Press Release: Holden Operations Unchanged By Parent Company Announcement In US

[JoeT]

Press Release: Holden Operations Unchanged By Parent Company Announcement In US

 Holden to be part of New GM;
 Holden not included in US filing under chapter 11;
 No direct impact on local design, engineering and manufacturing operations;
 Technology improvements to best-selling Commodore, introduction of second carline remain on track;
 No changes to Holden employees and supplier payment arrangements; and
 No changes to Holden dealer and warranty arrangements.

Holden will continue normal operations in Australia and New Zealand and does not expect changes to its business after General Motors announced it has taken court action in the US to launch a competitive New GM.

“Operations at Holden are unchanged in Australia and New Zealand and we expect it to remain that way,” Holden Chairman and Managing Director, Mark Reuss, said today.

“GM has clearly stated that all of its businesses in the Asia Pacific region – and that includes Holden – continue normal operations and are not directly impacted by this process in the US.

“No operations outside the US are included in the court filing or court supervised process.

“Holden is a subsidiary of GM but we are a corporate entity in our own right – an independent company under Australian law.

“Beyond that, GM has indicated that Holden will be an important part of the New GM.

“We intend to maintain our focus on Holden product programs and activities.

“That means technology improvements to our best selling Commodore range, launching the all-new Holden Cruze this month, and the introduction of our locally-built fuel efficient, four cylinder small car next year.

“We continue to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network.

“We don’t anticipate this decision will have any direct impact on Holden’s workforce, dealers, or suppliers.

“Holden customer warranties are not affected and we continue to deliver the sales and service experience that our customers expect.

“We wouldn’t normally issue statements to highlight nothing has changed, but we appreciate that customers will naturally ask questions about this sort of announcement from the US.”

Mr Reuss said Holden would remain informed of developments in the US, a process which had been determined to reinvent General Motors.

“The process being used in the US is unlike Australian and New Zealand law. It is a fast, court supervised process that permits the sale of selected assets to a new entity,” Mr Reuss said.

“Unlike court-controlled processes in many other countries, US chapter 11 allows GM to deal with the financial issues that have built up over many years and for New GM to emerge as a healthier business, better able to deal with the challenges of today and tomorrow.

“It does not mean ceasing to trade.”

Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM, with two distinct advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before.

GM has previously indicated it is negotiating with prospective buyers for the Saab and Hummer brands. GM is working closely with dealers, including those in Australia and New Zealand, to continue delivering vehicles and maintaining aftersales and servicing requirements.

GM Group Vice President and President of GM Asia Pacific, Nick Reilly, said: “We believe this step – which was taken with the support of the US Government – is the most efficient and effective means for New GM to emerge with substantially less debt and lower operating costs, and with our operations positioned for long-term success.”

Holden customers with queries about this announcement can contact the Holden Customer Assistance Centre on 1800 033 349.


Key Facts - Holden

 Holden employees more than 6000 people in Australia and New Zealand.
 Holden spends $500 million annually on employee wages.
 Last financial year Holden spent $420 million on research and development – more than any other private company in Australia.
 The Holden Commodore has been Australia’s best-selling car since 1996.
 Holden has produced more than 7 million vehicles since 1948.


Key Facts - GM What GM Corporation’s US filing is:

 An accelerated, court-supervised sale of GM’s strongest operations and brands to New GM, which is intended to be completed within about 60-90 days.
 The most efficient and effective means to achieve the substantially lower debt and operating costs necessary to align the operation for future success.
 Unlike court-controlled processes in many other countries, the US process being used by GM will allow it to continue trading and enable New GM to emerge as a leaner company with a stronger balance sheet.


What this US filing of GM Corporation is not:

 This is not liquidation or a discontinuation of operations by General Motors.
 This is not a proceeding similar to insolvency proceedings in Australia.
 This does not mean New GM is going out of business or intends to pull out of Asia Pacific or any other region.


Frequently Asked Questions

- Holden How is Holden affected by this filing?
Holden is not directly included in or impacted by the US court proceedings.

Does this mean Holden is going out of business?
No. None of GM’s operations outside of the US are included in the US court filings or court-supervised process, and these filings have no direct impact on GM’s plans and operations outside the US.

But doesn’t bankruptcy mean the end of a company?
Chapter 11 in the US is not like Australian law. It is a highly structured, court-controlled process that allows companies to continue trading while they reinvent their operations. Unlike the systems of many other countries, the US chapter 11 process is focussed on the preservation and reinvention of a company’s business. It does not mean ceasing to trade.

What happens to Holden once New GM emerges from chapter 11?
Holden will be an important part of the New GM. We will maintain our focus on product programs and activities. That means technology improvements to our best-selling Commodore range, launching the all-new Holden Cruze and the introduction of our locally-built fuel efficient, four-cylinder small car next year.

What happens to Holden’s operations during GM’s chapter 11 process?
Holden continues to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network. We don’t anticipate this US action will have any direct impact on our local workforce, dealers or Holden suppliers.

Will there be any impact on your workforce?
We don’t anticipate this decision will have any direct impact on our workforce, dealers or Holden’s suppliers. Employee pay and benefits will continue. Any decisions related to Holden’s staff would be made by Holden, not as the result of any overseas action.

Are your dealers affected?
Holden dealers, warranty and customer support operations are unaffected by the US filing.

Will financial institutions continue to provide credit to Holden dealers to finance sales in Australia and New Zealand?
We do not foresee any interruption with regards to dealer or retail financing.

What happens to Holden customer warranties?
Holden warranties are not affected by this announcement.

