AUSTRALIA: GM Holden "highly unlikely" to prop up Autodom with more cash
GM Holden has a 10.2% share of the Australian market
General Motors Holden (GMH) says it is "highly unlikely" it will inject any further cash into Australian supplier, Autodom, as administrators look to find either a new buyer or carve the stamping operator up.
Both Ford and GMH pumped US$6.8m into Autodom in order to keep the component maker afloat and whose Woodville plant in Adelaide, South Australia, also makes the under-dashboard cross rail for the Cruze and rear sub-assemblies for the Commodore models.
A spokesman for General Motors Holden, speaking to just-auto today (23 November) from Melbourne, said it was "highly unlikely" Detroit would make any more finance available to Autodom and expressed wariness as to any future bailout for Australian suppliers.
"Could it happen with other suppliers? - I hope not," the GMH spokesman told just-auto. "I would not want to set a precedent - the only reason we did it was the finances of the Woodville facility were quite healthy.
"There will probably be no further Holden cash going in - we would hope to recoup the majority of it from the sale of the business."
GMH says both US automakers technically "bought" Autodom's debt and that the financial lifeline not a loan. The money will be paid back when either Autodom is sold or broken down into separate business units.
"The first thing that needs to happen is Autodom needs to be restructured by the receivers and which elements can and should survive," said the GMH spokesman. "At that stage, the receivers will sell off the viable parts of the business.
"The Woodville facility remains in our plans and it would be in our interest to keep it. We need to reduce the cost in our vehicles, but it is in our interests to support Australian manufacturing."
Attention is now turning to Autodom's administrators, Macks Advisory, who this week cancelled the Annual General Meeting after an application to the Australian Securities & Investments Commission for an extension.
GMH already ships in a number of CKD components to Australia and while the automaker's spokesman insisted there was no question of leaving Autodom, efficiency needed to be improved.
"We are certainly not looking to move away from Autodom, but it is a message to industry they need to be competitive to survive in this environment," said the GMH spokesman.
"Autodom did not really see it coming."
General Motors Holden currently has a 10.2% share of the Australian market, which is forecast this year to see record sales of 1.1m, although due to the arrival of other major brands apart from Ford, Mitsubishi and Toyota, that is down from 58%.
The Detroit-owned operation added if Toyota sales for Western Australia were taken out - the State has huge mining business - it would be "neck and neck" with the Japanese manufacturer.
"10.2% for a brand that primarily does passenger cars is as good as it gets," said the GMH spokesman.
Autodom's Australian Manufacturing Workers' Union was not immediately available for comment.