General Motors is merging its Holden and Saab operations in Australia.

The announcement comes just a few days after General Motors Europe said it would build the next-generation Opel Vectra and Saab 9-3 in one factory rather than separately as at present, raising fears amongst unions and local politicians that either the Saab plant in Trollhattan or the Vectra plant in Russelsheim would be shut.

GM's two wholly owned subsidiary operations in Australia, Saab Automobile Australia Pty Ltd (SAA) and Holden Ltd, will integrate into a single business entity from 1 January 2005.

"The local integration, which is consistent with General Motors' approach around the world with Saab operations, will achieve savings through economies of scale and common back office systems such as finance, information systems and fleet management," Holden said in a statement.

The integrated organisation, Holden Ltd, will be housed next year in Holden's new headquarters in Port Melbourne, construction of which will be completed in the first half of 2005. Saab currently operates from separate premises in Melbourne.

Holden said an "exclusive" Saab team will operate sales, aftersales, marketing and public relations functions for the brand.

"The integration will be invisible to customers and have no impact on customer, sales, service and warranty operations," the statement said.

The integration, plans for which have been discussed publicly for more than a year, was confirmed on Tuesday by Holden's head of sales and marketing, Ross McKenzie, and SAA managing director, Tony Jennett.

It follows similar approaches in other markets, following GM's acquisition of the global Saab operation in January 2000, after previously taking a 50% stake in 1990.

"This integration has a simple reward - business as usual outside with efficiency and effectiveness gains inside," McKenzie said.

"The integration will help both brands to prosper while remaining independent in day-to-day operations. This is a commonsense decision with clear outcomes and benefits."

Jennett said the efficiencies would help grow the Saab brand in Australia, and New Zealand where Saab Australia has been distributor since taking over from the independent Giltrap group in 1993.

The statement said Saab would remain a distinct operation within the new entity and the new structure would expand opportunities for Saab employees.

Jennett said Saab Australia employees will be given first consideration for positions within the new structure, which will be finalised later this year.

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