Holden hit by GM's cutbacks

[dubbed]

Tough times get tougher for GM and Holden:

http://business.theage.com.au/busine...0428-akva.html

Holden Australia has been dealt a billion-dollar blow with parent General Motors confirming that it will scrap the Pontiac brand including the Pontiac G8 which is built in the Elizabeth plant near Adelaide.

For more, go to drive.com.au

Holden began exporting the G8, a rebadged version of its top-selling Commodore, early last year and initially planned to export about 30,000 cars a year to the US.

GM scraps Pontiac, slashes jobs
General Motors announces plans to slash plants, hourly workers and dealers, and to eliminate its Pontiac brand by the end of next year.
The global economic downturn saw the car fall short of its initial sales projections, although in recent months it had been performing better. It shipped more than 36,000 cars to the United States and Canada last year.

The move to shut down Pontiac by 2010 is part of sweeping cuts contained in GM's second viability plan. It will mean the loss of nearly $1 billion in exports for Holden, which had invested $77 million to gear up for the shipments. Holden was also planning to export the Commodore ute to the States as a Pontiac, but the vehicle was axed at the beginning of the year.

GM boss Fritz Henderson confirmed exports would finish before the end of the year.

"Our decision on Pontiac will result in the phase-out of G8 from our Australian operation. The car is actually in many ways a very fine car but we are not able to put the marketing resources behind it," he said.

"We would work with dealers to sell down inventory and phase out production and we would expect that by the end of the year."

Holden spokesman Scott Whiffin said Holden didn't envisage any job losses at the Elizabeth plant because the company had already cut its production volumes before the Pontiac announcement.

"The announcement has only just occurred so we don't know what their expectations might be, as the car is currently selling really well.

"It is true to say were disappointed the G8 program is coming to an end _ it is a great car that has been exceptionally well received and reviewed in the US.

"Our focus now is on finding new markets for what is a world-class vehicle in addition to continuing to export cars to Asia, Africa, Europe and the Middle East."

The GM cuts are the latest bid by GM to avoid bankruptcy as the car maker struggles to cope with a drop of almost half in its US sales, and other markets retreat. It has already received $US15.4 billion ($21.4 billion) in loans from the US government.

GM's plan, the result of pressure from the Obama administration to further trim GM's operations, will mean another 7,000 to 8,000 jobs to go on top of the 23,000 already announced. The company will also offload its Saab and Hummer brands, which are distributed by Holden in Australia.

GM also plans to close 43 per cent of its dealerships by 2010 and shutter another 13 of its existing 47 plants which will have a big impact across American towns .

The plan also involves converting lenders' interests into equity, which could result in the US Government owning as much as 50 per cent of the company and the United Auto Workers union holding 39 per cent.

The bond holders have been offered 22 cents in the dollar to convert their GM debt into equity, but it is uncertain whether they will accept the offer. If not, bankruptcy is still an option and a filing with the Securities and Exchange Commission outlined plans for this eventuality.

Henderson expressed sadness in the demise of the 90-year old Pontiac brand by no later than 2010.

''This is a brand which has a considerable heritage in our company, and this is an intensely personal decision in many ways," he said.

There had been talk that Holden's G8/VE Commodore may be sold as a stand-alone Pontiac performance model at other GM dealerships to keep the division's name alive but that idea did not survive the latest round of pruning.

[kryten2001]

geeze that's a real shame...

Of all the GM companies, Holden is probably one of the strongest. Let's hope they get through it OK.

I recall reading somewhere (not so long ago), that VW is emerging as the seller of the most cars in 2009.. Even topping Toyota...

What interesting times...

[anthony]

I saw that the Opel Astra range has been discontinued in South Africa recently,and beleive that Holden is going to be discontinuing the Astra range in Australia as well very shortly...