Holden could be sold as GM goes into 'death spiral'

[act2617]

Holden could be sold as GM goes into 'death spiral'
Robert Wilson
25mar06

HOLDEN could be sold off if a desperate General Motors continues to fall into a financial death spiral, a global automotive expert says.

The principal of international automotive strategic consultants Autopolis, Graeme Maxton, said GM was already taking desperate measures to avert the greatest crisis in its 98-year history and sell-offs of its better performing divisions couldn't be ruled out.
"If you look at in terms of pure economics, their investment in Australia must be under question," he said yesterday.

"GM is having to sell off the family silver and close down anything that is not economic to cut costs in order to survive for the next few years," he said.

The Detroit-based automotive giant had already begun disposing of its shareholdings in Japanese makers Isuzu, Subaru and Suzuki, despite these being strategically significant ventures, Mr Maxton said.

And GM yesterday announced it had sold its property financing arm, GMAC Commercial Holding, for $12.5 billion.

"All of these are desperate measures to stay alive. What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again. But it's absolutely hidebound right now. It has so much debt and so many liabilities that it has to simply cut them loose," Mr Maxton said. "They can't do anything until their situation improves but they've got themselves into something of a death spiral because the more they have to cut, the more consumers stay away from their products, the more their market share goes down and the more their losses go up."

Mr Maxton acknowledged Holden was not in the same dire sales situation as GM's US brands whose combined market share fell to a historic low of 25 per cent last year. But he said that the more profitable Holden was, the more tempting it would be for GM to sell it off.

"The question for Holden is who would buy it. There are actually not many companies except maybe a Chinese maker who would buy it right now," he said.

GM's traditional global rival, Ford, was in just as much financial trouble, Mr Maxton said.

"Ford is in many ways in exactly the same situation. The big difference is that GM really does understand how serious its situation is," he said.

"Ford is still pretending it's not that serious but their market share has fallen even more than GM's. The company hasn't woken up to what it has to do."

The cycle of cutbacks and rationalisation that threatened Holden also applied to Ford Australia, Mr Maxton said.

"It's absolutely the same situation but it may take a bit longer because Ford headquarters is in denial," he said.

http://www.theaustralian.news.com.au...592808,00.html

[347_XR8]

Well there ya go

[ef_classic]

Can Holden "leave" GM or is there a big contract involved?

[act2617]

Originally Posted by ef_classic

Can Holden "leave" GM or is there a big contract involved?

Holden belongs 100% to GM US !

[Deanodriver]

I personally doubt that GM will sell of Holden, and even if they do, I bet they'll keep the engine plant, there'd have to be enough demand for 4cyl & V6 engines in GM cars to warrant it staying in their hands.

Who else thinks that Saab will be the next GM owned car company to be sold off, rather than Holden?

[ltd]

Scary times for GM and Ford, Hopefully there are ways to salvage both.
The death of the local auto industry will be a dark time in Oz, and would mean that prices on all cars could potentially go up significantly. Don't believe me?
Well, besides taxes why else are mercedes and BMW about 250% of the price that the same vehicles are sold in the USA?

Scary indeed.

[ltd]

I'll be more worried to hear the slogan;
"Holden means a great deal to Kim Jong Il"
The instrument cluster would be filled with pictures of his head, and the colour would only be that of his grey costume.

[ClevlndStemer]

once they sort out this health plan stuff and other non-manufacturing costs (including staff changes, lack of management, etc) then they need to get some decent cars out there. I mean the SUV isn't going to be there forever, you can't rely on them or the sports cars. They need something with quality, decent price and looks to compete with the camry.

[Mark351]

Unlikely scenario #1 - Ford buys Holden...

[Falcon Freak]

As said above, GM will continue to sell any stake in other automotive companies which it has aquired over the years before they consider selling Holden. In the last year GM has bailed out of Fiat, Subaru and Suzuki. I predict that GM will bail out of Isuzu next.

FF

[act2617]

Some interesting numbers.

Take your own weekly wage and take it from there to see how much it would cost you.

Holden 48-215: the first all-Australian car

The Australian Government had been interested in the idea of an Australian mass produced motor vehicle since the mid-1930s, but this would not become a reality for over a decade. On 29 November 1948, Prime Minister Ben Chifley unveiled the first Holden 48-215, which became affectionately known as 'the FX'.

The price was set at £733 (including tax), which represented a staggering ninety-four weeks' wages for the average worker at the time. Despite this, the car was an immediate success and Holden could not satisfy demand quickly enough. Eighteen thousand people had signed up and paid their deposit without even having seen the vehicle.

When the FJ Holden was released in 1953, the economy had significantly recovered. The car now cost £1,074 (including tax), representing sixty-eight weeks' wages for the average worker.

http://search.netscape.com/ns/boomfr...ar%2Findex.htm

[fmc351]

For those who look to Unions as being too big. Think again. The unions only obtain wages that the market can sustain, ever. Before you start ranting about the market obviously unable to sustain it, thats not right. Management failed not the market, cars are being sold at record numbers, its the particular management that has failed. The market was there, they failed to get a share of it, and no worker can be blamed for that. So now execs move to tactic 2, you must take paycuts or you wont have a job at all. The problem is record exec pay for record incompetence. The market doesnt stop buying GM because its GM, it switches because GM fails to deliver. Theres too much pork in Exec payments, and not enough whip. The buck stops at management, but management only ever give that notion lip service. I mean, we all know that the factory floor worker doing 7.6 hours a day, is driving a 2005 S class Merc and eating caviar with his organic corn flakes as Jeeves rounds the corner for the next failed working day after a huge night on the company tab. Of course he should lose the home he's been diligently paying off for the last 15 yrs. I mean, he turns up each day, puts in his hours and budgets his income, how dare he do that. Get a grip on reality and put the man meat down.

