GM, Holden Ending Australian Manufacturing by 2017

SS-Chevy-australian-production

Due to concerns such as high costs and the highly-valued Australian dollar, General Motors confirmed earlier rumors this morning that it will close its manufacturing operations in Australia by 2017. Although the Holden brand will continue to exist in the form of rebadged imports, all vehicle and engine production will stop, signaling the end of Australian-made models like the Holden Commodore and Caprice.

“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 CEO Dan Akerson in a prepared statement.

The Australian new-car market totals 65 different car manufacturers vying for about 1.1 million in annual vehicle sales. The strong Australian dollar makes imports from places like South Korea more affordable options for buyers, leading to sliding local sales over the last few years.

Following in the footsteps of Ford, which announced last May that it would halt manufacturing in Australia by 2016, GM could no longer keep its Holden plants running due to hundreds of million in losses and insurmountable obstacles that could not be rectified even after billions of dollars in aid from the Australian government.

"No matter which way we apply the numbers, our long term business case to make and assemble cars in this country is simply not viable," reflected Holden chairman Mike Devereux, speaking to reporters at GM’s Adelaide facility.

GM’s inability to profitably continue Australian manufacturing could have far-reaching effects well beyond the loss of 2900 jobs over the next four years. A new Reuters report speculates that the entire Australian industry could be thrown into turmoil if Toyota, which runs the last remaining domestic manufacturing operation, follows suit. Tensions are high, with more than 40,000 employees of parts and supply companies anxious that their jobs might be in jeopardy.

The decision will also have a palpable effect on the U.S. automotive market.

GM spokesperson Greg Martin confirmed that the U.S.-spec rear-wheel-drive Chevrolet SS will continue production in Australia until the Holden plants shut down in 2017, but stressed that it’s still only December of 2013 and that eventuality is still a few years down the line. He would not comment on the model’s future – if any – after that point.

After jumping through a host of various import and emissions hoops just to be viable for U.S. sale, it seems sadly ill-fated that the Chevrolet SS is already doomed before it even finished its first year stateside. We can’t help but see shades of the Australian-made, rear-wheel-drive Pontiac G8, which bit the dust after just two model years once the Pontiac brand was discontinued in 2010. Depending on when exactly GM shutters Holden manufacturing plants, the SS might see only four model years of production.

This decision may also impact GM’s fleet-oriented lineup in North America around the same time. The Chevrolet Caprice PPV is currently manufactured in Australia and will presumably follow the SS to the grave, although GM would not comment on the Caprice's future. While GM also offers police fleets the aging Chevrolet Impala Limited, that model will be discontinued in 2016. Should both models be discontinued, the Chevrolet Tahoe PPV may be the only police-oriented model remaining in GM’s portfolio.

DERRECK
I hope GM changes their mind

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