The New Daily

Belgian bid for Holden scrapped

Christopher Pyne says he was surprised at Punch Corporation’s decision to pull out of the bid.

Production of the Holden Cruze will cease in October. Photo: Getty

The left-field bid by a Belgian entrepreneur to keep open the Holden car assembly plant in Adelaide has fizzled.

General Motors, the US parent of GM Holden, said that GM and Guido Dumarey’s Punch Corporation had completed a detailed global evaluation of a proposal to continue manufacturing vehicles at Holden’s Elizabeth plant in South Australia.

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“Both parties concluded that a viable business model was not possible for this case,” said GM International spokesman, George Svigos.

“Therefore the proposal will not be taken forward.”

Belgian automotive entrepreneur Guido Dumarey. Photo: Getty

Belgian automotive entrepreneur Guido Dumarey. Photo: Getty

GM said the discussions had been governed by a non-disclosure agreement, and neither party was able to discuss details of the proposal, nor the assessment.

“The challenges to domestic automotive manufacturing in Australia – lack of scale, high production costs, supply base contraction and increasing market fragmentation – persist and cannot be overcome for this business case.”

“In particular, the wind down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable.”

Industry Minister Christopher Pyne is vowing to get to the bottom of why Dumarey decided not to take over the plant.

Mr Pyne says he was surprised General Motors and Guido Dumarey’s Punch Corporation decided not to pursue the proposal, because it did not match what they had told him.

“(South Australian Premier) Jay Weatherill and I will want get to the bottom of why they prematurely decided not to pursue that option,” he told Sky News on Saturday.

GM said Punch Corporation, and other interested parties could participate in the sale process of Holden’s Elizabeth plant and the assets after GM ceased local manufacturing at the end of 2017.

The proposal by Mr Dumarey won support from SA Senator Nick Xenophon, along with some interest from the SA and Federal governments.

The announcement came as Holden announced on Friday that it cut would hundreds of production jobs at Elizabeth in early October when it stopped local production of the four-cylinder Cruze.

Holden managing director and chairman, Mark Bernhard, said the end of local Cruze production was always part of Holden’s gradual scaling-down of production in Australia and “recalibrating” its model portfolio.

“There is absolutely no change to our plan to build Commodore until the end of 2017,” Mr Bernhard said.

By October, nearly 125,000 Cruze models will have been made in Australia over five-and-a-half years. Its place in the Holden model lineup will be taken by a European-designed and engineered Asta, which will be manufactured in the UK.

  • Mel

    I hope the AMWU’s happy. They pushed for higher wages for people to watch an assembly line and no we have no manufacturing in Australia. I know people getting over $100k pa to supervise lines.

  • Gympie

    Is Pyne suggesting there has been political skullduggery involving GM in election year?
    Perish the thought.

  • Gympie

    If wage rates were set by the market, free of government busybodying, we’d all be better off, and the dollar might be worth something.
    Another big reason for the demise is the 8 weeks entitlement for every year of service for employees.
    Who in their right mind would buy into that?

  • fair_for_all

    Its a hard truth that the cost of Australia’s excellent working conditions are one reason most companies prefer to manufacture elsewhere in the world.
    Standards of production are not important to big business anymore (if they ever were), a sweatshop style production line can churn out “good enough” and the added volumes they produce & sell cheaply cover the cost of the lawsuits generated by sub-standard products.
    We may not like it but there is nothing we will do about it.
    Political posturing wont make any company change their mind, subsidies from the Australian Government just end up adding unmanageable costs to another sector of the market.

  • 2ontrack

    Rubbish. Too many models. They only made twice the price dinosours.

  • 2ontrack

    Double rubbish. Made over priced rubbish.

  • 2ontrack

    Too late. Horse has bolted.

  • 2ontrack

    Importing cruze replacement from the UK.

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