Holden V6 engine push
BY DAVID HASSALL | 10th Jun 2008
Speaking at the announcement last Friday that the outdated Family II engine plant at Fishermens Bend will finally close at the end of 2009, GM Holden’s chairman and managing director Mark Reuss said that the focus was now on expanding the company’s modern $400 million Global V6 engine plant.
Holden’s decision to axe the long-running and very successful cast-iron four-cylinder Family II engine – which started production here in 1981 – came about because of dwindling orders from overseas customers, mainly Daewoo in South Korea, which is building its own more modern alloy engines.
Appearing understandably uncomfortable announcing the axing of a plant employing 531 people just four months after arriving here – a task he may have thought he had left behind in North America – Mr Reuss said that $40 million has recently been invested to upgrade and expand V6 production.
He indicated that the dedicated LPG Commodore and other new technology was consequently “on the very near horizon”.
While the Ford Falcon is the only locally-built dedicated LPG vehicle, Holden currently sells a dual-fuel Commodore that is modified off-line by Holden Special Vehicles in Melbourne.
Despite the fact that the LPG Commodore accounted for only about five per cent of VE sales last year, Mr Reuss said the focus was now on the “huge technological development potential” of the V6 engine, which he described as the “highest technology engine produced in GM”.
“That is why, having initially invested $400 million (building the plant four years ago), we have recently spent a further $40 million on increasing capacity and preparing for the new technologies of the very near future. We are looking at ways to leverage that investment and the additional capacity.
“As a first step, we are preparing to introduce a range of fuel-saving and alternative fuel technologies into the products that we build. V6 engines capable of running on either ethanol or dedicated LPG will be the first additions to our current line-up, with more to follow.
“GM Holden intends to play a leading role in promoting the alternative fuels and technologies that will play an increasingly important role in all of our futures as we look to reduce our reliance on foreign oil. Our V6 engine manufacturing facility here at Fishermens Bend will have a key part to play in that.”
“Over the next three years… I’m not going to give you exact dates on our product plans, but over the next three or four years you’re going to see an infusion of technology into the engines that we use in our local products – the V8, and the V6 that we produce locally in particular – of ethanol, LPG and other technologies like active fuel management here on the very near horizon, so look for that,” said Mr Reuss.
“That’s part of the strategy. We’re going to look to increase production here on our local V6 and we’re not through with seeing how many people and how much volume with those technologies that we’re going to yield. It’s going to be significant for us, I think. Last month we were again the best-selling car in Australia with the Commodore, so we’re looking to keep that going.” Holden already builds direct-injection, turbocharged and ethanol-compatible V6 engines for export markets and GM Holden manufacturing director Rod Keane commented on Friday that “we look to the roll-out of technologies appropriate to the marketplace and all of those things fit in a timeline”.
Although Mr Reuss did not contradict Mr Reilly on the subject of a diesel Commodore, he believes there are better alternatives available – and his comments suggest he is already an avid reader of GoAutoNews: “Diesel is not something of a silver bullet for fuel economy and cost. If you looked at some of the published reports on the cost of ownership of diesel, you’d find that LPG and other technologies are equal to or better with the current prices of these alternative fuels.
“If you want to look to the future, with ethanol and the unleveraging of foreign oil in this country, those technologies become much more compelling place in the market here than diesel does for many different reasons.
“Hybrid is one of the things that GM does really well globally. Hybrid is one solution (but) it’s not a particularly economical solution in current form on an incremental cost standpoint. Within the GM portfolio of technology, we offer things that are cost-effective and pay back quickly. There’s lots of different kinds of hybrids, too… “The journey has begun here with infusing our local V6 … with everything we’ve got from a technology standpoint.” Holden last year exported 38 per cent of its V6 engine production (which amounted to more than 132,000 units) to China, Thailand, Korea, South Africa, Sweden, Austria, Italy and Germany.
That total was just short of four-cylinder Family II production (136,000), but the cast-iron engine has been dropping rapidly in recent years and the old plant has recently been running at one one-third capacity.
Originally built to supply the Holden Camira in 1981, the Family II engine then found GM customers around the world and continued running at record levels well after it was last installed in a locally-built car (the Vectra in 2000).
It has earned billions of dollars for Holden, with 4.4 million of the engines being exported over the past 27 years from a total production of 4.8 million.
Former Holden chairman Denny Mooney told GoAuto last year that the plant was on borrowed time, but that the company would keep building engines as long as orders kept rolling in.
When GM Daewoo announced a year ago it was developing a new family of four-cylinder engines in Korea that would be produced in China from 2009, the writing was on the wall for the Family II engine.
Although Mr Mooney told us in June 2007 that the Fishermens Bend plant would likely cease production by 2010, Mr Keane said that the final decision was made at 8.00am on Friday.
GM Holden was criticised in some circles for making the announcement late on a Friday afternoon before a long weekend to reduce the amount of coverage the closure would receive.
Mr Keane said that the engine had lasted much longer than its anticipated 20 years, but that time had caught up with an old cast-iron engine and manufacturing plant, which could not be upgraded to build modern alloy engines.
“Export markets have sustained the operation long past our original expectations,” said Mr Keane on Friday.
“In this business, technology is always moving forward. Customers, particularly in Asia, are designing next-generation vehicles around state-of-the-art engines of their own. As these plans have firmed, and with no new customers, this future lack of demand has led us to today’s announcement.
“It may seem ironic, but we do see good demand for the engine in the next 18 months. But, as the customers introduce new products of their own, this demand will quickly evaporate towards the end of next year.” Both Mr Keane and Mr Reuss expressed the hope that some of the 531 redundant employees would be redeployed to the V6 engine plant if production could be ramped up in the next 18 months.
Mr Reuss admitted that, while the plant closure had been expected, it was a difficult task to perform.
“This is not the sort of announcement you want to have to make as the new MD after only a few months on the job,” he confessed, “but it was a decision that’s been anticipated and was inevitable once we were advised by our customers that their requirements for the engine were coming to an end.”