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Holden answers the FAQs on the GM Chapter 11 bankruptcy’s effect on Holden
2 Jun 2009
GM Holden supplied these ‘frequently asked questions’ and answers to explain the impact on Holden of GM’s Chapter 11 bankruptcy filing in the US: How is Holden affected by this filing? Holden is not directly included in or impacted by the US court proceedings.
Does this mean Holden is going out of business? No. None of GM’s operations outside of the US are included in the US court filings or court-supervised process, and these filings have no direct impact on GM’s plans and operations outside the US.
But doesn’t bankruptcy mean the end of a company? Chapter 11 in the US is not like Australian law. It is a highly structured, court-controlled process that allows companies to continue trading while they reinvent their operations. Unlike the systems of many other countries, the US chapter 11 process is focussed on the preservation and reinvention of a company’s business. It does not mean ceasing to trade.
What happens to Holden once New GM emerges from Chapter 11? Holden will be an important part of the New GM. We will maintain our focus on product programs and activities. That means technology improvements to our best-selling Commodore range, launching the all-new Holden Cruze and the introduction of our locally-built fuel efficient, four-cylinder small car next year.
What happens to Holden’s operations during GM’s chapter 11 process? Holden continues to run full operations at Elizabeth and Port Melbourne, producing cars for our 300-strong independent dealer network. We don’t anticipate this US action will have any direct impact on our local workforce, dealers or Holden suppliers.
Will there be any impact on your workforce? We don’t anticipate this decision will have any direct impact on our workforce, dealers or Holden’s suppliers. Employee pay and benefits will continue. Any decisions related to Holden’s staff would be made by Holden, not as the result of any overseas action.
Are your dealers affected? Holden dealers, warranty and customer support operations are unaffected by the US filing.
Will financial institutions continue to provide credit to Holden dealers to finance sales in Australia and New Zealand? We do not foresee any interruption with regards to dealer or retail financing.
What happens to Holden customer warranties? Holden warranties are not affected by this announcement.
Does GM’s announcement put a stop to any Holden projects? No. We continue our development work on fuel-saving technologies and future models. Work has already commenced preparing our Elizabeth plant to build our all-new, fuel-efficient, four-cylinder small car. The project remains on track with production to commence in the third quarter of 2010. Our funding and capital for that project is locked in. We have also just launched the new Cruze and continue developing future models of Australia’s top-selling car, the Commodore.
Will Holden’s suppliers get paid as a result of this decision? Holden supplier payments remain unchanged.
If Holden is not directly impacted by this decision, why are you issuing statements about it? We wouldn’t normally issue statements to highlight that nothing has changed, but we appreciate that customers will naturally ask questions about this sort of action in the US.
Do Holden operations have access to its technology patents even though GM had filed for chapter 11? Despite the filing, GM Asia Pacific – and that includes Holden – will have continued access not only to the intellectual property developed in AP, but also to the intellectual property developed elsewhere in the new global GM organisation.
What will happen to Holden’s management team? Will it remain in place? We do not foresee any changes to Holden’s management.
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