Speculation Holden Commodore to disappear

Tim Lee, the Shanghai-based president of GM's international operations was quoted in reports in the business press today, which speculated that the Holden Commodore would be phased out in favour of a ‘global’ car.

Lee reportedly said while visiting Melbourne that Holden had been one of the car giant’s strongest sellers in local markets, but that the GM business plan – like that of Ford – was moving towards global platforms.

However he said that GM would maintain "full-line capacity in Australia with designing and engineering, building and selling vehicles", according to reports in the Australian Financial Review and other business media.

The reports also quote Lee as saying that the "In the body shop the best way to do that is to have flexibility and to build two architectures and platforms. Maybe a mini car and a small car or maybe a small car and a compact car, or maybe a compact car and mid-sized car."

"We're going to build a s**t load more great Commodores,” he was quoted as saying.  “It’s still an outstanding motor vehicle and one that we intend to produce for a long time.  But if you look at the motorway here in Melbourne, you see a lot of small cars. You see a lot of more fuel-efficient vehicles on the roads than Commodore.”

The comments come after the release of a South Australian report, detailing that Holden's Elizabeth car manufacturing plant alone is worth more than $1.5 billion to the state economy each year and closure would lead to the loss of up to 16,000 jobs.

Premier Jay Weatherill released the report last week, after the State Opposition called for a cost-benefit analysis before the handover of more taxpayer money to the company. The study by University of Adelaide Business School head Barry Burgan, dated February 4, was handed to the state Manufacturing, Innovation, Trade, Resources and Energy Department. It does not comment on the merits of further taxpayer backing.

Holden is in negotiations with the state and federal governments over a bailout to keep the Elizabeth plant operational beyond 2016 and economists have forecast a $200 million price tag. The Federal Government will contribute the bulk of the funding.

Associate Professor Burgan's report finds there are 2700 people directly employed by Holden in Elizabeth. The company purchases $530 million of goods from ``core'' local suppliers, supporting 5610 jobs and prompts extra employment in retail, transport, construction and other manufacturing. But the report says closure at Holden would also lead to some growth in other industries and reduction in worker wages as supply of labour and resources currently invested in auto manufacturing shifted.

``Note that this report does not consider the issues around what is required to underpin the longer term sustainability of the operations at Holden,'' Prof Burgan writes. ``Nor does this analysis consider the full gamut of benefit and cost considerations in terms of policies to mitigate the risks identified.''

Opposition industry spokesman Steven Marshall said the Government had spent taxpayer money to deliver a report backing its political argument. Taxpayer support for car making needed to be based on a full cost-benefit study, he said.

Mr Weatherill told the South Australian Parliament the Elizabeth plant had long been ``the cornerstone of our state's industrial strength''.