Has GM killed the Commodore?
Holden says local jobs are safe, but its model line-up is far from certain.
General Motors latest corporate axe swinging will result in the loss of 14,000 jobs and five factory closes across North America by the end of 2019.
It’s the largest restructuring the giant US brand has undertaken since it was bailed out from bankruptcy by the US Government in 2008. The repercussions of the bailout lasted until 2014 and, in the years since, CEO Mary Barra has rapidly changed how the company operates.
The vision for GM is one of electric vehicles and driverless cars, completely at odds with the iconic brand’s history of big petrol vehicles and driving the affordable American dream. It’s also at odds with the CEO’s comment four years ago that GM did only one thing – build trucks, cars and crossovers.
Since then, the big Detroit car maker has invested billions of dollars into new driverless and electric vehicle divisions, with a focus on leading the automotive industry into an ownerless ride-sharing future.
Barra has taken GM dauntlessly into an untried business model thats required massive cutbacks around the world; factory closures and market exits in Russia and Indonesia in 2015, pulling out of the enormous Indian car market in 2017, selling its South African manufacturing and operations in 2017, closing Holden’s local manufacturing plant in 2017, shutting another plant in South Korea earlier this year and now ceasing operations at five North American plants with three more facilities outside the US to shut in 2019.
GM also sold its European interest Opel in 2017 to the PSA Group for $3 billion, of which it had to pay back even more than that to cover workers pension plans.
And it put Australia’s longest living automotive nameplate into doubt - the Commodore.
Now sold as a fully-imported model, the new Commodore ZB is a rebadged German-built Opel Insignia that is now owned by Groupe PSA - the parent company of Peugeot and Citroen. Holden says it has a contract to source the model until at least 2023 but given its recent performance it seems unlikely GM would want to pay another maker to build a low-volume vehicle.
Speaking with Drive recently at a local event, GM vice president and ex-Holden boss Mark Reuss said that even with the ZB Commodore unlikely to be produced by PSA, it could source the car elsewhere within its keep.
“We can [build it outside of PSA]. We can do whatever we want because we own that whole platform. That’s our IP,” he said.
“We do a car called the Regal GS which for the US is a little different, but it has the same DNA and is on the same platform which is really good.”
“For rear-drive needs the sedan market is gone," said Reuss. "So, it’s like we have this [ZB Commodore], we have a wagon and SUVs are certainly very popular here. So the question is ‘how much of the total market is consumed by an SUV or a crossover?’”
As it turns out, Australia has been dominated by the SUV, with sales of the high-riding vehicle accounting for over 50 per cent of new vehicle sales. That, and the recent closure of four US and one Canadian GM factories, could result in majorly restructured local showrooms. And it could mean a loss of the Commodore as we know it.
The Canadian Government has confirmed GM is closing its Oshawa, Ontario plant where the Regal GS is produced - the current option for continuing Australia’s Commodore badged liftback according to Reuss.
The question is, what does that leave available for Holden?
The factory closures of Detroit/Hamtramck, Lordstown, Baltimore and Warren in the US, and the Ontario-based plant in Canada, will see production of the Chevrolet Impala, Cruze and Volt, the Buick LaCrosse and Cadillac CT6 and Cadillac XTS cease.
The closure of GM’s Gunsan facility in South Korea earlier this year has also seen the Holden Astra sedan stop production as it tries to quietly leave the market. And that happened only a short time after it was brought to Australia as a new model in late-2017. It reads as if future product plans made by Holden and closures executed within GM are at odds with each other, leaving the lion brand’s unwavering commitment to the Commodore and other models in doubt.
What is on the table after the factory closures will be the Chevrolet Spark (and Spark EV), Soniq, Trax, Malibu, Camaro, Corvette, Acadia, Equinox, Colorado, Trailblazer and Silverado.
Of that, Holden currently imports and sells the Acadia, Trax, Colorado, Equinox and Trailblazer. It also sells the Camaro and Silverado but as right-hand drive converted models that wear a Chevrolet badge.
In a statement released to media this week, Holden says that local jobs and the current line-up are unaffected by GM’s latest move, even if changes in direction from Detroit are unpredictable.
“While the vast majority of steps announced overnight apply directly to North American operations, GM Holden continues to support GM’s global business objective by implementing its strategy to operate a lean national sales company focused on strengthening the Holden brand and growing sales,” it said the statement.
“GM is taking actions to support profitability and give flexibility to invest for the future. These are important measures to position the company for long-term success.
“These announcements are not related to Holden’s product portfolio which remains unchanged and is the best and most comprehensive in our history."
In August 2018, GM invested $120 million into Holden’s local engineering research and development team, stimulating the creation of 150 new jobs and creating the GM Advanced Vehicle Development division that helps underpin GM’s autonomous, electric and ride-sharing future.
“Holden’s local engineering and design capability was further strengthened earlier this year with investments at the Lang Lang proving ground and in Advanced Vehicle Development," Holden further added in light of the 14,000 job losses in North America.
But the big question is, can Holden still fight for the Commodore? Even if the writing is on the wall for the model, perhaps its long-term future is as a driverless taxi.