Congratulations Holden

It looks like they have cracked the US market such they are becoming a regular exporter into it. The Chicago Motor Show debuted the VE Commodore as the Pontiac G8. The photo below shows Bob Lutz introducing the car to the American motor press.

The pre-show excitement was quite high amongst US motoring enthusiasts. One of the major concerns was that the Pontiac designers would muck up the VE Commodore nose like they did the Monaro’s when it came to the US. So there was almost exhilaration when Lutz gave a sneak preview of the G8’s nose on a news show.

Then there was the leaking of the full size shape of the car. The hall the Chicago Motor Show was housed in had a webcam which was turned on while they were building all the stages prior to the show. The camera was pointed at the Pontiac area. Enthusiasts watched the webcam diligently, and sure enough, they caught a video test of the Pontiac G8 introduction. That was it – the photos were splashed widely across the internet.

The export of the VE Commodore into the US market is a large jump from the old days of establishing Holden as a GM subsidiary, the nationalisation of basket cases like the Leyland Sydney factory or policies such as the Button Plan. Holden has managed to transform itself into a globalisation era company that does world class engineering, such as the Zeta platform, and makes glocalised products which can be exported to the Middle East, South America, UK and North America while still satisfying the domestic market.

It is curious how they got there. The demands of the Australian market meant that a large body rear wheel drive platform was a market necessity. In contrast, the US tried to lower costs by moving entirely to a front wheel drive platform. This was probably helped by the snow and slush road conditions that the north eastern United State faces – and Australia does not. It also meant that when the US decided it needed a rear wheel drive platform, Holden was the only one engineering a solution.

The other important aspect is that General Motors under Bob Lutz have embraced globalisation. Meaning that engineering and production at Holden in Australia and Opel in Germany are being brought into the US market which used to be excessively parochial. A quality product now means increasing export opportunities for those subsidiaries. Great news for Holden who has many variants of the Commodore I am sure they would love to tempt the US market and GM upper-management with.

It is interesting to compare GM’s response with Ford’s. The latter has not embraced globalisation and consequently superb products like Australia’s Ford Falcon, and Europe’s Ford Mondeo and Focus are not making it to the US market. The US motoring press is clamouring for these cars to be on US roads but to no avail. By the same token, globalisation goes both ways, and hopefully Australia sees more of the products the US does well: such as trucks, sports saloons and sports cars rather than just their engines and transmissions.

It is good to see Holden transform itself into a high quality globalised engineering and manufacturing operation that has been taking advantage of modern economic opportunities. As a former 1962 EJ Holden owner I can more than appreciate Holden’s engineering, quality and product advances.

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8 Responses to Congratulations Holden

  1. David Rubie says:

    Another false dawn for Australian motoring exports? Lets hope GM have finally learned how to hedge currencies.

    Ford actually tried much harder than GM to globalise – at least initially. They saw Mazda as their small car provider for the US and asia-pacific regions. Products like the Ford Capri (the little convertible) built out of cast-off Mazda bits failed to make any sort of a dent in the US market despite an enormous hype campaign built around it. The last lot of Holdens exported to the US (the Monaro) were too expensive. GM have been content trickling specialists models to the UK or re-badged commodores to the middle east and Africa (there is nothing quite so strange as seeing the familiar silhouette of a Commodore prowling the streets of Johannesburg with Chevy Lumina badges on it).

    Also, lets not be too harsh about the Button plan. Holden and Ford would never have started building world class cars without the combination of rationalising of factories and models and dropping tarriffs. They both would have been content on building rubbish euro adaptations (the VB-VL commodore) or tarted up 1960’s dross (the XD-XF Falcon) or assembling CKD kits of outdated Japanese cars behind that massive tarriff wall. The EA Falcon, once sorted, was a massive advance and wouldn’t have happened without the Button plan. The massive success of those Falcons is why the Commodore is now so good.

  2. cam says:

    The Capri wasn’t globalisation. The Commodore (Pontiac) and Astra (Saturn) are best sellers in their respective markets. The Capri was made for the US market and used cheaper Australian labor and factories. Now we have China, Mexico and Alabama for that.

    The Monaro wasn’t too expensive as the GTO in the US. It suffered from Cadillac making the smooth ‘sucked lozenge’ design obsolete. Since the CTS US design has been ‘crinkly’ which the VE fits in with. Didnt help that the Pontiac designers put a frumpy nose on the GTO. Wasn’t rubbishing the Button place, merely saying we are a long way from those policies.