Execs spend too much time gaming the performance evaluation system at the long term expense of the business, and the public allow them to get away with it. Governments and ASIC like arrangements wont do anything to correct it, so yeah its up to you. Alternatively, keep getting played sucker.

[Falcon Freak]

Originally Posted by Falcon Freak

As said above, GM will continue to sell any stake in other automotive companies which it has aquired over the years before they consider selling Holden. In the last year GM has bailed out of Fiat, Subaru and Suzuki. I predict that GM will bail out of Isuzu next.

FF

It appears my prediction is about to be proven correct:

Link to news article

FF

[Falcon Freak]

Originally Posted by Falcon Freak

It appears my prediction is about to be proven correct:

Link to news article

FF

My prediction was correct - GM announced last week that it will sell the 7.9% it owns of Isuzu. Click here for news article

Fiat
Subaru
Suzuki
Isuzu
plus the GM credit/finance division - all sold in the last 15 months

What is the next thing/division GM will sell?

FF

[chief]

Originally Posted by Falcon Freak

My prediction was correct - GM announced last week that it will sell the 7.9% it owns of Isuzu. Click here for news article

Fiat
Subaru
Suzuki
Isuzu
plus the GM credit/finance division - all sold in the last 15 months

What is the next thing/division GM will sell?

FF

What about Saab? GM own a part share in it - they only bought it a couple of months ago.

[Dave_au]

Originally Posted by Falcon Freak

My prediction was correct - GM announced last week that it will sell the 7.9% it owns of Isuzu. Click here for news article

The original article in the original post already said that GM was bailing on Isuzu, don't pat yourself on the back.

[new2ford]

Originally Posted by act2617

What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again.

I wouldn't want to be an ex GM employee. I suppose the next piece of news will be how they're all suddenly dying of myterious illnesses, hit and run accidents etc!

[birdy]

Easy come easy go what are your proposals that we at ford forum can impliment that could possably save the enemy living in sa makes it hard as they are major employers but here we go again ready to ИИИИИ but do #### all???

[XplosiveR6]

Originally Posted by act2617

"All of these are desperate measures to stay alive. What GM is waiting for is when enough of its pensioners die off that it can re-fund itself and invest for growth again.

i dont understand this part, GM having pensioners? can someone explain this please

[ClevlndStemer]

Originally Posted by EF_Dave

i dont understand this part, GM having pensioners? can someone explain this please

they continue to pay the staff even after they retire.

however when it says ford are in denial, i wouldn't say that. Ford certainly know the problem exists, but the difference is it has been happening for a lot longer to ford.

[seano14]

Originally Posted by ClevlndStemer

they continue to pay the staff even after they retire.

alright, i'll bite. why do they do this? : :

[new2ford]

Originally Posted by seano14

alright, i'll bite. why do they do this? : :

superannuation - we have it here too.

[XRQTOR]

Originally Posted by new2ford

superannuation - we have it here too.

super is only a smal percentage of your weekly wage paid to you while you work, the system they have over there pays 8o% of the worker's weekly wage once they reach retirement age.

[Dodge]

put in in the rover basket, i wont miss them

[paulvdb]

Originally Posted by Dodge

put in in the rover basket, i wont miss them

Yeah? Is that so? I'd like to see your car when all that's avail in Australia is the blob-on-wheels whitegoods Camry or 100 varieties of Korean&Chinese cardboard cars. I'm sure you'll be laughing then.

I'm hoping that there's enough cash for the local guys to buy themselves out. The real question is what access Holden would have to GM engines and gearboxes if they split.

[bundy bruiser]

I saw a show I while back saying that their labour cost were very high in the US due to a few unions bargaining for lots of extras payed to their staff. Basically their staff costs don't cut it, good for the worker I suppose.
GM did a lot better last quarter, but who knows.....

[XRQTOR]

Dont they continue to pay the worker's after they sack them up untill they find new work or something along those lines.

[T3ts50]

Originally Posted by XRQTOR

Dont they continue to pay the worker's after they sack them up untill they find new work or something along those lines.

Thats right till they find another job. That is one of their biggest problems, why would you look for another job if you were getting a full wage and can go to the beach everyday.

[mik]

wouldn`t surprise me if toyota bought holden out they`ve worked with holden before, and they could afford it i rekon, they seem to think longer term financially and smarter than some other companies.

[vztrt]

Originally Posted by mik

wouldn`t surprise me if toyota bought holden out they`ve worked with holden before, and they could afford it i rekon, they seem to think longer term financially and smarter than some other companies.

If that happened would the next lot of commos be overpriced bland FWD cars?