Change is in the air at General Motors. With the company's stock price rising to new highs, the US government is divesting itself from the last of its holdings in GM. The auto giant also recently announced a complete restructuring of its European operations, as well as its Chinese operations, and – there was something else – oh yeah, the appointment of the industry's first female chief executive. But for our friends Down Under, the biggest news has just been announced.

Following earlier reports, GM has confirmed that it is shutting down all its Australian manufacturing operations by the end of 2017. The move is expected to cost the Aussies some 2,900 jobs over the next four years as manufacturing comes to an end at Holden plants in Elizabeth and Victoria. GM cites as a principal reason for the move the strength of the Australian dollar, which has risen in value against the US dollar from 50 cents in 2001 to as high as $1.10, making it 65 percent more expensive for an American company to manufacture in Australia than it was a decade ago. The decision follows a similar announcement made by Ford earlier this year.

Although Holden's design studio will remain untouched for the time being, its engineering department is being gutted, leaving the division to focus strictly on sales and parts. Just what that means for the future of the Commodore (Holden's only home-grown product in a portfolio of rebadged Chevys) remains to be seen, as does the fate of the Chevy SS which Holden manufactures for export to the US market. But for now you can view the full announcement below.
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GM to Transition to a National Sales Company in Australia and New Zealand
Company to cease manufacturing in Australia by 2017

2013-12-10

DETROIT – As part of its ongoing actions to decisively address the performance of its global operations, General Motors today announced it would transition to a national sales company in Australia and New Zealand. The company also said it would discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.

"We are completely dedicated to strengthening our global operations while meeting the needs of our customers," said GM Chairman and CEO Dan Akerson. "The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world."

As a result of the company's actions, approximately 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden's Victorian workforce.

Holden will continue to have a significant presence in Australia beyond 2017, comprising a national sales company, a national parts distribution centre and a global design studio.

GM Holden Chairman and Managing Director Mike Devereux said an important priority over the next four years would be to ensure the best possible transition for workers in South Australia and Victoria.

"This has been a difficult decision given Holden's long and proud history of building vehicles in Australia," said Devereux. "We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people."

The sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged.

"GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government's point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers," Devereux said.

Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar's peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.

With the decision to discontinue vehicle and engine manufacturing in Australia by the end of 2017, GM expects to record pre-tax charges of $400 million to $600 million in the fourth quarter of 2013. The charges would consist of approximately $300 million to $500 million for non-cash asset impairment charges including property, plant and equipment and approximately $100 million for cash payment of exit-related costs including certain employee severance related costs. Additional charges are expected to be incurred through 2017 for incremental future cash payments of employee severance once negotiations of the amount are completed with the employees' union. The asset impairment charges will be considered special for EBIT-adjusted reporting purposes.

About General Motors Co.
General Motors Co. (NYSE:GM, TSX: GMM) and its partners produce vehicles in 30 countries, and the company has leadership positions in the world's largest and fastest-growing automotive markets. GM, its subsidiaries and joint venture entities sell vehicles under the Chevrolet, Cadillac, Baojun, Buick, GMC, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling brands. More information on the company and its subsidiaries, including OnStar, a global leader in vehicle safety, security and information services, can be found at http://www.gm.com.


