Recent rumours suggest that Holden Special Vehicles will be making a number of cosmetic and mechanical changes to its E-Series range of performance sedans soon.
The upcoming changes will involve some mechanical tweaking to the 6.2 litre LS3 V8 used by the E-series range, which should see power graduated to around 325kW and fuel economy improved to just under 14 l/100km combined cycle.
Some updated body styling is also apparently being prepared. HSV is said to want to further visually move away from the volume-selling Commodore sedan range. Huge aesthetic changes would probably be too risky and expensive for HSV to accomplish, but new bumpers, wheels and other aero add-ons are on the cards.
The VE-based HSV line-up has proved the most popular in HSV’s 21-year history so the performance manufacturer is hopeful that an upgraded model line will keep customers interested.
Will the rumoured refinements for 2010 E-Series HSV’s keep sales figures strong in a market that’s steadily moving away from big, thirsty sedans? Only time will tell.
The global economic crisis, rising petrol prices, a consumer shift away from large cars and some large, one-off expenses have all worked against Holden to see it lose out in 2008.
Australia’s iconic automaker recorded a $70.2 million AUS loss for 2008, caused largely by a massive $76.8 million bill for various one-off costs, mostly related to the decommissioning of Melbourne’s Family II engine plant.
Before the decommissioning expense, Holden was on track to post a small after-tax profit of $6.6 million for the year ending December 31. In the current economic climate, the loss is an acceptable one for Holden. Quality products, a strong export program and careful production management has still protected the company’s finances in a turbulent global market.
Total sales revenue dipped from $5.7 billion in 2007 to $5.4 billion, as many new car buyers shifted away from large cars like the Commodore.
Export revenue rose from $1.6 billion to $1.9 billion due to engine exports and the newly-released Pontiac G8 in the states, but with the G8 officially discontinued and GM enduring bankruptcy, this year’s export results may not be as positive.
The global economic slump prevented Holden from making a profit for 2008, like it did for many other automakers, but Ford came off much worse with a record $274.4 million loss.
Despite no profits last year, Holden is a solid performer and its position within the GM stable is still assured. The addition of the Cruze to Holden’s line-up should provide a vehicle capable of retaining customers downsizing from the Commodore, while the new locally-made small hatchback that’s expected to arrive next year will also give the company hope.
Over in the states the once proud Pontiac brand is now dead in the water but many American enthusiasts are clamouring for the Pontiac G8 aka Holden Commodore to be rebadged and sold under another GM brand name.
Designed and constructed in Australia by Holden, the G8 has been a better than average seller thanks to its competitive pricing and sporty nature, and it may get another chance.
GM’s current CEO, Fritz Henderson, has already been clear that no Pontiac vehicle will survive the marques extinction. But Henderson also has a commitment to retain bits of GM’s sporting heritage, so the Corvette will remain in the portfolio along with other performance models. The high-performance version of the G8 named the G8 GXP will not continue according to Henderson but what about the lesser versions?
The standard Pontiac G8 sedan’s future is up in the air and enthusiasts are lobbying GM to keep the car and simply remarket it as the Impala SS. With the Impala SS set to be phased out shortly, the plan appears to have timing on its side, but even so GM’s vice chairman of global product development Tom Stephens still doesn’t think there’s room for the car at Chevrolet.
In a recent interview, Stephens claimed that while there are still be discussions raging on about the G8’s future, the fact is that “Chevrolet already has several sedans” making the rebranding of the car unnecessary. GM could attempt to rebrand it as a Buick model but again the likelihood of this is uncertain considering boss man Fritz Henderson’s dislike of the G8 GXP performance model.
The G8/Commodore has done the hard yards and proven itself in the American market and with minimal development costs it would be easy to market the car following Pontiac’s demise – although figuring out which brand may best support the car will be very tricky for GM.
Here’s a crazy idea; why not take that stupid Pontiac face off the car, let it be a proudly Australian Holden Commodore, and sell it through the GM dealer networks. Then watch as the American public slowly realise that a GM subsidiary on the other side of the world is making a better sports sedan than GM America is capable of.