Does GM’s announcement put a stop to any Holden projects?
No. We continue our development work on fuel-saving technologies and future models. Work has already commenced preparing our Elizabeth plant to build our all-new, fuel-efficient, four-cylinder small car. The project remains on track with production to commence in the third quarter of 2010. Our funding and capital for that project is locked in.

We have also just launched the new Cruze and continue developing future models of Australia’s top-selling car, the Commodore.

Will Holden’s suppliers get paid as a result of this decision?
Holden supplier payments remain unchanged.

If Holden is not directly impacted by this decision, why are you issuing statements about it?
We wouldn’t normally issue statements to highlight that nothing has changed, but we appreciate that customers will naturally ask questions about this sort of action in the US.

Do Holden operations have access to its technology patents even though GM had filed for chapter 11?
Despite the filing, GM Asia Pacific – and that includes Holden - will have continued access not only to the intellectual property developed in AP, but also to the intellectual property developed elsewhere in the new global GM organisation.

What will happen to Holden’s management team? Will it remain in place?
We do not foresee any changes to Holden’s management.


Frequently Asked Questions – General Motors

What is chapter 11?
Chapter 11 refers to the provisions of chapter 11 of the US Bankruptcy Code that allow a company to pursue a court-supervised process to address its financial challenges while continuing to trade. Unlike the laws in many other countries, the chapter 11 process is focused on the preservation and reinvention of businesses.

What is a 363 filing?
GM is using section 363 to transfer assets to New GM and enable it to quickly emerge from chapter 11 as a leaner, stronger company. It is a commonly used and proven provision of the US Bankruptcy Code.

What does GM hope to accomplish via the 363 sale?
‘363’ is a proven process that will allow New GM to emerge a leaner business with a significantly stronger balance sheet, a world-class product lineup, a global footprint and industry leading expertise and technology. Many major US companies have successfully used the 363 process.

Why did GM file for chapter 11?
In the US GM reached important agreements with key stakeholders that will significantly reduce its debt and strengthen its capital structure, and help accelerate its reinvention. To implement these vital agreements, GM is using an expedited court supervised process under chapter 11.

With the support of the US Government, the UAW, other key stakeholders and with safeguards for customers and suppliers, the section 363 process will enable GM to accelerate the sale of its strongest brands and operations to the New GM which will emerge a lean, profitable, self-sustaining company.

Does this mean GM is going out of business?
No. GM is reinventing its business, not going out of business. Its operations will continue as normal during the chapter 11 process, which should take about 60-90 days.

Does this filing impact GM’s operations/subsidiaries outside of the US?
GM’s subsidiaries outside the US are not included in the filing. There are no legal changes to the way GM conducts business in Asia Pacific, including Holden, as GM’s operating entities in AP are not US based companies.

Why did GM choose the 363 process over a pre-packaged chapter 11?
The US Government and GM believe the tools made available through the 363 process will enable GM to accelerate its rebuilding process.

‘363’ is a process that will allow New GM to emerge as a leaner company with a significantly stronger balance sheet, a world-class product lineup, a global footprint and industry leading expertise and technology. Section 363 allows a company to sell assets quickly in an orderly fashion, and GM will be seeking the Court's approval to complete the sale so as to ensure that New GM has a stronger balance sheet. The assets sold do not remain part of the original company and are no longer included in the chapter 11 filing.

Many major US companies have successfully restructured using the 363 process, including:
– Continental Airlines
– Delta Air Lines
– Federated Department Stores (parent of Bloomingdale’s and Macy’s)
– Kmart
– Toys R’ Us

[mikmak]

I'm still not sure. What does this mean for Holden?

[oklapike]

No real surprise to me, but it is nice to see it confirmed. After all, GMNA needs Holden if there's ever going to be a future chance of performance RWD vehicles here again.

[BurninrubberGT]

thank god

[commodore88]

That's good news for Holden, something they've been needing.

[kenman923]

So Holden stays around, but Pontiac won't. Somehow, I think that Pontiac will be back by popular demand.

[Joe in T.O.]

Originally Posted by kenman923

So Holden stays around, but Pontiac won't. Somehow, I think that Pontiac will be back by popular demand.

That would be great if Pontiac came back.

[Dirk Wiggler]

Thank God Holden remains.

[XP300]

Good News!

[Z28x]

"Holden to be part of New GM"

This is awesome news!!!!!

[andyx181x]

This is great news! They should leep pontiac still and import more holdens as pontiacs, since holden depends a lot of revenue from importing.

[teamfbody]

now all we gotta do is save PONTIAC

[mmciau]

Originally Posted by mikmak

I'm still not sure. What does this mean for Holden?

Possibly it could mean 'sink or swim' on your own. But i think it is a fair measure of the status that the "Holden Family" has within old and future GMNA.

I get the distinct feeling that Mark Reuss has all the 'where with all' to steer Holden onward and up to greater operations domestically and throughout new GM.

I'm almost willing to compare him with one of Holden's greater leaders from the past - Peter Hanenberger.

I'm confident it's GO


Mike

[chinamonty]

I am glad that they have explained what it means in terms that people have a hope of understanding at least conceptually.
I hear they are going to have press conference this morning so we should hear more. I guess the news will filter down the supply chain fairly quickly.
I am relieved that it is the outcome I was expecting.

[spidge]

Originally Posted by oklapike

No real surprise to me, but it is nice to see it confirmed. After all, GMNA needs Holden if there's ever going to be a future chance of performance RWD vehicles here again.

Yes, because, IMO, FWD sucks on larger cars with larger-displacement engines. It is best suited for subcompact/compact economy cars, and sport compacts.

Glad Holden is good, for now at least, and it would be great to see their future products here in North America, badged as Chevrolets, Buicks, or whatever.