Holden could be sold as GM goes into 'Death Spiral'

[Ming]

Holden could be sold as GM goes into 'death spiral'
Robert Wilson
March 25, 2006
The Weekend Australian



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.

Source, Article Continues: http://www.theaustralian.news.com.au...%5E643,00.html

[Ming]

For now I'm going to ignore this as more doom & gloom, but it is noteworthy that this discussion is going on in Australia.

Personally I think Holden is becoming ever more integrated into a single unit with GMDaewoo, with many of its ex-employees in positions of power in GMDAT and model sharing between the two. And the engines and transmissions Holden uses in its most popular Commodore lineup are all GM's, I believe.

I don't see how Holden could be expected to be sold to some Chinese car company and survive on its own without at least a major continuing "alliance" with GM and GMDaewoo. Suzuki has GM product tie-ups, but if forced to go it alone suddenly have plenty of their own non-GM-dependent platforms and engines used worldwide.

It would either be that or Holden would be entirely revamped, almost to the point of being unrecognizeable.

[2648562]

Strange. I know they weren't updating Holdens like they should've been, but I thought they were doing well. I would hate to see Australia's auto industry destroyed. They're good people and they deserve better.

[SRX7697]

selling holden is worse than selling Hummer or SAAB.

Holden is where the RWD lies.

[Gorf]

wait, GM wants to sell Holden because they're too profitable?

[GM-10]

Holden is quite integrated...chances are very low for a sale.

[gerardo_zg]

Originally Posted by GM-10

Holden is quite integrated...chances are very low for a sale.

I hope you're right, GM can't let Holden go away.

[TKR]

This is the kind of statement that makes me distrust journalists.
The person responsible obviously has no idea what is going on around the world and has been looking at too many Toyota websites.

[MCGARRETT]

BS

There is not one single indicator in the article that points to any proof or rummors that GM is going to sell Holden. This was simply done to increase readership for some Australian magazine or paper, I could write any article, that I want, 99.9999999999999% chance of something like it happening, for example, it would be just as easy to write an article to the effect of...

"Chevrolet could be sold" or "Cadillac could be sold", anything could be sold of, and the sun may not rise tommorow, but both are pretty remote.

[mkwelbornjr]

I thought Holden just sold the same stuff as Opel and Vauxhall with a few RWD offerings.

[give_it_all_]

They won't sell it. It makes money. And they say the sale of the GMAC arm was desperation. But they started to sell it 5 years ago, when they made lots and lots of money. No desperation there.
Media just making money off of GM again......

[AndrewGS]

I don't think so.

[DuSpinnst]

Holden uses too many GMDAT and GM parts to be sold, they could not survive alone.

[Stéphane Dumas]

And besides the Chinese, which car maker is interested to Holden?
-Toyota? mhhh, why they could buy Holden? They have a solid foot in Australia
-Renault: Ghosn might be tempted to have a more solid foot in southeast Asia
-DCX? Zetsche sold DCX shares of Mitsubishi and now put a consolidation of DCX
-Honda?
-Peugeot-Citroen?
-Suzuki?
-VW?
-Fiat?

[Swahili]

I don't understand the logic behind this either. If GM is losing money, why sell off something that makes money? It still seems to be more of a case of targeting areas which are losing you money, and doing something about it to turn it around.

I thought GM was making progress in terms of getting back on track but I must have thought wrong. 2006 is going to be an important year for the General.