  3. Thx for the post Cam. Interesting to hear it from the US.

    I thought they were safe here, but was very taken aback to be invited with other consultants to the industry to a briefing by the new Aust CEO who said that he had us there to tell us that Holden was in it for the long haul. Now I would expect that from the CEO of Mitsubishi and to mean the exact opposite of what it said, but was surprised that the Holden CEO even raised it.

    I think they’re pretty fazed by the value of the currency and it makes it very hard to export. But they’re doing it, and it looks like Ford may be forced to follow in their wake. Their dilemma (and Ford’s) is that they can’t really supply the large rear wheel segment of the Australian market with an imported car. So they’re at last adopting the posture that makes sense which is to use it as a base from which to export specialist rear wheel cars.

    One exciting thing is also that we’re returning to the status we had in the early 1970s as the Asia Pacific headquarters for GM. Holden runs various GM subsidiaries in Asia and is very well regarded in the group – one of the few who’ve made profits when so many other divisions have been losing their shirt.

    David, the EA series was well and truly committed well before the Button Plan was introduced.

  4. David Rubie says:

    Capri *was* globalisation (or at least Ford’s stumbling efforts towards it). Like the Merkur XR4Ti (built in Germany with Brazilian engines and sold in the US), drivetrain from Japan, built here with output going to the US. I don’t know what the definition of globalised is supposed to be (do bits of the vehicle have to come from every continent?).

    EA falcon / button plan. Ford were seriously contemplating a modified Mazda 626 amongst other ideas to replace the Blackwood falcons. It’s easy to forget, but in the 1980’s the GM plan of tarting up Opels was looking like the future. Ford’s HQ were never really convinced that the massive investment involved in the EA was ever going to be justified until they were mollified by the feds in the 1980’s. Rightly or wrongly, Button and the vagaries of his plan (and the end of the fuel crisis) extended motor vehicle manufacturing here by two decades.

    Car nut that I am, I’m still not convinced we should even be building cars here any more. Chrysler and Mitsubishi’s ever extended palm requiring grease is a pox on our industrial development.

  5. David, Ford was contemplating (I doubt that seriously) various alternatives to a local replacement for Blackwood, but the decision was well and truly made to proceed with EA well before the Button Plan. The Button Plan almost certainly had some impact on the Capri project – and in anticipation of it Ford Aust bid (unsuccessfully) to send EA Fairlanes based cars to the US, but the EA key had been well and truly turned by mid 1984 – when the Button Plan was announced.

    EA was, in my humble opinion a very very appealing piece of design – I remember thinking when I saw it “If this was a BMW, everyone would be saying how beautiful it was”. As it was people more or less took it for granted it being a mass marketed car and all – and Australian to boot. Ditto the next version of the VX Commodore. Many people don’t realise how much of the mystique of a car is in its marketing and price and volume – something the Europeans were onto right from the start.

  6. David Rubie says:

    EA was, in my humble opinion a very very appealing piece of design – I remember thinking when I saw it

  7. cam says:

    Nicholsa, who said that he had us there to tell us that Holden was in it for the long haul.

    Interesting. There has been lots of conflicting rumours circulating about the future of Holden’s exporting to the US. There is supposed to be a Canadian plant being built that will make the zeta based cars including the G8, Impala, Camaro and possibly some Buick. Then again one of the Holden execs said Holden would be exporting into the US for the life of the zeta platform IIRC. Another rumour is that Holden will do the engineering for a smaller RWD platform about the recent Torana showcar size.

    David, Capri *was* globalisation

    It was a top down decision, “market x needs product y where is the cheapest place we can build it?” whereas the import of the Commodore and Astra to the US are examples of established cars in a domestic market which are high quality and fill a hole in the US market – ie bottom up. GM had to go through a cultural change though IMO.

  8. Yes Cam, the strength and weakness of our position is that we can get a contract to supply 50,000 units for a few years – usually for the life of the car line – but then lose it to another business unit in the empire.

    It wouldn’t work quite that way if we were building our own brand. But that’s very unlikely to happen. But I doubt we have anything to worry about in the economics. For as long as we have serious capacity in Australia – and all but Mitsubishi are still relatively safe with massive commodity prices inflating our dollar – then we’ll export some reasonable fraction of our output – at least to regional markets and probably the Middle East. And we’ll pick up the odd contract from developed markets.

    We exported Falcons and Holdens to Europe in the 1970s (just a few thousand a year., but had we not blown it with the local content plans we may have grown that market to a few tens of thousands).

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