Holden could be sold as GM goes into 'death spiral'

[act2617]

Holden could be sold as GM goes into 'death spiral'
Robert Wilson
25mar06

HOLDEN could be sold off if a desperate General Motors continues to fall into a financial death spiral, a global automotive expert says.

The principal of international automotive strategic consultants Autopolis, Graeme Maxton, said GM was already taking desperate measures to avert the greatest crisis in its 98-year history and sell-offs of its better performing divisions couldn't be ruled out.
"If you look at in terms of pure economics, their investment in Australia must be under question," he said yesterday.

"GM is having to sell off the family silver and close down anything that is not economic to cut costs in order to survive for the next few years," he said.

The Detroit-based automotive giant had already begun disposing of its shareholdings in Japanese makers Isuzu, Subaru and Suzuki, despite these being strategically significant ventures, Mr Maxton said.

And GM yesterday announced it had sold its property financing arm, GMAC Commercial Holding, for $12.5 billion.

"All of these are desperate measures to stay alive. What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again. But it's absolutely hidebound right now. It has so much debt and so many liabilities that it has to simply cut them loose," Mr Maxton said. "They can't do anything until their situation improves but they've got themselves into something of a death spiral because the more they have to cut, the more consumers stay away from their products, the more their market share goes down and the more their losses go up."

Mr Maxton acknowledged Holden was not in the same dire sales situation as GM's US brands whose combined market share fell to a historic low of 25 per cent last year. But he said that the more profitable Holden was, the more tempting it would be for GM to sell it off.

"The question for Holden is who would buy it. There are actually not many companies except maybe a Chinese maker who would buy it right now," he said.

GM's traditional global rival, Ford, was in just as much financial trouble, Mr Maxton said.

"Ford is in many ways in exactly the same situation. The big difference is that GM really does understand how serious its situation is," he said.

"Ford is still pretending it's not that serious but their market share has fallen even more than GM's. The company hasn't woken up to what it has to do."

The cycle of cutbacks and rationalisation that threatened Holden also applied to Ford Australia, Mr Maxton said.

"It's absolutely the same situation but it may take a bit longer because Ford headquarters is in denial," he said.

http://www.theaustralian.news.com.au...592808,00.html

[347_XR8]

Well there ya go

[ef_classic]

Can Holden "leave" GM or is there a big contract involved?

[Deanodriver]

I personally doubt that GM will sell of Holden, and even if they do, I bet they'll keep the engine plant, there'd have to be enough demand for 4cyl & V6 engines in GM cars to warrant it staying in their hands.

Who else thinks that Saab will be the next GM owned car company to be sold off, rather than Holden?

[act2617]

Originally Posted by ef_classic

Can Holden "leave" GM or is there a big contract involved?

Holden belongs 100% to GM US !

[ltd]

Scary times for GM and Ford, Hopefully there are ways to salvage both.
The death of the local auto industry will be a dark time in Oz, and would mean that prices on all cars could potentially go up significantly. Don't believe me?
Well, besides taxes why else are mercedes and BMW about 250% of the price that the same vehicles are sold in the USA?

Scary indeed.

[ltd]

I'll be more worried to hear the slogan;
"Holden means a great deal to Kim Jong Il"
The instrument cluster would be filled with pictures of his head, and the colour would only be that of his grey costume.

[ClevlndStemer]

once they sort out this health plan stuff and other non-manufacturing costs (including staff changes, lack of management, etc) then they need to get some decent cars out there. I mean the SUV isn't going to be there forever, you can't rely on them or the sports cars. They need something with quality, decent price and looks to compete with the camry.

[Mark351]

Unlikely scenario #1 - Ford buys Holden...

[Falcon Freak]

As said above, GM will continue to sell any stake in other automotive companies which it has aquired over the years before they consider selling Holden. In the last year GM has bailed out of Fiat, Subaru and Suzuki. I predict that GM will bail out of Isuzu next.

FF

[act2617]

Some interesting numbers.

Take your own weekly wage and take it from there to see how much it would cost you.

Holden 48-215: the first all-Australian car

The Australian Government had been interested in the idea of an Australian mass produced motor vehicle since the mid-1930s, but this would not become a reality for over a decade. On 29 November 1948, Prime Minister Ben Chifley unveiled the first Holden 48-215, which became affectionately known as 'the FX'.

The price was set at £733 (including tax), which represented a staggering ninety-four weeks' wages for the average worker at the time. Despite this, the car was an immediate success and Holden could not satisfy demand quickly enough. Eighteen thousand people had signed up and paid their deposit without even having seen the vehicle.

When the FJ Holden was released in 1953, the economy had significantly recovered. The car now cost £1,074 (including tax), representing sixty-eight weeks' wages for the average worker.

http://search.netscape.com/ns/boomfr...ar%2Findex.htm

[new2ford]

Originally Posted by act2617

What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again.