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    • 1 Second Ago
  • 50 Comments
      RedEmblem
      • 1 Year Ago
      I'm sure the Holden brand will still be around. GM is likely to sell the same entry-level cars across the globe under different brands.
      z28ssx
      • 1 Year Ago
      The exchange rate is killing Australian exports. It also makes it a very expensive place to vacation.
      thejaredhuang
      • 1 Year Ago
      If they make the Commodore here I'm looking forward to the Wagon and Ute versions
      Gugue
      • 1 Year Ago
      Well, many things will happen until 2017, I hope the tide turns and the Australian plants keep running... Anyway, GM assuming that Opel is its European Chevrolet (as it used to be until 2003), and keeping Holden's design studio, it can make global cars as the "one Ford" strategy, but with more regional identity like the next gen of Astra and Cruze, Corsa and Sonic. Anyway, in the worst scenario case the Holden Commodore might end up as a rebadged FWD Impala...
        • 1 Year Ago
        @Gugue
        [blocked]
          Cyrus Brooks
          • 1 Year Ago
          The new Impala is quite handsome but built on the wrong platform. They should have based it on the Zeta platform. Big fwd cars tend to awful to drive.
          yonomo200
          • 1 Year Ago
          It's budget lux, Definitely not supposed to be "exciting." But I think it's pretty impressive, the reviews thus far. Besides, front wheel drive is not the best platform for exciting. What needs to happen is a North American developed large rear wheel drive platform, something GM should have been doing all along anyway. Get those platforms back to the U.S. where they belong instead of importing everything.
      Proghog
      • 1 Year Ago
      Couldn't they use the future flagship Cadillac platform which is supposed to be RWD.
      Mr. Bader®
      • 1 Year Ago
      Best move ever they quality of auzi produced car is garbage
      budwsr25
      • 1 Year Ago
      Australian dollar has risen in value against the US dollar which is making it more expensive for an American company to manufacture in Australia. Who do we blame for this? Australia, Asia and even Russia is prospering while the US, and Europe, are falling lower into the pit. The Middle East and Africa would be doing better than the US also if they would just stop fighting and killing each other. We as americans need to fix this mess. We should be the #1! economy!!! And have others follow our lead.
        Jerry
        • 1 Year Ago
        @budwsr25
        Keep dreaming, the day of America leading is over bud.
        Daniel D
        • 1 Year Ago
        @budwsr25
        Sorry mate its been a lot of years since American lead economically. Its not in the interest of ironically US multinationals to ever see that happen again. They openly work against it ever happening.
        inthelv
        • 1 Year Ago
        @budwsr25
        you're right. And to haters, when in history have millions of people from all over the prosperous countries of the world come to your country for the Chinese, Latvian, Japanese, Russian, Indian, etc.., "Dream"? Oh wait, that would have to have been done in the history of the world. Oh yeah it was us, the USA! WE ROCK!
        cartarded
        • 1 Year Ago
        @budwsr25
        and what are you doing "as an american" to fix this mess?
      loopless
      • 1 Year Ago
      Australia's economy has been booming because of resources. We dig stuff up and send it to China. This has let Australia sail through the debt-crisis and pushed up the $AUD and wages (we have a living minimum wage , BTW) making car-manufacturing an expensive proposition. The current government is politically and economically inept and was only elected because the previous one shot itself in the foot multiple times. Holden offered them a plan to keep manufacturing in Australia, but rather than support them they stood on their conservative political 'principles' and told them to publicly take a hike.A few thousand assembly line workers will lose their jobs directly, but the knock-on effect and loss of highly-skilled white collar workers will be a huge negative impact.
        Daniel D
        • 1 Year Ago
        @loopless
        In a video of Tony Abbott in parliament yesterday, it was painfully obvious he was out of his depth. The rhetoric was all good fun for them, but now the reality is not so easy. South Australia and Victorias economies are now officially becoming basket cases.
      anon
      • 1 Year Ago
      Please please GM DO NOT throw away the Holden Commodore/Stateman/Caprice platform, that\'s one asset you should keep and use on the other marques you make, finally you get it right.
      Seal Rchin
      • 1 Year Ago
      "GM cites as a principal reason for the move the strength of the Australian dollar, which has risen in value against the US dollar from 50 cents in 2001 to as high as $1.10, making it 65 percent more expensive for an American company to manufacture in Australia than it was a decade ago. The decision follows a similar announcement made by Ford earlier this year."----------------------But, but people on Autoblog say that only China and other south east Asian countries manipulate their currencies.
        Julius
        • 1 Year Ago
        @Seal Rchin
        "But, but people on Autoblog say that only China and other south east Asian countries manipulate their currencies." Yes, they manipulate them DOWN. If you have an export-based economy, then manipulating them UP is suicide.
      4gasem
      • 1 Year Ago
      Well I guess my G8 will be worth even more now. I'm glad I decided to keep it.
      budwsr25
      • 1 Year Ago
      First Pontiac now Holden. It\'s the end of RWD V8 cars as we have all grown to love.
        z28ssx
        • 1 Year Ago
        @budwsr25
        Cadillac might have something for you in 2014 ;)
        no1bondfan
        • 1 Year Ago
        @budwsr25
        Chrysler and Dodge have you covered on that. Also, z28ssx is onto something with Cadillac. The next CTS-V is going to be a beast. Alas, we still have to dream of Lincoln rejoining the party. That 2002 Continental Concept was just too good an idea to have been dropped.
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