THE LONG GOOD­BYE

With its car­mak­ing days al­most over, Holden is on a drive to rein­vent it­self

The Weekend Australian - - INQUIRER - PHILIP KING MO­TOR­ING EDI­TOR

And then there were none. Next Fri­day the cur­tain comes down on Aus­tralia’s car in­dus­try, with the fi­nal act a Holden Com­modore rolling off the as­sem­bly line at its plant in Ade­laide.

It fol­lows the exit of Toy­ota ear­lier this month and the de­par­ture of Ford last year. Of course, the date was set ages ago and the de­bate about the in­dus­try’s fu­ture was over well be­fore that. It ended in De­cem­ber 2013 when Holden de­cided to quit. Ford had al­ready an­nounced its in­ten­tion to leave and the crit­i­cal mass re­quired by the in­dus­try — in terms of lo­cal sup­pli­ers and lo­gis­tics — needs at least two play­ers to be vi­able. Toy­ota would have stayed. Holden cast the de­cid­ing vote.

Per­haps it’s only fit­ting that it ends with Holden since that’s where it be­gan: in 1948, with Aus­tralia’s Own Car, the 48-215, or FX. To most Aussies it’s as dinky-di as the fa­mous ad sug­gests: “Foot­ball, meat pies, kan­ga­roos and Holden cars”. Even now, it’s not un­usual to find some­one who’s sur­prised that it is owned by Gen­eral Mo­tors.

De­spite that, or per­haps be­cause of it, ex­actly what was made here was of­ten a sub­ject of watercooler con­fu­sion. Does Holden make th­ese? In many cases, it did. The Com­modore came in nu­mer­ous va­ri­eties, from Ute to Caprice. In the past, there were Monaros and To­ranas and Cami­ras and Gem­i­nis and Vec­tras. If you’re old enough, early mem­o­ries may in­clude road trips in a Holden HQ or EK. Holden has made 7.6 mil­lion cars all told — more than Ford’s 6 mil­lion and dou­ble Toy­ota’s to­tal. No won­der it has left an im­pres­sion on the na­tional psy­che.

For a cou­ple of decades from the mid-1950s it was ut­terly dom­i­nant. A Holden was the choice of al­most ev­ery sec­ond buyer and one in three ve­hi­cles on the road wore the Lion badge. Pro­duc­tion peaked at 166,274 in 1963 when the EH be­came the fastest sell­ing Aus­tralian car of all time, with 250,000 snapped up in 18 months.

By the end of the decade, Hol- den em­ployed 26,000 at 10 lo­ca­tions, with an­other 20,000 at 600 deal­er­ships across the coun­try. In 1968, a Monaro GTS gave Holden its first Bathurst win, re­peated a year later. Holden’s self-as­sur­ance was re­vealed by the ex­tra­or­di­nary Hur­ri­cane con­cept, a fu­tur­is­tic su­per­car-style two-seater that still looks mod­ern to­day.

As with Ford and Toy­ota, Holden’s last day as a car­maker will take place be­hind closed doors out of re­spect for the 945 em­ploy­ees who will walk out of the fac­tory for the last time. Chair­man and man­ag­ing di­rec­tor Mark Bern­hard says quit­ting lo­cal pro­duc­tion is the most pro­found change at the com­pany since that first car and of course it will be dif­fi­cult.

“There’s no ques­tion clo­sure is go­ing to be gut-wrench­ing,” he says. “We’re go­ing to lose some ter­rif­i­cally skilled and pas­sion­ate peo­ple who put their hearts, minds and souls into Holden.” Look­ing af­ter them is pri­or­ity one, he says. “We’ve worked through tran­si­tion cen­tres and 84 per cent of em­ploy­ees who have left Holden have suc­cess­fully tran­si­tioned to new roles, retirement or study.”

