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GoAutoNews - Holden

Holden export fright

GM Holden's Pontiac ute program under threat as global recession bites in the US

By DAVID HASSALL 16 December 2008

DOUBTS have emerged over the future of at least one of Holden’s export programs to the United States as a result of General Motors’ financial crisis.

GM’s Pontiac brand is reportedly reconsidering plans to launch a rebadged Commodore ute as the G8 ST sports pick-up late next year.

“We are having lots of discussions (and) we would be foolish if we didn’t take a second look at whether or not that is the right thing to do,” the vice-president of Buick-Pontiac-GMC Susan Docherty told US industry journal Automotive News this week.

Holden spokesperson Andrea Matthews told GoAuto the company was “looking into those reports” and seeking a clarification on the ute, which is still scheduled to go on sale in the US in the third quarter of 2009.

“We have had no indication from Pontiac directly that there’s any change to our export programs,” Ms Matthews said.

“All I can say is the US market is pretty tricky at the moment, but we believe we’re giving them a fantastic vehicle.”

Ms Matthews said that Holden does not issue production forecasts, but had not scheduled any further cuts since announcing last month another 25 shutdown days at Elizabeth in South Australia. As GoAuto reported at the time, that will cut Holden’s output by around 14,000 units.

In the meantime, Holden has delivered the first batch of high-performance HSV-based 6.2-litre Pontiac G8 GXPs, which are scheduled to go on sale in the US in February.

GM signalled a reduction in Pontiac models in its restructuring plan for long-term viability, which was submitted to the US Congress two weeks ago to justify short-term loans aimed at fending off bankruptcy.

The 37-page GM document notes that Pontiac will serve “as a specialty/niche brand with reduced product offerings”.

According to Automotive News, Pontiac will reduce its current six models to between one and three.

However, while saying that no nameplates are safe, Ms Docherty provided some encouragement for Holden workers when she indicated that Pontiac will not spend “tons of money on product development” and may in future rely on imports such as the Holden-built G8.

“The G8 is a perfect example,” she said. “With a minimal amount of investment, we are able to have a unique entry.”

With sales down 41.3 per cent, GM is cutting domestic production by more than half compared to a year ago and – for the first time in more than a decade – plans to build fewer cars than rival Ford.

GM has scheduled temporary shutdowns at 20 plants in the US, Canada and Mexico for the month of January, cutting its total production to 425,000.*

Chrysler and Ford have also announced widespread shutdowns, including 10 weeks between now and the end of April at Ford’s Canadian SUV plant.

However, no car-maker in the US – or even the world – seems immune from the global sales downturn.

Even sales of Honda’s top-selling small car in the US, the Civic, dropped 29.3 per cent in November, forcing Honda America to cut six production days in Indiana and delay plans to hire a further 1000 production line workers until Civic sales recover.

Honda’s total US production will be reduced by 175,000 units to 1.3 million in the year to March 31 as inventory has blown out from 57 days only three months ago to 113 days.

And global market leader Toyota has announced it expects to post a six-month loss of $2.54 billion to the end of March – the company’s first interim operating loss since 1999 – and later this month is expected to slash its global sales forecast for 2009 by a further 10 per cent to fewer than 7.5 million vehicles.

Toyota has slashed North American production by one-third and this week halted work on its proposed eighth US plant, which was to have started building the Prius hybrid in late 2010.

The Mississippi plant was to have built the Highlander (Kluger) SUV, but Toyota changed that plan in July when faced with depressed SUV sales. However, even the thrifty Prius slumped 48 per cent in November.

In Australia, Toyota says it is reviewing production volumes on a monthly basis, but has assured unions there are no planned lay-offs and production levels are being varied without any major disruption.

There will be no change to Toyota Australia’s planned schedule in December or January, but the daily production rate at its Altona plant will be reduced from 533 cars a day to 510 in February.

“We are experiencing a softening in demand in the market for domestic product and will make some adjustments to our plant workday schedule in the first few months of 2009,” said Toyota Australia public affairs manager Glenn Campbell.

“There will be an extra annual leave day for manufacturing employees at the Australia Day weekend (and) we are also planning at Easter to bring forward some annual leave to enable maintenance, equipment installation and plant development in preparation for hybrid Camry production.”

Just in recent days, car-makers around the globe have been slashing production in response to the worldwide sales slump.

# In Italy, Fiat has put its 48,000 workers on an almost month-long vacation as it halts production from January 12 due to the lowest domestic sales for the company since 1993.

# Daimler’s main plant at Sindelfingen in Germany will work only three-day and four-day weeks from January 12 until April, and the company is looking at shorter work weeks at its other German plants.

# Skoda extended a two-week shutdown at its Czech base this month until January 11 and, according to a union chief, will cut 870 employees next year.

# Ford will suspend production of the Focus at St Petersburg in Russia for one month until January 21.

# Renault, which previously announced 6000 job cuts (mainly in France), will stop production at its Moscow plant for two weeks this month.

# Subaru will halt production for six days up to January 19 at its US plant in Indiana, where it produces the Camry for Toyota as well as the Legacy (Liberty), Outback and Tribeca.

# Mitsubishi will close its US plant in Illinois, which builds the Galant sedan and Eclipse sportscar, for seven weeks from February 16 to April 3.

# GM’s joint-venture plant with Suzuki in Canada will shut for six weeks in January and February instead of the previously announced three weeks.

# Scania is halting European production for a month as fellow Swedes Saab and Volvo continue to slash workers and production in their attempts to stay alive.

# Kia will cut shift times by about 40 per cent at its Gwangju plant in South Korea where it builds the Sportage SUV and Carens MPV.

# Porsche has planned seven days of factory closures in the next few months.

# Volkswagen is considering a three-week shutdown at Wolfsburg over Christmas while Audi will also cease production for a few days longer than usual.

# Workers at VW’s ailing Seat subsidiary in Spain will work between seven and 29 days less in the first half of 2009.

# Toyota’s joint-venture in India, Toyota Kirloskar Motor, will cut production at its Bangalore plant by 30 per cent this month.

* for the month -worldwide, as far as this writer can tell. Original 12/2 forecast was 600,000 units built in NA, 1,697,000 worldwide for the quarter
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