16 January 2014
GM adds salt to the wound
GM execs Mark Reuss (R), President General Motors North America, Alan Batey (C), Head of Sales North America, and Dan Ammann (L)
Like a marital split, General Motors (GM) has moved on, while its former partner Holden is left to ponder what went wrong with the relationship.
Despite past promises of loyalty and longevity, GM has left home and has a new love interest in its expanding Chinese and US markets.
While GM's Holden operation is being packed up, there have been some hurtful home truths and painful signs that Holden's ex is doing rather well for itself.
Today in Detroit, General Motors announced plans to begin paying a quarterly dividend for the first time since 2008.
GM will begin paying a common stock dividend of 30 US cents per share in March, according to a statement released after Wall Street's stock market closed Wednesday morning.
GM chief financial officer Dan Amman said in the statement that an 'ongoing payout' was possible thanks to the company's fortress balance sheet, substantial liquidity, consistent earnings and strong cash flow.
This return to shareholders is consistent with our capital priorities and is an important signal of confidence in our plans for a continuing profitable future, he said.
Just to rub it into the wounds of its Australian ex, GM said it sold 9.71 million cars last year, a four per cent gain.
Sales grew seven per cent in the United States and 11 per cent in China, the world's leading markets.
There were signs yesterday that GM had already forgotten its former lover.
News Corp's motoring writer Joshua Dowling reported stinging comments made at the Detroit Motor Show by Stefan Jacoby, head of GM's international operations.
Jacoby said Holden's decision to cease local production from 2017 was inevitable and federal or state government policies had no impact on the decision.
The decision to close the factories would have happened anyway, he said, dismissing the proposition that further subsidies would have saved Holden's South Australian plant.
What then of all those romantic dalliances in recent years where State and Federal politicians joined with Holden executives to declare 'we're here to stay' after promises of massive subsidies?
And the workers? The hapless children of this flawed relationship were told last year that if they took a pay freeze, the car maker would be able to stick around.
Sorry kids, there's no Santa.
Just as the family is getting ready to move on, Holden keeps saying that even though Daddy's leaving, he'll still be around in one form or another.
First there's the ad campaign, saying that Holden is still as Aussie as a meat pie and will still be selling cars to us as some sort of personal favour.
Today, again in Detroit, one of those GM guys who spent some time in Australia running Holden, Alan Batey, said it would be illogical to axe the Holden brand in favour of Chevrolet badging when Australian manufacturing ceases in 2017.
Batey was managing director of Holden between 2009 and 2010 and was recently promoted from global Chevrolet boss to executive vice-president of GM North America.
Holden is such a strong brand, he told media at the motor show.
No, at the end of the day we've seen other brands that have moved out of manufacturing in Australia and their presence has remained strong, so no, I don't see Holden (going).
If you were starting out with a clean piece of paper it would be different, but you're not. You're starting out with a brand that is Australia's own. I don' t think it would make real sense to put bow ties on the front of Holdens.
GM executives also confirmed in Detroit this week that the Commodore nameplate will continue beyond 2017, switching to a fully imported model.
Asked for his thoughts on the marital split, Batey was reflective, telling goauto.com.au: Tough; (I) know everybody, loves the brand, I had a wonderful time for four years working for Holden.
And so I'm disappointed and sad, but the brand stands tall, we're going to keep a great presence in the market, we'll maintain our design capability down there under Mike Simcoe's leadership, there's a lot of talent that we want to leverage.
Holden will remain a very important brand in our portfolio, but from a personal perspective when you close a chapter like local manufacturing, it's a tough moment.
So Daddy's gone, the kids have no pocket money and the other half is trying to move on but the pictures on the mantlepiece seem glued to the spot.
In a moment of post-separation venom, perhaps the jilted half might be allowed to ponder why it is that Daddy reckons that no amount of government money would have helped when its only six years ago that he was bailed out by the US government with a $US50 billion ($A55.38 billion) cash injection.