As to the broader ques­tion of whether the loss of com­plex man­u­fac­tur­ing is a tragedy for the na­tion or just an­other chap­ter in the glob­al­i­sa­tion story, he’s ag­nos­tic. “That’s for some­one other than me to an­swer,” Bern­hard says. “As a na­tion we’re mov­ing for­ward. My job is to talk about us as a busi­ness, and we can see a bright fu­ture beyond man­u­fac­tur­ing.”

Cer­tainly Holden has gone through trans­for­ma­tions be­fore, start­ing life in 1856 as a sad­dlery be­fore mor­ph­ing into a coach­maker, then a car-body builder in the early 1900s. Its pref­er­ence for us­ing chas­sis from Gen­eral Mo­tors brands, such as Buick and Chevro­let, huge out­put and well­known brand brought it to the at­ten­tion of the US giant, which merged it with its Aus­tralian op­er­a­tion. In 1931, Gen­eral Mo­tors-Holden’s Ltd was born.

Aside from em­ploy­ees, Bern­hard ad­mits brand loy­al­ists will feel the wrench. “For some cus­tomers who are hugely pas­sion­ate about the prod­uct that we’ve de­signed and de­vel­oped and man­u­fac­tured lo­cally it’s go­ing to be a very sad day on Oc­to­ber 20,” he says. For some cus­tomers, but not all. In­sid­ers be­lieve most po­ten­tial new car buy­ers — as many as nine out of 10 — are al­ready aware that soon ev­ery new Holden ar­rives on a boat. And there’s a change in sen­ti­ment: most no longer care where their new wheels are made.

It’s show­ing up in the num­bers. Lo­cal cars have been over­shad­owed by im­ports for decades as a com­bi­na­tion of steep tar­iff re­duc­tions, “user-chooser” lease ar­range­ments and for­eign ex­change move­ments eroded their price ad­van­tage. Dur­ing the past decade Holden has re­lied more on lo­cally built ve­hi­cles than Ford or Toy­ota, but even its show­rooms re­flect the change. Of the 1.2 mil­lion cars it has de­liv­ered since 2008, lo­cals only just shade im­ports 51 per cent to 49 per cent.

Two other fac­tors have been crit­i­cal: chang­ing buyer pref­er­ences and mar­ket frag­men­ta­tion. The days when ev­ery car was Holden or Ford were al­ready be­hind us 25 years ago, but the large sedan was still the de­fault fam­ily car.

But then along came the SUV. By the late 90s, the SUV was mov­ing in on large cars’ ter­ri­tory and they be­gan an in­ex­orable slide, from 30 per cent of the mar­ket to just 3 per cent of it now.

“The key thing is the way the mar­ket has shifted,” Bern­hard says. “If you go back 15-20 years ago the Com­modore was the No 1 sell­ing ve­hi­cle in the coun­try at 100,000 units. Now the top sell­ing ve­hi­cle is about 40,000 units.”

So mak­ing one model, or even two or three, is no longer enough to keep a fac­tory busy. Im­ports are go­ing to be a large part of the pic­ture no mat­ter what Holden does.

To many ob­servers, though, Holden missed a chance to change tack. It stuck to large cars and big en­gines when blind Freddy could see their days were over.

If the large car de­cline looked ob­vi­ous to some, it’s easy to see why Holden might have been over­con­fi­dent. Af­ter swap­ping top spot re­peat­edly with Ford’s Fal­con dur­ing the 90s, the VT Com­modore that ar­rived in 1997 was about to re­vive the brand’s glory days. Sales took off. One year later VT busted pre­vi­ous Com­modore records with 94,642 buy­ers and sus­tained de­mand above 80,000 for the next five years.

It em­barked on a 15-year run as Aus­tralia’s favourite car. Be­fore long a buoy­ant Holden re­vived the Monaro and, it seemed, couldn’t miss a trick. Ex­ports were boom­ing again as Com­modores were shipped to the Mid­dle East, and it got a sur­prise boost af­ter com­ing to the at­ten­tion of Detroit.

