Holden wins govt support for manufacturing

Holden has announced today a commitment to build two all-new cars in Australia into the second half of this decade.

The company says that the investment will be worth $4 billion to the economy over the course of the program, with the South Australian and federal governments funding a $275 million component of the initial sum to be invested, $1 billion. It's good news for the workers at Holden's Elizabeth plant, but also for those employed by original equipment parts suppliers. Holden MD Mike Devereux (pictured), who has been pushing for further government support since the end of the Green Car Innovation Fund, welcomed the government initiative at a press conference today.

“Co-investment of this kind is critical for our industry and helps Australia compete against other car making countries that protect their industries through tariffs and/or financial support,” he said.

“Holden will receive government co-investment of $275 million and directly invest well in excess of a billion dollars in the 10-year vehicle development and manufacturing program. The investment will help Australia retain its capability to design, engineer and build cars with two all-new vehicles going into production at Elizabeth, South Australia, in the second half of this decade.

“The two new Australian-made cars will be world-class. They will be underpinned by global architectures from within General Motors and bring new fuel-saving, connectivity and safety technologies to Holden’s portfolio. The program also delivers a significant return on investment. We estimate Holden will inject around $4 billion into the Australian economy over the life of the program.”

The mention of "global architectures from within General Motors" hints that the next-generation Commodore (or the current car's successor at least), will not be built on a unique platform, as the VE Commodore has been. Engineers negotiating an EBA (Enterprise Bargaining Agreement) had previously leaked to the press that the next-gen Commodore would not be built on an indigenous platform.

At that time, Holden may choose to go with a front-drive platform — a choice also faced by Ford, it's believed. If there's one factor in favour of Holden retaining rear-wheel drive for the Commodore, it's the support the company receives for the large-car package in its present form — from former Holden execs, Mark Reuss and Alan Batey. Devereux naturally made no mention of future product plans, but did promote the success of the Commodore in the large-car segment.

“Holden’s business model has been a great success in this competitive and challenging environment. Last year we sold more locally-made cars in Australia than any other manufacturer and nearly 60 per cent of all Holdens sold in this country were built in Elizabeth,”he said.

“We are making the cars Australians want. Commodore and Cruze are top five selling cars in Australia – so it’s clear we’re making small and large cars that meet the needs of both ends of the market. Government investment has been instrumental in reshaping Holden’s manufacturing operations and has enabled us to build the Cruze small car in Australia, rather than import it. We are acutely aware that with government investment comes great responsibility. We are focused on continuously improving our efficiency and quality to help us be amongst the best in the GM world.

“It’s also important that people understand the economic benefits that flow from this public investment. Holden is delivering a very attractive return on investment. We estimate the current locally-built Cruze will generate more than a billion dollars of economic activity from Holden in Australia over the life of the program.”

Also present at the media conference were Prime Minister Julia Gillard, Minister for Industry and Innovation, Greg Combet, Premier of South Australia, Jay Weatherill and AMWU Vehicle Division Federal Secretary, Ian Jones.

Holden is now the second of the three car companies to recommit to local manufacturing beyond 2015 — the first being Toyota just last week, during the launch of the Camry Hybrid.

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