Holden are set to continue normal operations in Australia and New Zealand and does not expect changes to its business after General Motors announced its bankruptcy in the US. “Operations at Holden are unchanged in Australia and New Zealand and we expect it to remain that way,” Holden Chairman and Managing Director, Mark Reuss, said yesterday.
“GM has clearly stated that all of its businesses in the Asia Pacific region — and that includes Holden — continue normal operations and are not directly impacted by this process in the US. “No operations outside the US are included in the court filing or court supervised process. “Holden is a subsidiary of GM but we are a corporate entity in our own right — an independent company under Australian law. “Beyond that, GM has indicated that Holden will be an important part of the New GM. “We intend to maintain our focus on Holden product programs and activities. “That means technology improvements to our Commodore range, launching the all-new Holden Cruze this month, and the introduction of our locally-built fuel efficient, four cylinder small car next year.
“We continue to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network. “We don’t anticipate this decision will have any direct impact on Holden’s workforce, dealers, or suppliers. “Holden customer warranties are not affected. We wouldn’t normally issue statements to highlight nothing has changed, but we appreciate that customers will naturally ask questions about this sort of announcement from the US.” Mr Reuss said Holden would remain informed of developments in the US, a process which had been determined to reinvent General Motors.
“The process being used in the US is unlike Australian and New Zealand law. It is a fast, court supervised process that permits the sale of selected assets to a new entity,” Mr Reuss said. “Unlike court-controlled processes in many other countries, US chapter 11 allows GM to deal with the financial issues that have built up over many years and for New GM to emerge as a healthier business, better able to deal with the challenges of today and tomorrow. “It does not mean ceasing to trade.” Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM, with two distinct advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before.
GM has previously indicated it is negotiating with prospective buyers for the Saab and Hummer brands. GM is working closely with dealers, including those in Australia and New Zealand, to continue delivering vehicles and maintaining aftersales and servicing requirements.
Financially troubled carmaker Opel has just released details of its upcoming next-generation 2010 Astra before its official debut at the Frankfurt Motor Show this September.
The 2010 Astra’s design is inspired by the larger Opel Insignia, it shows off all-new sheet metal that takes cues from its big brother and packages it into a smaller, more fluid shape. The fascia, headlamps and back-end reflect Opel’s new design direction, along with the sculpted sides and raked-back windscreen.
The new Astra has a wheelbase that stretches 2.8 inches longer than the outgoing model. The “wing and blade” design language employed on the exterior carries through to the interior, and joins ergonomic seats and the new Opel Eye front camera system, which can apparently recognise road signs and warns drivers if they veer out of their lane.
There will be a total of eight different engines available, including four CDTI common-rail diesels with displacements ranging from 1.3- to 2.0-litres and outputs of between 95 and 160 hp. Another four gas-powered units, with displacements between 1.4- and 1.6-litres, dish out between 100 and 180 hp along with a new turbocharged 1.4-litre that replaces the outgoing naturally aspirated 1.8-litre and puts out 140 hp and 14% more torque, while lowering fuel consumption.
The wraps officially come off the five-door Astra later this year, while a four-door sedan, three-door hatch and a two-mode hybrid variant are expected to debut in 2010. Global sales should begin towards the end of 2009, and hopefully we will see the new 2010 Astra down here in NZ next year with a Holden badge whacked on the front.
With Pontiac’s death official, Holden could lose around $1 billion annually with the demise of the Pontiac G8. However, Holden has a never-say-die attitude that has it busy looking for other stateside options. The Aussie automaker has drawn up plans to offer the rear-wheel drive Commodore platform to Cadillac and GMC.
Although GM’s CEO, Fritz Henderson, has confirmed that the G8 won’t live on, there’s still a chance it could be used by law enforcement in the States (read news item), and with American brand Cadillac’s recent attempts to inject more RWD models into the mix, the Zeta architecture that underpins the Commodore could be used for a new line of Caddies.