One ex­ec­u­tive in par­tic­u­lar cham­pi­oned Holden’s ex­per­tise at en­gi­neer­ing large, rear-wheel drive cars and pushed through a pro­gram to sell the Monaro state­side. Re­badged, it would res­ur­rect the Pon­tiac GTO, a revered name­plate among US en­thu­si­asts.

In 2004, out­put from Ade­laide reached 165,252 cars — the high­est to­tal since 1963 — and the fol­low­ing year it set an ex­port record of 60,158. Rev­enue hit $6.8 bil­lion and profit $301 mil­lion. Let the good times roll!

Be­hind the scenes, Holden was dou­bling down on its large car com­mit­ment and work­ing on some­thing spe­cial. Un­like pre­vi­ous cars, which had started life as US or Euro­pean de­signs, the next gen­er­a­tion VE Com­modore was a lo­cal project from the ground up. Un­der­neath the sharp lines was a plat­form that aimed to be­come the ba­sis for rear-drive cars through­out GM. It was a pitch for full in­te­gra­tion within the giant’s prod­uct de­vel­op­ment op­er­a­tion on Aus­tralia’s own terms.

The VE was the right car at the wrong time. It flew in the face of ris­ing con­cerns about fuel con­sump­tion and the move­ment away from large sedans. It could not ar­rest the slide. Sold in the US as the Pon­tiac G8, it had one good year be­fore the global fi­nan­cial cri­sis hit and all GM’s myr­iad problems came home to roost. GM axed plans for rear-drive cars — the Chevro­let Ca­maro was the sole ex­cep­tion — and killed the Pon­tiac brand, tak­ing Holden’s hopes with it. With VE — now the up­graded VF — gone, one of the first new cars to ar­rive will be the next Com­modore. The name­plate is re­tained be­cause “it has been syn­ony­mous with Holden”.

How­ever, the ZB Com­modore that reaches show­rooms next Fe­bru­ary can hardly be more dif­fer­ent. Like the orig­i­nal, it hails from Ger­many and Opel, where it’s badged In­signia. But it’s nar­rower than VF and there’s no sedan; it comes as hatch­back or wagon. It breaks with Com­modore’s rear-drive tra­di­tion, of­fer­ing front or all-wheel drive. Top­spec ver­sions get a V6 while base cars em­ploy a four-cylin­der, the first in a Com­modore since the mid-80s. And for the first time in a half-cen­tury there’s no V8.

The name­plate may res­onate, but even Holden does not ex­pect it to be the defin­ing state­ment of the brand it once was. Spokesman Sean Pop­pitt says Holden needs to be “re­vamped for a more mod­ern and mul­ti­cul­tural Aus­tralia, but with­out los­ing our roots”.

“Re­tain­ing an au­then­tic iden­tity — be­cause we were born here, we con­tinue to op­er­ate here — is crit­i­cal to who we are,” Pop­pitt says. “But it needs to be ver­sion 2.0, no doubt about that.”

Nur­tur­ing those roots means Holden will race the new body shape in Su­per­cars, which also move to V6s in 2019, and re­tain spon­sor­ship links with the NRL and AFL club Colling­wood.

Nor has the run­away suc­cess of Ford’s im­ported Mus­tang es­caped its no­tice. Beyond the prom­ise of “V8 sports cars in the fu­ture” it re­fuses to com­ment. But it has qui­etly en­listed tun­ing out­fit HSV to con­vert the US Chevro­let Ca­maro, a coupe pow­ered by a 6.2litre V8, to right-hand drive. With a price north of $80,000, the first ex­am­ples will be­come avail­able early next year. The next gen­er­a­tion will be made in right-hand and left-hand drive ver­sions, ob­vi­at­ing the prob­lem.

Even bet­ter from an en­thu­si­ast point of view, the next gen­er­a­tion Chevro­let Corvette due at the end of the decade also will be a global de­sign, giv­ing Holden a proper su­per­car to sell.

Con­tro­ver­sially, Corvette and Ca­maro will re­tain their Chevro­let badg­ing — and Holden bris­tles at any sug­ges­tion its brand may have been dropped al­to­gether.

