Holden To Cease Au Manufacturing

[Cowboy1600]

Well, it's a sad day, IMO. Holden has announced it will cease manufacturing here in 2017. With Ford already on the way out, Toyota will not be far behind. The industry employs some 45,000 people in AU, most will be out of work, many are older and will struggle to find decent work ever again.

To anyone who thinks this is a good thing because now the government won't keep throwing money at the industry, I implore you to read this article by Tim Colebatch: http://www.theage.com.au/federal-politics/political-opinion/pms-decision-on-cars-means-hard-times-ahead-20131209-2z1kt.html

For those who don't know Tim Colebatch, he is one of the countries most well regarded economists and renown for honest and open discussion on the economy. He's non-partisan and respected by all sides of politics.

For those looking for a solid long term investment, go grab yourself a specced HSV or FPV and park it in a well sealed shed somewhere. Pull it out in 40 years and retire comfortably on what you'll be able to sell it for.

EDIT: that was meant to say 2017

Edited December 11, 2013 by Cowboy1600

[djr81]

A sad day. But the question is this: What would they manufacture if they were to continue? The large car market is declining and there isnt anything that is replacing it in the kind of volumes needed to keep a factory competitive.

[Cowboy1600]

Ford floated the idea of the Focus, but it's simply too expensive to manufacture over here.

IMO what they should have done is up the ante and compete with the likes of BMW and Mercedes. We are actually very good at making cars and if Ford/Holden upped the quality everywhere and targeted the $60k range I reckon they would have grown their market over time. But Ford and Holden competed with budget cars which they can't do as they cost more to make. The Aussie bogan is cashed up these days and they now drive Euros, not because they are relatively better than Ford/Holdens but because they are simply more expensive. If the average Falcadore was sumptuous leather clad with all the electro bells and whistles and commanded $60k to start with, I reckon they would have sold like hotcakes. Look at the G6 series Falcons as an example. You had to queue to get one. They couldn't build them fast enough.

But it's done now and the big engined Aussie RWD will soon be a footnote in the history books.

[BoyWhoCriedWolf]

It is sad but unfortunately due to our population base, small export market and expensive manufacturing costs, high dollar, not moving with the market etc etc, it really wasnt a viable industry nor is it viable for the government to keep throwing money at it.

Very sad for the families, hopefully there will be some real and targeted re-skilling opportunities for those in the industry.

[djr81]

What industry? Manufacturing is stuffed across the board.

THis is short but worth a look.

http://www.abc.net.au/news/2013-12-10/llewellyn-smith-its-the-australian-economy-that-needs-saving/5145940?section=business

[ras1983]

This is the crux of the issue:

"It is not the only reason the car industry is in trouble, but it is the main reason. It is not the only reason Qantas is in trouble, but it is a big reason. Australia's currency has risen more than that of any other developed country. Our economic culture allowed our currency to escalate so high as to make our producers uncompetitive, and neither the government nor the Reserve Bank did anything about it. An anonymous minister tells us the next generation of Holdens will be built in South Korea, and shipped here duty-free under the new free trade agreement. That makes sense: former Holden chief Mike Devereux told us a Commodore could be produced for $3750 less there than here. Korea takes manufacturing seriously.

Their economics is a practical toolkit, not a theology. While our dollar soared 91 per cent, the Koreans let the won edge up just 6 per cent. While Australia's cost base more than doubled between 2002 and 2012, Korea's cost base held its ground. Is it any wonder that by 2012, manufacturing production had almost doubled in Korea, yet was back to 2002 levels in Australia?

Cheap imports cut local manufacturers' market share from 25 per cent in 2005 to 10 per cent. Falling sales mean rising unit costs for suppliers. In hindsight, Ford's decision in May to end manufacturing in 2016, and the Coalition's decision to slash support, were the funeral bells for the industry. Toyota and most component makers will follow.

