 700 corporate staff and 10,000 people employed across our dealer network. Holden remains committed to Australia and our customers for many, many years to come”.
      Holden Transition Support
      Holden acknowledges the impact the end of local manufacturing has on our people and their families, across the country and throughout the industry. We are doing everything in our power to allow our people to make considered choices and help them move onto their next opportunity. Every Holden worker leaving the business has access to a suite of transition services and up to $3000 in approved training; all part of Holden’s $15 million contribution to the federal government’s Growth Fund for specific support of our manufacturing and engineering employees. The Transition Centre established at Holden’s Elizabeth plant is open to employees, contractors and supplier employees. As a result of Holden’s world-class transition services, about 80 per cent of people who have left the business have gone on to find other work. This does not include those who chose to retire or made personal decisions not to seek work. Holden has proactively engaged with HR and business leaders in South Australia and interstate, who have toured the Elizabeth site and viewed the variety of skills and capabilities of our workforce. Employees who have secured another job have been able to access an early voluntary separation package, helping them to take up opportunities. Holden’s Transition Centre at Elizabeth opened in 2014, after significant research into global best practice and consultation with employees and partner organisations.
      Support and services for employees includes:
      Up to $3000 training funds Career counselling Financial advice and superannuation support Coaching sessions to develop individual tailored plans Information on career pathways, training providers and courses Industry information sessions Careers and training expos Computer training Jobs vacancy board Dedicated staff to help answer questions Resume and job application writing workshops Interview training Networking training Job search training Department of Human Services (representatives and self-service kiosks) Resume writing workshops NewAccess program (BeyondBlue/BeyondAuto)
      Future of Holden:
      Holden will launch 24 major vehicles and 36 new drivetrain combinations by the end of 2020 Holden vehicles will continue to be tuned and tested for Australian conditions and customers with the retention of the famous Lang Lang Proving Ground in Victoria, along with advanced engineering capabilities Holden’s Global Design centre continues to be based in Port Melbourne, contributing to local and global product programs Holden will retain more than 300 designers and engineers beyond 2017 This is in addition to approximately 700 corporate staff and 10,000 people employed across the 230-strong Holden dealer network More than one-third of Holden’s future product portfolio will be sourced from Europe; with vehicles also being sourced from North America and Asia The esteemed Commodore nameplate will live on from 2018 with Holden’s next-generation large car Home Ground Advantage, Holden’s $5 million, 10-year commitment to grassroots sporting clubs has been a huge success with more than 5000 entries since launch Holden has launched the biggest Capped Price Servicing Program in the country, covering every Holden ever built.
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