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Second car line ‘saved Holden’

Praise: SA deputy premier Kevin Foley says Holden dodged a bullet by convincing Detroit to go ahead with local small-car production.

SA minister claims Holden cheated death with mix of nifty footwork and federal aid

11 Aug 2009

HOLDEN would have died if it failed to secure a second car line, a prominent state minister has claimed.

South Australian deputy premier and treasurer Kevin Foley spoke at last week’s V6 engine announcement about how close Holden came to death, while GM Holden chairman and managing director Mark Reuss has declared the company “never wants to be in that position again”.

“It has been a near-death experience for Holden, but it has bounced back in the most aggressive and the most successful manner possible,” Mr Foley said.

He singled out Mr Reuss and federal industry minister Senator Kim Carr for praise, saying he doubted Holden would still exist without them.

“If it had not been for the stroke of luck that an industry minister like Kim Carr came along with the ability to secure half a billion dollars in funding out of his federal colleagues, and the arrival of somebody as talented and as driven as capable as Mark Reuss, we would not be here today,” Mr Foley said.

“You have a managing director in Mark Reuss who has been able to convince Detroit, in its darkest days, to invest in a new vehicle in Australia – an incredibly remarkable achievement. I’m still not sure to this day how Mark was able to pull that off, but pull it off he did.”

 center imageLeft: A sketch of the forthcoming Holden small car.

Mr Reuss, who will return to the US to take up his new role of GM global engineering vice president in Detroit at the end of this month, told GoAuto it wasn’t clear exactly how close Holden came to failing, but indicated the company had been in a precarious position after its exports dropped 70 per cent and its parent company headed towards bankruptcy in June.

“No one has done this (GM going through chapter 11 bankruptcy) before on a scope with our global operations, so you don’t know, but you leave nothing on the table to prevent anything from happening to an entity like this and that’s what this team did,” he said.

“We left nothing on the table and that is why you are seeing re-investment projects, you are seeing the new car and you are going to see exports programs come back to that plant, you are going to see things that we work incredibly hard on come to blossom here in the next few years because we never want to be in that place again.” Asked by GoAuto if there was a point at which Holden might go under, Mr Reuss said: “No, I never let myself mentally get there because the minute you get there, this 6500-people team, which is relying on you, see it, so no, no way.”

Mr Reuss said the previous production plan, which meant Holden’s Adelaide production line was overly reliant on exports, was risky.

Mr Reuss and Mr Foley commented on Holden’s survival before news of a $200 million line of credit made available by the Australian Export Finance and Insurance Corporation after Holden requested surety from the federal government (see separate story).

Holden will begin producing a small car alongside its large car and ute range at its Elizabeth plant from the third quarter of next year.

Based on the GM’s Delta II platform that spawned the Cruze, the new car will be available as a sedan and a hatch.

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