Read more: http://www.smh.com.au/federal-politics/political-opinion/pms-decision-on-cars-means-hard-times-ahead-20131209-2z1kt.html#ixzz2n8cxIXET"

It's very simple really. Holden and Ford built large cars. The public was increasingly buying small cars and SUVs. It is as simple as that. Small cars and SUVs are more economical to import. Unfortunately the above article neglects to mention the failure of the local car makers to adapt to changing buyer demand, but otherwise the main points are spot on and are representative of the Australian manufacturing industry in general.

It's a sad day for Australia, that's for sure.

[djr81]

They havent "failed to adapt". Ford makes the Territory - a bloody good SUV but one that doesnt sell in big enough numbers to warrant more investment. The looked at assembling the Focus a few years back but the numbers didnt stack up. Holden makes the Cruze. But again, it doesnt sell in big numbers. It is not that the cars are uncompetitive just that the market has fragmented so much that NO CAR sells in big enough numbers to support local design and manufacture.

[R31Nismoid]

It is sad but unfortunately due to our population base, small export market and expensive manufacturing costs, high dollar, not moving with the market etc etc, it really wasnt a viable industry nor is it viable for the government to keep throwing money at it.

Very sad for the families, hopefully there will be some real and targeted re-skilling opportunities for those in the industry.

+1 to the above.

This is the crux of the issue:

"It is not the only reason the car industry is in trouble, but it is the main reason. It is not the only reason Qantas is in trouble, but it is a big reason. Australia's currency has risen more than that of any other developed country. Our economic culture allowed our currency to escalate so high as to make our producers uncompetitive, and neither the government nor the Reserve Bank did anything about it. An anonymous minister tells us the next generation of Holdens will be built in South Korea, and shipped here duty-free under the new free trade agreement. That makes sense: former Holden chief Mike Devereux told us a Commodore could be produced for $3750 less there than here. Korea takes manufacturing seriously.

Their economics is a practical toolkit, not a theology. While our dollar soared 91 per cent, the Koreans let the won edge up just 6 per cent. While Australia's cost base more than doubled between 2002 and 2012, Korea's cost base held its ground. Is it any wonder that by 2012, manufacturing production had almost doubled in Korea, yet was back to 2002 levels in Australia?

Cheap imports cut local manufacturers' market share from 25 per cent in 2005 to 10 per cent. Falling sales mean rising unit costs for suppliers. In hindsight, Ford's decision in May to end manufacturing in 2016, and the Coalition's decision to slash support, were the funeral bells for the industry. Toyota and most component makers will follow.

Read more: http://www.smh.com.au/federal-politics/political-opinion/pms-decision-on-cars-means-hard-times-ahead-20131209-2z1kt.html#ixzz2n8cxIXET"

It's very simple really. Holden and Ford built large cars. The public was increasingly buying small cars and SUVs. It is as simple as that. Small cars and SUVs are more economical to import. Unfortunately the above article neglects to mention the failure of the local car makers to adapt to changing buyer demand, but otherwise the main points are spot on and are representative of the Australian manufacturing industry in general.

It's a sad day for Australia, that's for sure.

Yep that is indeed the crux of it, gotta love the various groups instantly pointing fingers for the instant issue... It's been a LONG time coming, for any side of parliament to say the other is the reason is utterly stupid really.

[Birds]

Globalisation...it's just taken a couple of decades to snowball and hit hard. We can regulate labour here, but we can't regulate it overseas.

Local car industry is just the start of it. It was the first to go because it's the second most expensive purchase most people make; costs are amplified in every part of the manufacturing process. Housing industry isn't so bad because you can't import a house; it's locally labour intensive. Has still taken dents in materials though.

Watch as every other locally manufactured industry collapses one by one, jobs along with it, as we choose cheaper and better value imports over local produce.

Exact same mentality that ravages retail with online sales and imports: short term savings over long term future.

[wht510]

GM dropping a local brand? Hmmm nothing new here..

GM has approximately 14 different brands manufacturing in 36 different countries.

Compare that to the powerhouse which is VW! (aside from the brands they bought)

So how do we as Australians compete with "value adding cost competitive countries" AKA "Low cost regions" that have lower labour rates?

Ship manufacturing off shore! Cop out if you ask me.

