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How Holden conned Australia — and we bought it every time

Holden continually got money out of the Australian government, but there was never a way to save its Australian operations. In Daily journalist Kevin Naughton reveals the con job.

It’s been one long con — and the Holden saga is still throwing up a dust cloud as we spin our wheels over the cultural shock of the carmaker’s exit.

Perspective on the issue is forming. Firstly, political commitment to subsidising car production has been a spectacular failure. Secondly, the “Aussie icon” imagery is a mirage. And thirdly, the coming shockwaves from job losses in the next four years is a gross over-statement.

Let’s start with the third perspective. In 2010 Holden said its move to a new small car platform to run alongside Commodore production would stem the slow erosion of jobs at Holden. In 2009, Holden employed more than 3200 people at its Elizabeth plant in Adelaide. It now employs 1670, so the level of job losses at Holden due in the progressive closure in the next four years has actually occurred in the previous four years. While there has been an increase in unemployment in South Australia in the last two years, most of those Holden lost jobs appear to have been absorbed into the economy with few micro-economic shock waves.

The second perspective is the cultural one. The Detroit-based owners of Holden have been playing the Aussie imagery for years, and much of it has been based on similar American nationalism campaigns. As Holden boss Mike Devereux said in 2010, Holden’s Aussie-ness is just a bit of ol’ American apple pie. When he sat down for a chat with local media, he asked about the culinary notion of a party pie (which the PR staff had laid out as Holden’s thrifty lunch item). He was proudly told by one of the motoring writers that the pie, like the Holden, was part of Australian culture.

The jingle was football, meat pies, kangaroos and Holden cars,” said the proud Aussie hack. Devereux recognised the jingle immediately. “Was that your version of baseball, hot dogs, apple pie and Chevrolet?” he asked.

It turned out the Aussie Holden jingle imprinted on our psyche was an old ad for the General Motors Chevrolet; it was conceived in 1974 and a couple of years later, re-written for use Down Under …

And finally, let’s review the perspective of the political promise and miracle subsidies. Most journos who have been around for more than a decade can reel off the succession of “we’ve signed the deal and saved thousands of jobs — it’s all good from here” media events featuring ministers, auto executives and smiling workers.

There was the day they got the workers at Mitsubishi to throw their hats in the air in joy at the tens of millions handed over to save the Tonsley plant. It had closed before the hats landed. The most recent was the March 2012 effort at Holden, where then-federal industry minister Kim Carr joined with Devereux and SA Premier Jay Weatherill for another “we’re saved” event. The money was never paid, and Holden actually sacked a few hundred workers shortly after.

In 2009 then-state treasurer Kevin Foley raved about the prospects of selling thousands of Holden Caprice V-8s to US police forces. Devereux cleared that up in 2010: “It was never going to happen last year; tenders don’t open until October this year.”

The mass-Caprice export thing never happened — and a quick look at how the US was planning to move out of its financial mire made it clear they wouldn’t be paying people in Australia to make US cop cars en masse. Carr (again) had also used the Caprice cop car story when he justified government assistance to the industry in October 2009. “The tender for the police car is going very, very well,” Carr told media at the time.

One of the biggest spins of the period was that of former South Australian premier Mike Rann in August 2009. He said he was “confident GM would agree to manufacture an electric version of the Holden small car at its Elizabeth plant”.

His confidence was based on a decision in December 2008 by the Rudd and Rann governments for a $179 million co-investment agreement for Holden to build an all-new, fuel-efficient, low-emission small car in Australia, “supporting up to 1200 jobs immediately”. Production of the Cruze started a few years later, but the jobs never came, and the electric version remained a fantasy. In the years since that $179 million deal, the subsidies got bigger, and the workforce kept getting smaller.

Holden’s asking price to stick around kept increasing.

The new federal government had made it clear that it didn’t accept the premise that a company that had been steadily reducing its workforce while increasing its demands for subsidies was worth the money. Holden then did what it has been doing for four years and announced a four phase-out of the remaining 1670 jobs.

In a suitable twist to last week’s drama, Holden insiders told media that the Holden brand would eventually be dumped in favour of the Chevrolet. And so it was that the “baseball, hot dogs, apple pie and Chevrolet” conversion to “football, meat pies, kangaroos and Holden cars” was reversed.

