Thursday, February 20, 2020


In my own analyses in ‘Driving & Life’ of the reasons behind GM’s shock closure and abandonment of the Holden brand I have focussed on the corporate decisions which hastened its demise.

However, writing today in Australia’s national broadsheet, The Australian, respected business commentator and analyst Robert Gottliebsen stresses the part which greedy unions played in the Brand’s demise. In fact the behaviour of unions in the Australian automotive sector, mirrors that in the USA over decades.

Gottliebsen points out that it was the unions which ‘controlled’ the factory floor, and successive Holden CEO’s appointed by GM in Detroit, were either powerless, or too timid to actually make a stand.

Whilst I lived and worked in the USA I watched from the sidelines as the same pattern emerged.

Every two years the unions would bargain a new deal for their members, and the companies simply gave in to their demands.

Which I think is akin to kicking the can a few more metres down the road.

In Australia, the behaviour of the unions was a material element of the slow death of car manufacturing.

The other was the plethora of various taxes and duties which successive governments saddled the car industry with; and then there was a stronger Australian dollar, at a time when GM had attempted to import Australian-built Commodores (under both the Pontiac and Chevrolet badges) into the USA.

As my good friend Bob Lutz has pointed out, the export/import deals were conceived when the Australian dollar was lower against the Greenback.

However, by the time it came to produce, export and invoice GM for the Australian-sourced cars, the Oz dollar had strengthened, meaning much lower profit margins for General Motors. The cars were priced too high and neither deal lasted long.

Everyone who drove the Aussie-built G8 Pontiac agreed it was a helluva car, especialy the 1,832 lucky buyers who managed to snag one.

Then we come to Government subsidies. For years, both Ford and GM, threatened governments of all political colour that if they did not get their subsidies they would pull out of Australia. Governments, of course, capitulated. None of them wanted the bad press, or bad PR of putting thousands of Aussie workers out of a job.

None more so than when Labor was in power, and left-leaning (meaning union intimidated) Minister for Industry, Senator Kim Carr (right) was in charge of doling out taxpayers' dollars to the car companies.

Yes, hindsight is 20-20 vision, but although I only began publishing ‘Driving & Life’ in 2010, I had been warning my friends in the US and Australian media since 2002, that the problems of maintaining the Australian car manufacturing industry had begun before the turn of the century.

I have already highlighted the fact that both Holden and Ford pressed on making cars that would be out-of-date by the middle of the noughties. They were benchmark cars, but the market had moved on.

No attempt was made to re-arrange their product catalogues.

The Japanese and Korean companies managed to see the writing on the wall, and fed into Australia products that actually resonated with shifting consumer preferences.

I was always against subsidies and handouts. Australia needed to maintain the intent of previous Labor Treasurer and later Prime Minister, Paul Keating, and ensure that Australia was free of duties and onerous taxes; the dollar floated on global exchanges; and the elimination of subsidies, which insulated companies against real market pressures.

I have always maintained that in a capital-driven business environment, the market should rule, and the uncompetitive companies should close-up if they can't compete.

The Australian automotive unions for their part should have seen the coming changes, and begun to agitate for expansion of training facilities, such as TAFE or trade schools, to ensure their members utilised a wider range of skills. However, we all know that once the union fatcats were banking their huge pay checks every week, they weren’t about to rock the boat.

Yes, it’s a tragedy that Holden will disappear from our social and automotive landscape, but I could see the potential for it to happen, more than 15 years ago, and as I have outlined – there is plenty of blame to go around. How's this for irony?

John Crawford


  1. John, Good article yet again, but as always the press here seem to think the world revolves around Australia. The elephant in the room is the mainly Euro and Californian mandating emission standards that essentially mean EV pushing out ICE. GM pulled out of RHD as an irritant to funding EVs.

  2. De Lorean made much of the fact General Motors is a behemoth unable to respond quickly to change. The company's models as times have always been way longer than Ford's, for instance.

    But the mistakes in Australia were many. At the time they were preparing to close Pagewood, MD Chuck Chapman rang me with a titbit.
    They had discovered some early cost-benefit analysis documents from the period when they were deciding where to build the plant that was to become Pagewood.
    One of the alternatives was Newcastle. The ever inquisitive, and very intuitive, Chuck had had his bean counters re-do the figures adding in modern market information.
    "John, the figures show that had we built the plant in Newcastle and not Sydney we would not now be in the process of closing it.."

    Factors included the proximity of the steeelworks and two Hunter aluminium smelters, the fact Newcastle is the east coast port closest to the Continental shelf (sea routes) and a relatively uncluttered port with rail virtually alongside the docks and plenty of harbourside land for hard stand, storage.
    Other things included a pool of highly skilled labour, better access to both the Pacific and New England highways and the opportunity to improve road/rail access direct to the west.

  3. Models as times .... doh .... model lead times