GM backflips, but Holden strategy unchanged

Senior global General Motors leaders have hosed down any expectation the reversal of a decision to close down Holden’s powertrain engineering department is a sign of things to come.

New Holden chairman and managing director Mark Bernhard confirmed the reprieve during the reveal of the final VF II Commodore 10 days ago, after motoring.com.au first broke the story in August.

It is the second backflip by General Motors after it last year changed its mind about selling off the Lang Lang proving ground. The south-east Victorian facility was originally judged surplus to requirements because of the local manufacturing shut-down.

Bernhard also confirmed the creation of a new Advanced Vehicle Development team that will be tasked with supporting the GM Australia Design Centre also located in Port Melbourne.

These decisions keep an extra 100 engineering jobs at Holden and means around 300 engineering and design staff stay beyond the shutdown of local manufacturing and the death of the locally-developed Commodore in late 2017.

That number pales against the 1200 staff Ford employs at its regional design and engineering facilities in Melbourne, Geelong and the You Yangs proving ground.

The Blue Oval says its design and engineering footprint will make it the biggest single automotive employer in the country once it ceases manufacturing in 2016 and Holden and Toyota follow suit in 2017.

General Motors CEO Mary Barra was clear that the reversal on the powertrain group did not signal Holden was destined to grow to become a similarly-sized and important design and engineering centre.

“It’s a moment in time and a good decision that makes good business sense but I wouldn’t read more into it,” she cautioned during a press conference at the Frankfurt motor show.

“When you look at the resources we have in Australia associated with Holden there is very capable design and technical talent and we are leveraging where it makes sense for them as part of the global team.

“From a design perspective some trends actually start [in Australia], so it’s a sensing post as well. So we’ll look for the right engineering and design activity to be integrated to support the globe.”

Barra’s message was backed up by GM international operations boss Stefan Jacoby, the exec who took responsibility for the decision to close Holden’s Elizabeth plant.

“We are not moving away from our strategy,” he said. “We are taking an opportunity. We understand we have extremely high talents in Australia, which we can further utilise to truly adapt the vehicle to Australian road conditions.

“It also will be reverse learnings, so all these body aspects of Holden will be transformed to Opel in Europe and will be utilised by the Opel team here for Opel and Vauxhall.

“So it’s not all a one way street. It’s a kind of win-win situation which we have there and that drove our decision to maintain engineering capacity in Australia. That together with Lang Lang proving ground makes sense.”

Jacoby also revealed Holden’s engineering reach would stretch into the local region, revealing it had been designated as a regional accessory hub by GM: “This is of importance to drive revenue for vehicles,” he said.

Barra was also asked if there was any prospect of GM at some stage in the future reversing its decision to cease local manufacturing.

“I am not in the business of predicting the future,” she replied. “When I look at it now and the conditions, we made a difficult but important decision to maintain a vibrant Holden brand and profitability over the longer term for the Holden brand and General Motors in Australia and that is what we are focussed on.

“That is the current assessment and that’s where we are at and nothing’s changed in executing that.”