Football, meat pies, kangaroos and Holden cars.
The iconic advertising jingle summed up the place in the Australian culture, psyche and heart of our very own automobile. Australians took pride that their local car manufacturer could compete with the likes of U.S. giant Ford. And even though Holden ceased local manufacturing in October 2017, the brand itself remained, and lived on as a national symbol.
But with the February announcement by General Motors that it would cease production of right hand drive vehicles by the end of 2020, even the symbol will soon disappear from our roads.
The decision will affect about 200 dealerships, with around 9,000 employees expected to lose their jobs.
There are around 220 Holden dealerships across Australasia. General Motors offered a compensation package, which dealers rejected as inadequate, and thus a lawsuit worth potentially $2 billion looms (see story – page 25).
AADA and dealers have met with Prime Minister Scott Morrison and secured a Senate Inquiry into the Holden departure (see story – page 23).
Regardless of the outcome of the Senate Inquiry or the lawsuit, Holden’s 72-year history as an automobile brand – and 168-year history as a company – is all but over.
The Holden company began as a saddlery manufacturer in the 1850s, evolving to automobile upholstery repairs in the early twentieth century. Within a decade, the company was producing vehicle body shells, and even assembled bodies for the Ford Motor Company Australia.
The company became a full-blown car manufacturer as the result of an idea of then-Prime Minister Ben Chifley, who was concerned that Australia was becoming cut off from supplies during World War II, and should therefore build its own car.
The Holden 48-215, also known as the FX, was the first vehicle to be manufactured entirely in Australia. Mr Chifley launched the family sedan at Port Melbourne on 29 November, 1948.
Over the years, Holden produced many iconic models, including the FJ series, the HQ, the Monaro, the Torana, the Gemini, the Kingswood, the Ute, and the Commodore.
In competition with the Ford Falcon in the large family sedan class, the Commodore eventually became Australia’s best-selling vehicle and the nation’s favourite car. Its many generations won several Car of the Year awards over the four decades (1978-2017) of its manufacture, and it was exported to South Africa, Brazil, the Middle East, Southeast Asia, North America and the United Kingdom.
Holden’s financial problems began in the 1980s, when production of the unsuccessful Camira and the failed WB series, combined with the 1979 energy crisis, contributed to accumulated losses of more than $500 million by the middle of the decade. The assembly plant in Woodville, South Australia, was forced into closure, and in December 1986, GM paid off Holden’s $780 million in mounted losses.
The Commodore’s success led a recovery in the 1990s, as Holden increased its market share from 21 percent in 1991 to 28 percent in 1999. in addition to the Commodore, the company exported locally-produced engines to power cars manufactured in other countries.
Ultimately, the Australian market proved too small, and with the reduction in vehicle import tariffs from 57.5 percent in 1987 to 22.5 percent by 1997, to just 5 percent by the 2010s, local manufacturers were finding it increasingly difficult to compete with the economy of scale enjoyed by overseas competitors.
The $600 million development of the VT Commodore drove international expansion, but locally, sales began to decline. From a 27.5 percent market share in 2000, Holden sales dropped to 15.2 percent by 2006, along the way losing the number one sales position in Australia to Toyota (in 2003), a position it never recovered.
From combined profits of $843 million in 2002-2004, Holden lost $290 million in 2005-2006. The workforce at the Elizabeth plant was reduced, resulting in 1400 job losses, and the company continued to lose money, posting a $6 million loss in 2007, a $70 million loss in 2008, and a $210 million loss in 2009. Even a $112 million profit in 2010 was not enough to turn the company’s fortunes around.
From 2001 to 2012, Holden received over $150 million a year in subsidy from Australian government. The subsidy from 2007 was more than Holden’s capital investment of the same period. From 2004, Holden was only able to make a profit in 2010 and 2011.
In mid-2013, Holden sought a further $265 million, in addition to the $275 million the Federal, South Australian, and Victorian governments had combined to commit, to remain viable as a car manufacturer in Australia. The Australian reported that the car company was losing money on every vehicle it produced.
The election of the Coalition Government in 2013 signalled the beginning of the end for local automotive manufacturing. The Liberal-National parties, so willing to provide billions in subsidies for their fossil fuel donors, railed against providing even a fraction of that assistance for the Australian automotive industry, with then-Treasurer Joe Hockey openly goading General Motors to leave the country.
Australian automotive manufacturing ceased in October 2017, killing off thousands of skilled jobs. And now, after more than seven decades, one of the most iconically-Australian of all brands – up there with Vegemite – will soon no longer be sold, and Holden employees, dealers and their staff face an uncertain future.
It’s a sad end to a great Australian story.