GM to axe Holden brand in Australia and New Zealand
Detroit car manufacturer, General Motors (GM), continues to embark on its year-long global restructuring efforts to focus on high-performing markets such as China and North America. The company announced last Sunday that it would be ceasing its engineering, design and sales operations in Australia and New Zealand. More specifically, GM also revealed its plans to exit Thailand and removing Chevrolet before 2020 ends.
As a result of these changes, the firm anticipates bearing $1.1 billion in charges primarily in the first quarter including $300 million in cash. The market exits are evident of GM’s intention to pull back from underperforming markets in recent years. More notably, this includes selling its European operations to French carmaker PSA Group three years ago. Furthermore, the firm also restructured its operations in South Korea.
The announcement emerges more than two years after GM’s decision to shut down its Holden plant located in Adelaide’s northern suburbs. Thereafter, in late 2019, the company announced that it would stop selling its most iconic car, the Commodore. Yet, the global automotive giant has just delivered its final blow to Australians as it announced that the household brand would be shutting down by 2021. Holden enthusiasts have shared memories of their favourite models ranging from the Torana, and Monaro through to the Commodore. The iconic Aussie brand was also synonymous with Bondi Beach and Vegemite.
The decision was not well-received by Prime Minister Scott Morrison who asserted that GM swallowed a huge portion of government money only to let the brand deteriorate and witness the loss of 600 jobs. More notably, Industry Minister Karen Andrews has labelled the move to be unacceptable as the announcement was made without prior consultation.
Meanwhile, GM has promised to provide reasonable redundancy packages for its employees, most of which will leave by the end of June. However, one-third of its workforce will remain in after-sales roles. Compensation packages will also be offered to GM’s 31 dealers in New Zealand and 185 dealers in Australia as they close or transit to other brands.
The firm has attributed its decision to the significant global and national changes they continue to face despite ongoing efforts to improve the business. Yet, these efforts have proven futile. GM International Operations Senior Vice-President Julian Blissett further commented that following vigorous assessment, the team failed to prioritise capital expenditure required for the brand to retain its success and presence with Australia and New Zealand.
Holden revealed that it currently has thousands of vehicles available for purchase across the country or in the making and would continue to operate until the last vehicle was sold. Additionally, current dealers will also be offered the opportunity to continue operating as authorised service centres for its customers with approximately 1.6 million Holdens on the road. GM will also honour all warranties granted, provide after-sales service and spare parts for all Holden vehicles for at least ten years.
By Caroline Wong
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