Finally, it’s worth recalling this statement from Devereux on that day in June 2010: “We are in the business of designing, building and selling the world’s best vehicles, and Adelaide is one of only seven locations where we do all of those things. Holden is here to stay.”

No, you don’t, and no, you’re not. The cultural con will soon be gone.

*This article was first published at In Daily

7
  • 1
    dazza
    Posted Friday, 20 December 2013 at 4:39 pm | Permalink

    Kim Carr argues that for every dollar of government money invested, there’s an eighteen dollar benefit to Australia?

  • 2
    smarttdj
    Posted Friday, 20 December 2013 at 6:50 pm | Permalink

    South Africa also adopted the jingle - Braaivleis, Rugby, Sunny Skies, & Chevrolet.

    http://www.youtube.com/watch?v=x1wvQ7ERXhY

  • 3
    Dulong Ttil
    Posted Friday, 20 December 2013 at 8:39 pm | Permalink

    An appropriate action for the Australian government to contemplate is Japan’s monetary easing policy.
    Since the YEN is much cheaper now than before, the Japanese export and tourism businesses now become much more active again. This is exactly what we need for Australia.
    The Australian government ought to consider adopting similar monetary easing policy to drive the AUD downwards appropriately. So, our Export competitiveness can be strengthened again, our economy can be improved and our people can keep their jobs.
    The lower AUD currency can also help improving our Car Exports to other countries and save our car manufacturing industry like Holden.
    Japan just announced the other day another 60 Billion economy Stimulus plan…………So, why cannot Australia?
    Another thought is a linked currency policy for constantly linking AUD:USD at e.g. A$1 : 80 US cents. The well-known success case is the linked currency between HKD:USD in the past 25 years or more. This link has more detailed discussion: http://en.wikipedia.org/wiki/Linked_exchange_rate .
    Some other success cases of linked currencies can be found on this link: http://ec.europa.eu/economy_finance/euro/world/other_currencies/index_en.htm

  • 4
    Rubio Diego
    Posted Saturday, 21 December 2013 at 11:09 am | Permalink

    It’s too late now but we should have insisted on GM shares in exchange for the financial support. The US government did this to stave off bankruptcy and recently was paid back the $59 billion it was owed.

  • 5
    gapot
    Posted Monday, 23 December 2013 at 2:47 pm | Permalink

    Ever time the HOLDEN employees asked fore more money they got it and HOLDEN went straight to the federal government and got an increase in government funding. So the wages of these employees were paid by the government. Holden couldn’t get cheaper labour than that. Maybe QANTAS could get the same deal to compete with airlines from the UAE

  • 6
    Dulong Ttil
    Posted Tuesday, 31 December 2013 at 1:09 pm | Permalink

    Japan has adopted an assertive Monetary Easing Policy, which drives the YEN downwards successfully. The immediate result shows that their Export and Tourism industries have picked up swiftly. Japan is now enjoying healthy export growth and has much more tourists visiting Japan.

    With the sound and robust stimulation by Japan’s Monetary Easing Policy (which in fact mainly injecting more printed notes into the market by their Central Bank), the Nikkei has soared from 10,398 to 16,291 just in 2013. Nikkei marks its best performance in forty years, and also the top performer among Asian markets in 2013. Analysts name this “Nikkei Ends Year on a High in Quiet Asia”. Can we see the power of an aggressive Monetary Easing Policy now?
    Australia can consider this as a viable option to improve our economy outlook and, our export effectiveness can be enriched instantaneously.

    A lower $A can help to improve our Car Export opportunities and save the industry, like Holden.

    Another though is to engage a linked currency with USD, (e.g. A$1:US$0.80), which can give overseas investors good confidence in our economy stability.

  • 7
    green-orange
    Posted Thursday, 9 January 2014 at 1:21 pm | Permalink

    Toyota has just announced the Corolla will be imported from Thailand rather than Japan. This follows Nissan and Mitsubishi doing the same for all their vehicles. Mazda and Suzuki are on the ropes.

    All the car manufacturers are aggressively shifting production to the lowest cost locations. The F-150 plants in USA that “make” 1.5 million vehicles, engines and transmissions a year are to employ just 7500 workers.

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