With GMC safe — for now — from sharing a grave with Pontiac, Holden could easily make a case for importing the Commodore ute to the U.S. as a fuel-efficient alternative to GMC’s otherwise big and thirsty pick-ups. Where there’s a niche, GM normally likes to fill it, and the Zeta-based Cadillacs may look likely soon as GM seeks to downsize some larger vehicles to aid its survival.
Naturally, the death of the Pontiac brand in America has put the skids on global sales plans at Holden (click here for news item). The popular Pontiac G8 is essentially a lightly reworked version of the Holden’s own Commodore sedan. Now, according to an Aussie website car website, a new player may be preparing to make up for the sales short – a consortium led by the Los Angeles Police Department.
Currently, Ford in America sells about 60,000 Crown Vic police cars each year for fleet use, with the majority of those going to various units around the United States, but production of the ancient rear-drive Ford isn’t likely to continue past next year, and it’s thought that Dodge’s Charger probably won’t cover the fresh demand, so alternatives will be needed. With that in mind, Melbourne-based company the National Safety Agency has created a new prototype patrol vehicle based on the Pontiac G8/Commodore that could be rebadged as a Chevrolet and sold to law enforcement units in the United States and possibly other foreign markets.
There’s even rumour that the new model could be made available for American retail sale at Chevrolet dealerships. Holden has naturally expressed interest in the project, though it’s taking a cautious approach given the current state of the American automobile industry.
We were quite bullish on Holden’s future until this morning when we read GM’s press release. We were of the opinion that it would cost GM too much to ditch Holden, but it seems that by any measures necessary, GM will slash costs, even if that means ditching brands that could once again flourish.
The problem for Holden is that now Pontiac has gone, there’ll be no more orders for the G8, which is based on the Commodore. Holden was banking on selling 30,000 of these in the US and another 70,000 worldwide. US$77m was spent upgrading the Port Elizabeth factory in Australia to build left-hand drive vehicles.
Holden’s only hope is to rebadge the Commodore/G8 as a Chevy – something that’s already done in some markets.
The words fire sale come to mind as GM heads towards Chapter 11 bankruptcy protection.
Here’s GM’s full press release, and a video of the press conference.
FOR RELEASE: 2009-04-27
GM Accelerates its Reinvention as a Leaner, More Viable Company
Updated Viability Plan Speeds, Deepens Restructuring of U.S. Operations
DETROIT — General Motors (NYSE: GM) today presented an updated Viability Plan that will speed the reinvention of GM’s U.S. operations into a leaner, more customer-focused, and more cost-competitive automaker.
The Viability Plan is included in an exchange offer whereby GM is offering certain bondholders shares of GM common stock and accrued interest in exchange for certain outstanding notes.
Revised Viability Plan goes further and faster
The Viability Plan announced today builds on the February 17 Viability Plan submitted to the U.S. Treasury. The revised Plan accelerates the timeline for a number of important actions and makes deeper cuts in several key areas of GM’s operations, with the objective to make us a leaner, faster, and more customer-focused organization going forward.
Significant changes include:
* A focus on four core brands in the U.S. – Chevrolet, Cadillac, Buick and GMC – with fewer nameplates and a more competitive level of marketing support per brand.
* A more aggressive restructuring of GM’s U.S. dealer organization to better focus dealer resources for improved sales and customer service.
* Improved U.S. capacity utilization through accelerated idling and closures of powertrain, stamping, and assembly plants.
* Lower structural costs, which GM North America (GMNA) projects will enable it to breakeven (on an adjusted EBIT basis) at a U.S. total industry volume of approximately 10 million vehicles, based on the pricing and share assumptions in the plan. This rate is substantially below the 15 to 17 million annual vehicle sales rates recorded from 1995 through 2007.