Why do we let so many different brands into Australia IN DIRECT COMPETITION to our Australian made stuff? Yes I know the car sizes are large (we still made the cruze though).

Same thing goes with food, clothing, white goods etc. etc.

Electrolux Fridges were Australian made. I bought one and love it. It was approximately $150 more expensive than the equivalent Samsung. Patriotic, yes. Then I find out just recently it's more economical for these fridges to be made over seas in a "value add cost competitive region" where it's actually cheaper to ship boxes of AIR into Australia. Where's the logic in that? Shipping must be hella cheap coupled with the cost of the goods themselves. Just so the company can save that $150 and a few extra dollars and make some extra coin without an Australian manufacturing arm.

We used to make TV's in Australia in the 70's FFS!

Let's hope the free trade agreement with Korea allows our farmers to compete on a level playing field with all the other countries with tax free thresholds, subsidies, and benefits.

Australia, please setup CSIRO, and any other department to assist with new and old technologies so we can remain cost competitive with QUALITY produce.

I came from an American owned company who offshored Australian Manufacturing. I was made redundant mid year because of this. Not a good feeling and it's hard to wake up every day trying to find a job amongst news like this in a job market where there is less and less for particular skills. Might have to re-train and go back to Uni and learn something different...

If you know anyone who works in the automotive industry (or any other industry for that matter) and who is going to lose their job, it's time to help them out. Spread the word to recruit some of these people in the companies you work, buy Australian made where you can, and realise being out of work isn't that nice and different people approach it in different ways. Support your fellow brothers and sisters, and hopefully we can get through this.

[FrangaR33]

In my opinion despite high wages and an uncompetitely high currency a major cause of the end of Australian car manufacturing is Ford USA, GM and the United States government.

Now before i'm accused of having on my tin foil hat on, Ford and Holden both had massive export opportunities for their vehicles in the USA. Not long ago it looked like the XR8 and the XR6 Turbo was going to become the new workhorse of Police and Sheriff departments across the United States, it was big, powerful, rear wheel drive, all the things that are desirable features for cops on the beat.

However politicians in the government werent to happy about this and were worried that if Ford Australia took over a hundred thousand orders (the estimate of potential sales over a number of years) it would cost jobs in Detroit and Ford was lobbied both externally and internally to instead continue the production of the old Crown Vic until a bastardised Tauraus police car could be developed. This one instance cost Ford Australia its future, if the Falcon had of been the only choice for a Ford based police car brand loyalty would of lead most of the departments to purchase Falcons and save not only the Falcon/Territory but also Ford Australia's manufacturing base.

As for GM they never wanted the Pontiac G8 or Chevy SS to succeed, not when they continue to make piece of shit cars like the Impala or the Malibu. While they are reasonable cars, compared with a VF Commodore they are absolutely in the stone age.

Of course most of this took place with the GFC as a backdrop and it was all about American jobs for Americans, while Australia obviously manufactured superior cars it was about the shit they could turn out in the Detriot not making great cars.

Holden you shall be sorely missed.

[djr81]

...it was all about American jobs for Americans, while Australia obviously manufactured superior cars it was about the shit they could turn out in the Detriot ...

This. They are flat out getting their own sht together without worrying about us.

[BakemonoRicer]

Meh, no big loss. Fairly lacklustre batch of cars they make.

They spat the dummy when they got destroyed by Nissan in Group A race series....and don't even use production cars in v8 supercar series.

Race bred technology and expertise in their road vehicles (especially chassis) really is lacking....

[89CAL]

Meh, no big loss. Fairly lacklustre batch of cars they make.

They spat the dummy when they got destroyed by Nissan in Group A race series....and don't even use production cars in v8 supercar series.

Race bred technology and expertise in their road vehicles (especially chassis) really is lacking....

Tell that to all the people that will lose their jobs, the increased unemplyment rate in the country and the economic impact it has. To say 'oh yeah other people make better cars so it doesnt matter' is the stupidest thing I think you could possibly say

Have you even looked at the VE commodore? Holden were targetting mercedes etc with it and I must say (and I wasnt really a fan of the VE) They have done a pretty good job. Maybe its not quite there but they are also a hell of a lot cheaper.

