GM, Desperate Restructuring... 164-Year-Old 'Holden' Closes Its Doors

GM Acquired Holden in 1931

Plans to Wind Down Sales Network by Next Year

Cutting Over 800 Jobs Due to Shrinking Australian and New Zealand Markets

Chevrolet Sales Halted in Thai Market

[Asia Economy Reporter Kwon Jaehee] Australia's sole automobile brand, 'Holden,' is coming to an end after 164 years of history. GM, struggling with poor performance, has decided to permanently cease Holden sales by 2021. GM also announced plans to downsize operations and sell factories not only in Australia but also in New Zealand and Thailand.

According to the Wall Street Journal (WSJ) on the 17th (local time), GM plans to wind down Holden's sales network and design centers, Australia's only automobile brand, by 2021 due to poor performance. During this period, GM will also reduce sales networks and design and engineering business units in New Zealand.

GM's decision is due to the sluggish Australian market. According to the Federal Chamber of Automotive Industries of Australia, Holden's market share last month was only 3.7% of the new car market in Australia, down 1.4 percentage points from 5.1% in the same period last year. Last year, Holden's sales volume was 43,176 units, the lowest since 1954.

GM stated, "We have explored various options to continue operating the Holden brand but could not find a way," adding, "We plan a small specialized vehicle business, but which brand to sell is undecided." They also added, "We will continue to provide services such as parts supply for at least 10 years to existing Holden customers."

The withdrawal of the Holden brand is seen as a blow to Australian pride. Holden started as a harness business in Australia in 1856 and was acquired by American GM in 1931 during the Great Depression. Despite continuous business difficulties and the humiliation of moving production lines from Australia to Thailand in 2017, Holden maintained strong pride as Australia's only automobile brand.

Residents of Victoria, Australia, Holden's hometown, expressed deep sorrow over GM's decision. Michael O'Brien, spokesperson for the Victorian opposition party, commented, "The end of Holden, an iconic presence in Victoria, is very sad."

GM plans to cut a total of 828 jobs due to business downsizing not only in Australia but also in the New Zealand market. Severance pay and employment transition support programs will be provided to the laid-off Holden employees.

GM also announced it will stop selling the Chevrolet brand in the Thai market and sell the local Rayong plant to China's Changcheng Automobile. The Rayong plant produced Chevrolet Colorado pickup trucks, Trailblazer SUVs, and Holden vehicles. GM said, "The Rayong plant's operating rate is low, making continued production impossible."

With the withdrawal from the Thai market, GM plans to cut 1,500 of the approximately 1,900 local employees.

GM expects to achieve $300 million in net cash and $1.1 billion in cost savings through business downsizing in Australia, New Zealand, and Thailand markets.

GM has been steadily restructuring its business since facing bankruptcy in 2009 due to the global financial crisis. Under the policy of withdrawing from low-profit markets, GM withdrew the Chevrolet brand from Europe in 2015 and sold German Opel and British Vauxhall to the French automaker PSA Group in 2017.

Mary Barra, GM's CEO, said, "This is a measure to focus on profitable markets, and going forward, GM will concentrate on the North American and Chinese markets," adding, "We will prioritize investment in areas leading future growth in mobility, such as autonomous and electric vehicles."

GM aims to launch 20 electric vehicles by 2023. It plans to invest $2.2 billion in the Detroit-Hamtramck assembly plant to produce the GMC Hummer electric vehicle (EV) by the end of 2021. GM's autonomous vehicle unit, Cruise LLC, is also developing an electric shuttle called Cruise Origin in partnership with Honda. Additionally, GM is investing $2.3 billion with LG Chem to build a battery cell manufacturing plant in Rose Town, Ohio, USA.

GM recorded a net loss of $194 million in the fourth quarter last year. This marks a turnaround from a $2 billion profit in the same period the previous year, with sales also dropping 20% to $30.8 billion during the same period.