Holden's other near-death experience

GKW · **Posted:** Sat Feb 01, 2014 11:10 am

Holden's other near-death experience

Tony Davis
Published: February 1, 2014 - 3:18AM

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Long before the current meltdown, there were at least two occasions when Holden came within a whisker of shutting its Australian plants.

The first was in 1986, when the Commodore was being outsold by the Falcon, and General Motors-Holden's Ltd, as it was then known, still had the bloated structure of the glory days when it commanded more than 50 per cent of the market.

It was said that, when the financial books were balanced, the case for keeping Holden as a manufacturer was only a few hundred dollars stronger than the case for dragging it behind the shed and putting it out of its misery.

Under extreme lobbying from Down Under, the American parent provided more funds. These and various government handouts allowed it to fight another day.

By 1989, sales had improved, but the company was still bleeding.

This time, GM Corp's solution was to push Holden into a marriage with Toyota Australia. Although largely written out of both companies' histories, it was more than a joint venture. It was almost a full-blown merger and, early on, seemed suspiciously like the first step towards the Japanese devouring the unprofitable Holden. The chief executive of the new combination was, after all, to be Toyota's Nobuo ''Norman'' Itaya.

Both companies denied it was anything but a partnership of equals as they threw all their manufacturing assets and goodwill into a new company called United Australian Automotive Industries (UAAI).

The new concern controlled both passenger-car brands and, with it, 40 per cent of the market. It was going to be more efficient and strategic and synergistic and all the things promised for such moves before they inevitably melt down amidst mournful howling and brutal recriminations.

The first phase led to products from Toyota's Australian factories being ever so slightly restyled and rebadged as Holdens. That gave us the unloved Camry-based Apollo, and the equally unloved Corolla-based Nova, while the Commodore was given a Japanese-badged twin.

This was the Toyota Lexcen, named after Ben Lexcen, the designer of Australia II, the America's Cup winning yacht.

The name was one problem - the company was trying to establish the new Lexus luxury brand at exactly the same time - but there were plenty of other issues to choose from.

Sticking different badges on the best-known (and by then best-selling) car on the market was greeted with derision from punters. They wouldn't buy a Lexcen without a huge discount and, ideally, a set of Holden badges included, so they could disguise it.

Maybe over time these things could be made to work. However, there was a much bigger issue.

The culture within the local companies has often been likened to football teams. Toyota and Holden people still saw each other as the enemy. Only a merger with Ford Australia would have caused more deep-seated, barely suppressed rage within Holden.

As it was, they saw the Apollo and Nova as boring, characterless fridges on wheels.

Meanwhile, you should have heard the off-the-record bile about the quality of Holdens from Toyota executives.

The staff of each brand, from designers and engineers to sales people, considered the blow-in models an embarrassment and had little interest in helping shift them.

Since both companies had specifically left their light commercial vehicles outside UAAI, they put a new focus on flogging them. No profit sharing there.

Whenever there was a problem with the workings of UAAI - ie, every day - senior management on both sides lobbied their head offices to unravel the combined structure. The fact that this unravelling would be complex and expensive didn't matter.

In 1996, the UAAI concern was quietly buried and the two brands separated. They could once again go for each other's throat entirely on the record.

This story was found at: http://www.smh.com.au/drive/motor-news/ ... 31q5u.html

FAVSSS · **Posted:** Sat Feb 01, 2014 2:02 pm

Yeah, its been coming for a long time

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