“GM sees a strong and bright fu­ture for us in this mar­ket­place,” says Bern­hard. “It’s as sim­ple as that.” He also de­nies GM was tempted to sell its Aussie out­post, de­spite re­treat­ing this year from prob­lem­atic mar­kets in­clud­ing Rus­sia, In­done­sia and most no­tably Europe, via the sale of Opel to Peu­geot Citroen (PSA).

Opel re­mains crit­i­cal to Holden’s plans. As well as sup­ply­ing the next Com­modore, the As­tra hatch­back comes from its fac­tory in Poland. Bern­hard says the Opel sale agree­ment in­volves wa­ter­tight guar­an­tees to sup­ply those mod­els for the next five to six years, with Opel also a cru­cial sup­plier to GM main­stay Buick.

Other small cars, such as the As­tra sedan (for­merly Cruze), Ba­rina and Spark, come from GM’s South Korean op­er­a­tion, while the Colorado pick-up and Trail­blazer SUV hail from GM Thai­land. The first of a new wave of SUVs will be the Equinox, a mid-sizer due next month, fol­lowed by the larger Aca­dia next year. Both are built in North Amer­ica. It means the core of Holden’s of­fer­ing will come from GM but it can be strate­gic about what it ships in and that can in­clude other GM brands such as Chevro­let or even, down the track, Cadil­lac.

“We ex­pect to have a sig­nif­i­cantly more di­ver­si­fied port­fo­lio rather than re­ly­ing on one prod­uct,” says Bern­hard. “We’re try­ing to ap­peal much more broadly to the Aus­tralian pub­lic.”

Putting a whiff of Aus­tralia into this potpourri will be the job of some of the 350 de­sign­ers, en­gi­neers and tech­ni­cal staff who are be­ing re­tained. They will tune for lo­cal con­di­tions, with what Holden hopes will be telling changes to key com­po­nents such as sus­pen­sion and steer­ing.

“We’re very proud we built the in­dus­try here and we be­lieve we do know Aus­tralians best,” Bern­hard says. “We’re tak­ing the best prod­ucts from GM around the world and ba­si­cally Aus­tralian­is­ing that prod­uct.” The main fo­cus of the team will be projects across the GM world, with Aus­tralia’s rep­u­ta­tion for de­sign and de­vel­op­ment ex­per­tise en­sur­ing that side of the busi­ness con­tin­ues.

The other 650 cor­po­rate staff re­tained will have the task of ar­rest­ing Holden’s plum­met down the sales charts. It’s 15 years since it was our favourite brand and its share of the mar­ket has been slashed by two-thirds. Its re­tail net­work is shrink­ing in re­sponse, with an­other 20 deal­er­ships to close, leav­ing 200. This year, sales have dropped a fur­ther 12 per cent.

Bern­hard says it forces a re­think. “It does change the way we look at the busi­ness in­ter­nally. It’s more of an op­por­tu­nity to re­ally fo­cus on the cus­tomer, the way we look af­ter them.”

Per­haps that’s al­ready pay­ing off. The lat­est sales sat­is­fac­tion sur­vey from re­search out­fit JD Power puts Holden third, ahead of Ford, Toy­ota and even Mazda. The lat­est Roy Mor­gan in­ten­tion to buy re­search also shows Holden on the up. Re­in­forc­ing this, Holden will in­tro­duce a sev­enyear war­ranty to re­as­sure buy­ers the brand is here for the long haul.

But can it be a con­tender again, or are its best days be­hind it? Bern­hard is con­fi­dent. “Ab­so­lutely we’re a force. As we look for­ward we ex­pect to be a sig­nif­i­cant pres­ence.”

‘We’re tak­ing the best prod­ucts from GM around the world and Aus­tralian­is­ing that’ MARK BERN­HARD CHAIR­MAN AND MAN­AG­ING DI­REC­TOR, GM HOLDEN

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.