I wouldn't want to be an ex GM employee. I suppose the next piece of news will be how they're all suddenly dying of myterious illnesses, hit and run accidents etc!

[birdy]

Easy come easy go what are your proposals that we at ford forum can impliment that could possably save the enemy living in sa makes it hard as they are major employers but here we go again ready to ИИИИИ but do #### all???

[XplosiveR6]

Originally Posted by act2617

"All of these are desperate measures to stay alive. What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again.

i dont understand this part, GM having pensioners? can someone explain this please

[ClevlndStemer]

Originally Posted by EF_Dave

i dont understand this part, GM having pensioners? can someone explain this please

they continue to pay the staff even after they retire.

however when it says ford are in denial, i wouldn't say that. Ford certainly know the problem exists, but the difference is it has been happening for a lot longer to ford.

[Dodge]

put in in the rover basket, i wont miss them

[bundy bruiser]

I saw a show I while back saying that their labour cost were very high in the US due to a few unions bargaining for lots of extras payed to their staff. Basically their staff costs don't cut it, good for the worker I suppose.
GM did a lot better last quarter, but who knows.....

[paulvdb]

Originally Posted by Dodge

put in in the rover basket, i wont miss them

Yeah? Is that so? I'd like to see your car when all that's avail in Australia is the blob-on-wheels whitegoods Camry or 100 varieties of Korean&Chinese cardboard cars. I'm sure you'll be laughing then.

I'm hoping that there's enough cash for the local guys to buy themselves out. The real question is what access Holden would have to GM engines and gearboxes if they split.

[XRQTOR]

Dont they continue to pay the worker's after they sack them up untill they find new work or something along those lines.

[mik]

wouldn`t surprise me if toyota bought holden out they`ve worked with holden before, and they could afford it i rekon, they seem to think longer term financially and smarter than some other companies.

[seano14]

Originally Posted by ClevlndStemer

they continue to pay the staff even after they retire.

alright, i'll bite. why do they do this? : :

[new2ford]

Originally Posted by seano14

alright, i'll bite. why do they do this? : :

superannuation - we have it here too.

[LUXO_8]

it was explained to me, the car manufacturers in the US used to pay up full private health for all the workers....

now those workers are all old, and heavily relying on the health system...... which GM and FORD have to pay, which is fast screwing them over......


private health for car workers.........certainly seemed like a good idea at the time

[vztrt]

Originally Posted by mik

wouldn`t surprise me if toyota bought holden out they`ve worked with holden before, and they could afford it i rekon, they seem to think longer term financially and smarter than some other companies.

If that happened would the next lot of commos be overpriced bland FWD cars?

[XRQTOR]

Originally Posted by new2ford

superannuation - we have it here too.

super is only a smal percentage of your weekly wage paid to you while you work, the system they have over there pays 8o% of the worker's weekly wage once they reach retirement age.

[buickman]

Didn't G.M at one stage during the early commodore years had GMH go it alone in Australia?
Ford tried to test the market to supply large cars to Australia in the 90's the taurus well it was a sales success.
The americans build passanger cars that don't sell as well as they should against the Honda's, Toyota's. Nissians & Mazda's over there and thats starting to happen here.Plus I read the Chinese want to start selling their cars here starting at around the $10,000 mark.Good for the commuter who wants a cheap run around but no good for car enthusiasts or the domestic employment market.

[coyote]

Originally Posted by buickman

Ford tried to test the market to supply large cars to Australia in the 90's the taurus well it was a sales success.
.

By what measure would you consider the Taurus a success ????
Got bagged by the media, Drove like a wounded duck (personal opinion) sold in record low numbers and was discontinued instead of replacing the Falcon

[buickman]

Originally Posted by coyote

By what measure would you consider the Taurus a success ????
Got bagged by the media, Drove like a wounded duck (personal opinion) sold in record low numbers and was discontinued instead of replacing the Falcon

No I was only being sarcastic. I hired one in the states for 3 weeks it was reliable but yeah light power steering poor performance & typical V6 fwd difficult maintance I personally would not buy a large fwd car

[RPO83]

He was being sarcastic coyote.

The Taurus program was never a devious plan to see if they could replace the Falcon, it was because Ford wanted to add a few more units to an export program that was for the Japanese market.

The UAW must be proud that their hard work in screwing down contracts above and beyond other manufacturers will ultimately screw workers and their economy in the end.

[Falcon Freak]

Originally Posted by RPO83

The UAW must be proud that their hard work in screwing down contracts above and beyond other manufacturers will ultimately screw workers and their economy in the end.

The UAW is an example where a union has become too powerful and has forgotten the reason why it exists - to protect the worker!

I'm not union bashing. What I am trying so say is if GM US and Ford US built good cars that sold in high numbers then there would be enough money going around to cover all expenses, including these union negotiate perks. As GM and Ford aren't doing well in the US, they find themselves in a situation where it is the union negotiated perks which are causing them the most damage at this point in time.

FF