Honestly, grow a brain

[Cowboy1600]

Tell that to all the people that will lose their jobs, the increased unemplyment rate in the country and the economic impact it has. To say 'oh yeah other people make better cars so it doesnt matter' is the stupidest thing I think you could possibly say

Have you even looked at the VE commodore? Holden were targetting mercedes etc with it and I must say (and I wasnt really a fan of the VE) They have done a pretty good job. Maybe its not quite there but they are also a hell of a lot cheaper.

Honestly, grow a brain

Dude, you're arguing with someone who stated a lack of "race bred technology" as a reason he's not sad to see them go....you're wasting your breath.

Both Holden and Ford make/made extremely high quality products packed with features for the price. Problem is they were competing in a jam packed market segment. They should have gone after BMW/Mercedes/Audi years ago.

[PRO_32]

Overseas (developing world)labour costs made this an inevitability we are no different to GM brass making the call to pullout if I can get a product cheaper I usually do.

btw bakemono its a complex issue with mistakes made by the GM board and employees/ narrow minded unions to the detriment of a best case outcome for the involved parties and indirectly related businesses. regardless there are real world consequences for people and families who will be affected negatively to put it lightly. so to be so dissmissive of such hardship is pretty heartless, and lol at the group a reference you need to read up a bit.

[BakemonoRicer]

Yes, it is sad people will be losing their jobs.

But let's face it, manufacturers who have successful racing pedigree are still going fine in light of the downturn....

Build quality of Holdens isn't anything to write home about.. they cant even get the gaps right... and look inside the door jambs of the new base model VF commodore and you will the major issues with paint. When a manufacturer cant even get these simple things right of course they will be in trouble.

I have been in a 440rwhp HSV VE commodore and I wasn't particularly impressed by sitting inside it or its handling dynamics. I just didn't get 'that feeling'.The instant response of the v8 was cool though..

As for the Mercedes comparison, the only Mercedes I have been in is an E63 AMG... and obviously this blows the HSV out of the water in terms of everything.

[Birds]

A few motoring magazines, who are usually all over the euro stuff, put the VE Calais on par with the much higher priced 5 series Beamer of the time.

One thing that will be sorely missed is the reliability of these cars in our unique Australian conditions. Nothing else handled the test of time on our roads like the big Holdens and Fords. Everyone knows that XF Ute or the HQ that turned 750,000 kays before running on 7 cylinders and continuing for another 200,000.

My Skyline goes to 5 cylinders and has a heart attack!

[Nee-san]

This has been coming for a long long time, the mere fact that they were asking the government "rent" year upon year shows how dreadfully unsustainable it was.

QANTAS is a different story because they have a strategic national value that an automotive manufacturer does not.


I think it is actually possible for Toyota to continue given the right conditions and flexibility in their workforce, they actually have the right kind of product, I doubt this will happen though
Union officials seem to be willing to cut their nose to spite their face.

Edited December 11, 2013 by Nee-san

[Hertz Donut]

One thing that will be sorely missed is the reliability of these cars in our unique Australian conditions. Nothing else handled the test of time on our roads like the big Holdens and Fords. Everyone knows that XF Ute or the HQ that turned 750,000 kays before running on 7 cylinders and continuing for another 200,000.

Exactly this. Hate 'em or love 'em, they handle abuse and neglect better than almost every other vehicle out there. Our VS Equipe has 280,000km on the clock, the last 80,000km without a single oil change (keep putting it off in the hopes it'll die) and a trans flare on a hard 3-2 kickdown for the past 180,000km that hasn't got any worse despite towing heavy loads on a regular basis. The first owner towed a boat 100,000km with it in 3 years with no trans cooler, and it's been thrashed like a stubborn mule for 14 years by us with near-zero maintenance and it just keeps going. Why won't it die? WHY?!

Meanwhile my Stagea's nearing 7,500km since its last oil change and I can't help but feel like I should do something about it for fear of damaging it.