Holden Production Moved To Asia? Is Possible Says Lutz

[JoeT]

Football, Meat Pies, But Cars From Asia

Joshua Dowling
01 March 2006
www.drive.com.au

A Commodore made in Korea? It's possible, according to General Motors' head of global product development, Bob Lutz, who oversees Holden's Australian operations from head office in Detroit.

Speaking candidly at a preview to the Geneva motor show yesterday, Mr Lutz expressed grave concerns for the viability of the Australian car manufacturing industry if import tariffs remained low and the Australian dollar remained strong.

GM owns Korean brand Daewoo and in October 2002 Holden became the biggest stakeholder in the company, buying a 42 per cent share.

Holden is already increasing the number of small and medium cars it imports from Korea; the new Barina is a rebadged Daewoo Kalos and the Holden Viva is a Daewoo Lacetti.

By the middle of this year Holden will also begin selling a Korean-made four-wheel-drive to compete with the Ford Territory after the locally made Holden Adventra (an off-road version of the Commodore wagon) failed to meet sales expectations.

While Mr Lutz stressed that Holden had no plans to close its vehicle assembly factory in Adelaide (the same city in which Mitsubishi is struggling to survive) he said the Australian industry was "at risk" of being uncompetitive with its nearby Asian neighbours, which have lower labour costs.

"I tell you the Australian manufacturing industry is in a difficult situation right now," Mr Lutz told the Herald. "If the Government doesn't do something about it or the Australian dollar doesn't weaken, then I'm not sure what's going to happen. The Australian market really is at risk."

He said that while there were no plans at this stage to build the Commodore in Korea "it is possible and it is feasible" to do so.

He said it was more likely that production of the Commodore - Australia's best selling car for the past 12 years - would remain in Australia for now but that other locally made Holdens which sell in relatively small numbers domestically but which are strong sellers in other countries (such as the Statesman luxury sedan), could be assembled in Korea.

"The new Statesman is going to be exported from Australia to China, Korea and the Middle East," Mr Lutz said. "If the export volume is strong, and it makes sense to build the Statesman at [GM's Korean division], then why not do it?"

Local car makers Holden, Ford, Toyota and Mitsubishi are struggling against the weight of imports. In 2001 imported vehicles accounted for 58.9 per cent of all new-car sales in Australia. In January 2006, imported vehicles accounted for 81.1 per cent of all new-car sales.

Japan is the single biggest source of imported vehicles (41.1 per cent in January 2006, according to the Federal Chamber of Automotive Industries) but Korean imports are growing, from 7.6 per cent of new-car sales in January 2005 to 9.9 per cent in January 2006.

[DuSpinnst]

Wow, over 81% imported. I feel bad for Australian Auto Workers.

[paul3230]

Originally Posted by DuSpinnst

Wow, over 81% imported. I feel bad for Australian Auto Workers.

And if our own government doesn't do something then we could see something like that here as well

[macphisto]

This is why import tariffs are so important. Free trade or less restrictive trade favor nations that devalue their currency.

But don't worry, eventually those eastern nations will have the money and we'll get to be the poor nation that lowers its currency to lure business. That is, if they're stupid enough to allow what we're stupid enough to allow.

The problem is the shortsighted nature of business. It's all about profits now, but screw the future; it's someone else's problem.

The Australian government needs to increase the import tariffs and give Holden some more advantages as a native builder; just as the US gov't needs to nail imports with tariffs and begin tearing up some of the free trade agreements (NAFTA and CAFTA - throw them out, please!).

[Martino_z]

This is why the austrlaian government should be tortured and killed. This has been one of my more vocal topics over the years. Australia should act like japan and raise the tariffs hugely to kill the imports, but these limp **************** polititions are too self absorbed to do anything for the australian people. It seems with all these rediculous free trade agreements with asia the aussie goverment has come down with yellow fever and wants to make a big profit and spit on australian people. Bob lutz is a piece of crap for even considering this. GM can say goodbye to me if commodore production moves offshore, "hey blue oval looks like im headed your way". Thankyou for protecting the interests of our nation you sellouts im gonna write a letter to the prime minister right now and ask him why he allows this to go on.

[rueben44]

Yea we see our country walking into it eyes wide open and to hell with it all. Oh well!

[2648562]

Lutz's comment probably lost them another 9% in market share.

Hey Bob: Pull that here your company tanks. If you're even thinking about it you might as well just get the heck out of North America.

[mbukukanyau]

Originally Posted by paul3230

And if our own government doesn't do something then we could see something like that here as well

Government? UAW should help the companies, by taking stock options instead of guaranteed retirements. And kill Job banks for crying out loud! how you feed your children with money you did not work for? Shift the retirement burden from liability to equity on the Balance Sheet...
Think of what would happen to GM stock if they did that. Before you know it, you would have UAW millionaires

[asim]

Uh oh...the Aussies are going to be mad...

First GM "insults" them with the Lacetti and the Kalos...now this.

[powervette]

Originally Posted by asim

Uh oh...the Aussies are going to be mad...

First GM "insults" them with the Lacetti and the Kalos...now this.

Do You feel as an American isulted with the Aveo?

[DuSpinnst]

Originally Posted by powervette

Do You feel as an American isulted with the Aveo?

I don't, but if GM had only one brand here and they replaced half the line with imports I'd be pretty upset.

[Bvonscott]

Originally Posted by macphisto

This is why import tariffs are so important. Free trade or less restrictive trade favor nations that devalue their currency.

But don't worry, eventually those eastern nations will have the money and we'll get to be the poor nation that lowers its currency to lure business. That is, if they're stupid enough to allow what we're stupid enough to allow.

The problem is the shortsighted nature of business. It's all about profits now, but screw the future; it's someone else's problem.

The Australian government needs to increase the import tariffs and give Holden some more advantages as a native builder; just as the US gov't needs to nail imports with tariffs and begin tearing up some of the free trade agreements (NAFTA and CAFTA - throw them out, please!).

EXACTLY! The import bias of our country must be stopped. Can't wait till bush leaves and we can get "car guy" for a president.

[Stormin]

Originally Posted by DuSpinnst

I don't, but if GM had only one brand here and they replaced half the line with imports I'd be pretty upset.

But Holden have for many years imported everything not based on the Commodore platform. The only difference is the source has changed, from Europe to Korea. And Holden has far more input into those than the previous Euro models.

[DuSpinnst]

Originally Posted by Stormin

But Holden have for many years imported everything not based on the Commodore platform. The only difference is the source has changed, from Europe to Korea. And Holden has far more input into those than the previous Euro models.

Well that's still crappy.

[kenman923]

Building Holdens in Korea. Well, then car companies would work in pairs: Hyundai/Kia and Daewoo/Holden.