Holden is to shut down its carmaking operation in Australia in 2017 and thereafter become a vehicle importer, the company has announced.
The decision ends speculation about Holden’s future after the Australian Federal Government said it would no longer use taxpayer dollars to subsidise the automotive industry across the Tasman.
GM Holden has received around NZ$166 million in government subsidies each year for the past 12 years. It has admitted it loses money on every vehicle it builds in Australia.
Dan Akerson, the chairman and CEO of Holden parent General Motors, said the manufacturing division in Australia had been under a “perfect storm of negative influences, including 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.”
More than 3000 Holden workers will lose their jobs over the next four years, including around 1600 at the carmaking plant in Adelaide and 1400 in Melbourne. Workers in crucial component supply industries will also be affected.
The only part of Holden’s business to remain past 2017 will be the Melbourne design studio, the company said.
Holden managing director Mike Devereux said: “This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia.
“We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people,” he said.
Devereux said the sale and service of Holden vehicles, warranty terms and spare parts availability will remain unchanged throughout Australia and New Zealand.
“GM remains committed to the automotive industry in Australia and New Zealand. We recognise the need for change and understand the (federal) 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.
Holden’s withdrawal from Australia in 2017 as a carmaker will end one year short of what would have been its 70th anniversary. It rolled out its first Australian-built car in 1948.
Ford announced last May that it would no longer build cars in Australia from 2016. Toyota’s plant near Melbourne, which builds the Camry model range, will almost certainly close too.
Where Holdens for Australia and New Zealand will come from after 2017 hasn’t been made clear. But look no further than the free trade agreement Australia signed with South Korea last week.