Holden heads for full capacity

Holden is almost back to full production capacity and could go to three shifts at its Elizabeth plant on the back of burgeoning export sales. That's the news this week from GM Group Vice President and President of GM Asia Pacific, Nick Reilly (pictured).

In Australia for the APEC summit as well as planning, budget and product meetings with new Holden boss Chris Gubbey, GM's Asia Pacific chief has confirmed that the carmaker's South Australian production facility would be at or near full two-shift production next month. And flying in the face of comments from Gubbey's predecessor, Denny Mooney, Reilly also stated that the Elizabeth plant could return to a three-shift workforce to satisfy export demand.

The current production fillip isn't a return to the salad days of a burgeoning local large car market, but rather Holden's VE and WM ranges' export popularity. Production of Commodore-based Pontiac-badged G8 sedans (more here) as well as more cars for the Middle East and South America is the backbone of the added demand. And now it looks almost certain VE Ute will join the export march.

"Part of the reason we're getting to maximum capacity is the US volume," Reilly told The Carsales Network.

"With our projections on the various vehicles we may or may not sell in the US, we think we can produce that [number] at Elizabeth with two shifts with a bit of overtime right now. If they start to sell much better than we have anticipated then we'll have to look at doing something else and clearly a third shift would be a possibility," he said.

Reilly said the plant's two-shift maximum capacity of between 145,000 and 147,000 vehicles satisfied "internal planning" sales projections on all GM's current VE/WM-based programs. But he commented that sales projections for the US-market Aussie built cars were fluid.

"The range of [US] sales [per model] is quite big -- it's not as if we are replacing another model. There's no history so we'll have to see how well it [sic] sells."

Quizzed directly on the prospect of the new Ute being part of the projected US volume he commented: "I don't think we've announced any intention to sell Ute in the US."

When pushed for more detail on the breakdown of the full capacity uptake and whether Ute was included, Reilly said the total included programs that are currently planned, cheekily adding: "We haven't necessarily announced all the [VE and WM] products we've planned."

Helping the likelihood of Holden's hauler making it Stateside is GM's latest advice, also delivered via Reilly, that the punitive 25 per cent tariff borne by imported 'pick-ups' (the so-called Chicken Tax) in the USA would not apply to the passenger car-based Ute

Reilly said he hoped the Pontiac G8 export program would continue "forever", saying though that the current car would have a particular lifespan, but the G8 off-shoot could continue with the next generation Commodore.

He stated that GM USA's current negotiations with the UAW autoworkers union would have no bearing on the G8's build location nor plans to increased or decrease production locally.

"Right now the demand is just about right for our [Australian] capacity," Reilly said.

"Certainly if the demand around the world came up for that [a third shift] then there's no reason we wouldn't [add capacity]. We will put as much production into Australia as we could sell," he said.

Reilly says GM's outlook is to maintain at least full production at both Elizabeth and Holden's engine plant in Port Melbourne "for the next several years".

Though the Asia Pacific chief revealed the Elizabeth facility ranked below average in terms of measured efficiency during the VT-VZ era, the investment made during the changeover to the VE and its derivatives has placed the facility in GM's "top 10-15 per cent".

"Our manufacturing people have done a terrific job in improving productivity and taking the cost out of out of manufacturing facilities," Reilly said. He cautioned, however, that costs and the strong Australian currency continue to pose challenges for the carmaker in terms of international and local competitiveness.

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