“We are taking tough but necessary actions that are critical to GM’s long-term viability,” said Fritz Henderson, GM president and CEO. “Our responsibility is clear – to secure GM’s future – and we intend to succeed. At the same time, we also understand the impact these actions will have on our employees, dealers, unions, suppliers, shareholders, bondholders, and communities, and we will do whatever we can to mitigate the effects on the extended GM team.”
Fewer U.S. brands, nameplates, and dealers
As part of the revised Viability Plan and the need to move faster and further, GM in the U.S. will focus its resources on four core brands, Chevrolet, Cadillac, Buick and GMC. The Pontiac brand will be phased out by the end of 2010. GM will offer a total of 34 nameplates in 2010, a reduction of 29 percent from 48 nameplates in 2008, reflecting both the reduction in brands and continued emphasis on fewer and stronger entries. This four-brand strategy will enable GM to better focus its new product development programs and provide more competitive levels of market support.
The revised plan moves up the resolution of Saab, Saturn, and Hummer to the end of 2009, at the latest. Updates on these brands will be provided as these initiatives progress.
Working with its dealers, GM anticipates reducing its U.S. dealer count from 6,246 in 2008 to 3,605 by the end of 2010, a reduction of 42 percent. This is a further reduction of 500 dealers, and four years sooner, than in the February 17 Plan. The goal is to accomplish this reduction in an orderly, cost-effective, and customer-focused way. This reduction in U.S. dealers will allow for a more competitive dealer network and higher sales effectiveness in all markets. More details on these initiatives will be provided in May.
Sales volume and market share projections
The Viability Plan anticipates improved financial results despite more conservative U.S. sales volume expectations going forward. The lower volume expectations are the result of managing the business with fewer nameplates and dealers, leaner inventories, and reduced market share. To address the inventory issue, GM on April 23 announced U.S. production schedule reductions of approximately 190,000 vehicles during the second and early third quarters of 2009.
The Viability Plan also reduces GM’s market share projections to adjust for the impact of the brand and dealer consolidation, as well as for the short-term impact of speculation regarding a GM bankruptcy. The plan assumes a 19.5 percent share in 2009, with share stabilizing in the 18.4 to 18.9 percent range in subsequent years.
“We have strong new product coming for our four core brands: the Chevrolet Camaro, Equinox, Cruze and Volt; Buick LaCrosse; GMC Terrain; and Cadillac SRX and CTS Sport Wagon and Coupe,” said Henderson. “A tighter focus by GM and its dealers will help give these products the capital investment, marketing and advertising support they need to be truly successful.”
Lower structural costs, lower breakeven point
The Viability Plan also lowers GMNA’s breakeven volume to a U.S. annual industry volume of 10 million total vehicles, based on the pricing and share assumptions in the plan. This lower breakeven point (at an adjusted EBIT level) better positions GM to generate positive cash flow and earn an adequate return on capital over the course of a normal business cycle, a requirement set forth by the U.S. Treasury in its March 30 viability plan assessment.
GM will lower its breakeven point by cutting its structural costs faster and deeper than had previously been planned:
* Manufacturing: Consistent with the mandate to accelerate restructuring, we plan to reduce the total number of assembly, powertrain, and stamping plants in the U.S. from 47 in 2008 to 34 by the end of 2010, a reduction of 28 percent, and to 31 by 2012. This would reflect the acceleration of six plant idling/closures from the February 17 plan, and one additional plant idling. Throughout this transition, GM will continue to implement its flexible global manufacturing strategy (GMS), which allows multiple body styles and architectures to be built in one plant. This enables GM to use its capital more efficiently, increase capacity utilization, and respond more quickly to market shifts.
* Employment: U.S. hourly employment levels are projected to be reduced from about 61,000 in 2008 to 40,000 in 2010, a 34 percent reduction, and level off at about 38,000 starting in 2011. This further planned reduction of an additional 7,000 to 8,000 employees from the February 17 Plan is primarily the result of the previously discussed operational efficiencies, nameplate reductions, and plant closings. GM also anticipates a further decline in salaried and executive employment as it continues to assess its structure and execute the Viability Plan. More details will be announced as soon as they are finalized with the various stakeholders.
