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.
“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.”
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.