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Holden Closure - Money and Investing with Andrew Baxter

GENERAL MOTORS AXES HOLDEN IN AUSTRALIA

Holden Closure: After their lowest monthly sales ever since their opening in 1948, General Motors has culled the Holden operation in Australia for good. What this holds for the Australian economy may be worrisome.

164 years of history, gone.

General Motors, Holden’s parent company, established iconic Aussie car brand way back in 1948 – this particular manufacturer over 164 years.

The fact, not only a sign of times with our ever-growing global economy but also highlights how uncompetitive has been.

What went wrong

To be plain honest, Holden lost its relevance within the minds of Australian consumers. Holden’s go to marquee vehicle the Commodore sits in the 5th least popular car category in Australia, classified as a ‘large car’. Little to Holden’s knowledge, marketing idea to the modern Aussie consumer needed to include SUV’s and small cars which have ten times sales large cars do in recent years.

In Addition, Aside from losing their relevance, Holden had poor cost management. To the surprise of many, the average salary of a production line worker at Holden sat at $80k – $100k. A whopping amount of remuneration for their somewhat 600 odd employees – most unskilled.

The Aussie economy – a matter of cutting our own lunch.

One thing we can learn from the almighty leadership of US President Donald Trump is the mandate to buy America first. In order to avoid tariffs and support their own economy, Americans manufacture in the US they also buy goods. Unfortunately, our own demise as host Andrew Baxter describes Aussies LOVE to cut our own lunch and buy foreign products.

Moreover, Not only does this reduce spending in our home economy, but also adds pressure to the various manufacturers operating here.

The Aussie government is a part of the problem

Let’s make this clear – this isn’t a government bashing session, that would be too easy. Nonetheless it is important to know that in 2013, $2.13b of Aussie tax-payer dollars was funnelled into Holden to keep the brand afloat under the Abbott government. Fast forward to December 2019 and here we see the Morrison government has replaced all of their Holden government cars with Toyotas and BMW’s. A contract once previously held by your beloved Holden Capris now belongs to the Japanese and the German’s. Like everyone else who never purchased a Holden car – the Aussie government is a part of the problem.

 

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