* Labor costs: The Viability Plan assumes a reduction of U.S. hourly labor costs from $7.6 billion in 2008 to $5 billion in 2010, a 34 percent reduction. GM will continue to work with its UAW partners to accomplish this through a reduction in total U.S. hourly employment as well as through modifications in the collective bargaining agreement.
As a result of these and other actions, GMNA’s structural costs are projected to decline 25 percent, from $30.8 billion in 2008 to $23.2 billion in 2010, a further decline of $1.8 billion by 2010 versus the February 17 Plan.
Strengthening GM’s balance sheet
Another key element of GM’s restructuring will be taking the necessary actions to strengthen its balance sheet. GM today took an important step in improving its balance sheet by launching a bond exchange offer for approximately $27 billion of its unsecured public debt. If successful, the bond exchange would result in the conversion of a large majority of this debt to equity.
“A stronger balance sheet would free the company to invest in the products and technologies of the future,” Henderson said. “It will also help provide stability and security to our customers, our dealers, our employees, and our suppliers.”
Another important part of improving the balance sheet will be the ongoing discussions with the UAW to modify the terms of the Voluntary Employee Benefit Association (VEBA), and with the U.S. Treasury regarding possible conversion of its debt to equity. The current bond exchange offer is conditioned on the converting to equity of at least 50 percent of GM’s outstanding U.S. Treasury debt at June 1, 2009, and at least 50 percent of GM’s future financial obligations to the new VEBA. GM expects a debt reduction of at least $20 billion between the two actions.
In total, the U.S. Treasury debt conversion, VEBA modification and bond exchange could result in at least $44 billion in debt reduction.
Throughout the Plan, GM will continue to make significant investment in future products and new technologies, with an investment of $5.4 billion in 2009, and investments ranging from $5.3 to $6.7 billion from 2010 to 2014. Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.
“The Viability Plan reflects the direction of President Obama and the U.S. Treasury that GM should go further and faster on our restructuring,” Henderson said. “We appreciate their support and direction. This stronger, leaner business model will enable GM to keep doing what it does best – provide great new cars, trucks and crossovers to our customers, and continue to develop new advanced propulsion technologies that are vital for our country’s economy and environment.”
# # #
About GM – General Motors Corp. (NYSE: GM), one of the world’s largest automakers, was founded in 1908, and today manufactures cars and trucks in 34 countries. With its global headquarters in Detroit, GM employs 243,000 people in every major region of the world, and sells and services vehicles in some 140 countries. In 2008, GM sold 8.35 million cars and trucks globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall and Wuling. GM’s largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM’s OnStar subsidiary is the industry leader in vehicle safety, security and information services. More information on GM can be found at www.gm.com.
Forward-Looking Statements – In this press release and in related comments by our management, our use of the words “plan,” “expect,” “anticipate,” “ensure,” “promote,” “believe,” “improve,” “intend,” “enable,” “continue,” “will,” “may,” “would,” “could,” “should,” “project,” “positioned” or similar expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. We believe these judgments are reasonable, but these statements are not guarantees of any events or financial results, and our actual results may differ materially due to a variety of important factors. Among other items, such factors might include: our ability to comply with the requirements of our credit agreement with the U.S. Treasury; our ability to execute the restructuring plans that we have disclosed, our ability to maintain adequate liquidity and financing sources and an appropriate level of debt; the ability of our foreign subsidiaries to restructure and receive financial support from their local governments or other sources; our ability to restore consumers’ confidence in our viability and to continue to attract customers, particularly for our new products; our ability to sell, spin-off or phase out some of our brands, to manage the distribution channels for our products, and to complete other planned asset sales; and the overall strength and stability of general economic conditions and of the automotive industry, both in the U.S. and globally.
Our most recent reports on SEC Forms 10-K, 10-Q and 8-K provide information about these and other factors, which may be revised or supplemented in future reports to the SEC on those forms.