New era for GM Holden

AFTER leading Holden during a "perfect storm" of volatile economic conditions and declining sales of its Australian-built cars, outgoing chairman Denny Mooney says it will be years before the company returns to market leadership in this country.

Despite arguing it was in a strong position on the domestic front, and revealing Adelaide was in contention to build an unspecified number of new export-oriented vehicles, Mr Mooney said Holden needed a broader model range before it could outmuscle Toyota in Australia.

"I absolutely think we can be number one," he said. "Our challenge is to fill some of our holes that we have in our portfolio. They (Toyota) still outsell us on SUVs about four-and-a-half to one, but I can tell you that we do have plans to fill our product portfolio, but it will be a few years before we get some of the entries in that we need to.

"The other thing is that exchange rates are really working in their favour – they’re working for all the Japanese manufacturers, they’re all up significantly this year – but that won’t stay that way forever, either." General Motors announced last week that Mr Mooney will be returning to the United States to take up a new management role under the title of vice-president, global vehicle systems and integration.

From August 1, he will oversee GM’s chief engineers around the world and have global responsibility for vehicle systems, which include body, chassis, electrical and so on.

He will be based in Detroit, Michigan, and report to group vice-president of global engineering Jim Queen. "It really gets me back on... all of our product programs, all around the world," Mr Mooney said.

His successor will be GM Shanghai executive vice-president Chris Gubbey, who worked with Mr Mooney on Holden’s WL Statesman-based Buick Royaum export program to China – and who also currently reports to former Holden executive (and now GM China Group president) Kevin Wale.

Now in an even stronger position to determine the future success or failure of Holden’s role as a global source for rear-wheel drive vehicles, Mr Mooney said he saw a promising future for Holden.

"I mention the Camaro, and I can tell you there are other vehicles that will spawn off of this architecture, so I think there is a bright future," he said. "Believe me, I will always have a finger in what’s going on here.

"There are still... numerous other vehicles being considered to come off the global rear-wheel drive architecture. None of that has changed. Timing of some of the vehicles moves around as we kind of adjust our portfolio, but I call that a natural part of product planning."

Left: Denny Mooney with the Pontiac G8 and his successor Chris Gubbey (below).

Responding to a question on whether Holden’s Elizabeth plant in Adelaide would continue to miss out as the production source for global cars – as will be the case for the Buick Park Avenue in China and the Chevrolet Camaro in North America, to name just two – Mr Mooney also revealed that there were new vehicles in the pipeline aimed at keeping the plant fully utilised.

"I can tell you, our current plans have us fully utilised. The Camaro is going to get built in Canada – and I’ll mention it, but can’t get into specifics, there are some other vehicles that are being worked in our future portfolio and, quite honestly, we’re doing some studies and we’re going to try and push Elizabeth to the limit," he said.

"I expect that we’re in good shape to keep us fully utilised... Right now, we don’t have to invest much in our operations – it’s there – now we just need to use them. And the higher rate we can use them, the more it thins your fixed cost.

"I’m very, very confident where we sit as an organisation, not only from a manufacturing standpoint but from a product-development standpoint.

"Probably the thing that I feel the best about is how integrated we are into the global business now, not just from an export standpoint... but also in the product-development arena where we have an engineering organisation that is not only working on our Holden products but doing global products for General Motors like the new Camaro.

"And I think that’s going to be exciting for us here as far out in the future as we can see." Mr Mooney said work was about to commence on the next-generation (and likely smaller, lighter) Commodore, which GoAuto understands could surface as early as 2012.

At this time, a replacement for Cadillac’s BLS compact luxury sedan is also expected to materialise, based on an all-new Holden-developed compact RWD architecture known as "Alpha".

This leaves open the possibility of Commodore being joined by a born-again, all-new Torana, the fate of which Mr Mooney will now be in a position to help determine.

Despite warning it would be a mistake to expect a greater emphasis on China in Australia with Mr Gubbey moving from Shanghai, Holden’s outgoing chairman said he expected the newcomer to create new opportunities.

"I think he’s going to be a big benefit to the operation as we continue to rely more on exports and what I’d say more integrated business within General Motors worldwide," Mr Mooney said.

"I don’t know that there will be any increased emphasis, but China is now the second-largest market in the world – I know I like to export to the US because it’s such a big market and it’s very easy to find slots in that market that can give you good volume – but I have to say China is the second-largest market in the world and it’s great to have a partnership and a business relationship, and I see where Chris can certainly continue to strengthen that and help us find opportunities." Mr Mooney, who was forced to take some drastic action during his tenure – slashing around 2000 jobs at Elizabeth, including 600 last month, and reducing shifts from three to two in 2005 – described his past four years with the company as "clearly challenging". He also said Australia should be able to sustain four vehicle manufacturers.

"I’m proud of the (Holden) team that in what I consider almost the perfect storm of economic conditions for us – with what happened with oil prices and what happened with exchange rates, and the market shifting around, all of that – I look at where we are today versus where we were three-and-a-half years ago, I think the company is in a strong position." Mr Mooney replaced Peter Hanenberger as chairman and managing director of Holden in 2002 and oversaw the development of the VE Commodore and WM Statesman and Caprice.

He was behind a renewed export push that will see the Commodore exported to the United States next year as a Pontiac G8.

He also implemented a new sourcing program for the company that saw it move away from European products such as the Barina and Vectra in order to tap into cheaper South Korean models. One of these is a compact SUV, which is currently in development.

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