General Motors’ Australian unit Holden is to end production of its GM Europe-designed Family II, four cylinder cast iron engine line at Fisherman’s Bend, Melbourne, in the final quarter of 2009, putting 531 direct jobs – including those in a foundry which will also close – at risk.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Holden has made the engines for 27 years, launching production initially for the European Vauxhall Cavalier and its own version of GM’s ‘global J-car’, the Camira, in 1981. The J-car was also built as the Opel Ascona and Isuzu Aska and under a variety of brands and nameplates in the US though not all used the Opel-designed Family II engines.
The automaker said production at its global V6 engine facility in Port Melbourne would not be affected, adding it plans to expand the range by adding fuel-saving and alternative fuel technologies to increase domestic and export sales.
Over 4m Family II engines have been made in Australia and all were exported from 2000 onwards. The engine is now shipped only to China, Thailand and Korea.
GM Holden chairman and managing director, Mark Reuss, said: “Every product has a lifespan and Family II is an older cast iron engine which has been around now for 27 years. It has served GM well but is now coming to the end of a very long and successful life.
“With reducing customer demand, recent years have seen the Family II plant running at less than 50% capacity.
“Our remaining markets for this engine are all overseas and our export customers have advised us that with newer and more technologically advanced four cylinder engines available within GM, they do not require production from GM Holden beyond the end of 2009.
“While that means we still have orders for the engine for the next 18 months, we had always promised to give our employees as much notice as we could once a decision had been made to end Family II production.
“Going forward, we will be focusing our business efforts on developing new domestic and export opportunities around our advanced global V6 engine plant particularly in the areas of alternative fuels and fuel-saving technologies.”
Reuss has hinted to local media that Holden could eventually make a smaller car than its current Commodore line and has shown ‘concept’ models of a car dubbed ‘The New Torana’ at motor shows. The Torana was a long-running small and then mid-sized model, originally a ‘localised’ version of the 1967 Vauxhall Viva, that preceded the Camira.
Holden’s executive director of manufacturing, Rod Keane, said: “Our employees have been aware for some time that this product was reaching the end of its technological life. Even so, this is an extremely difficult announcement to make today as people and their families will be affected.
“Our people have been assured we will be doing everything we can for them to minimise the impact and we’ll investigate every redeployment possibility.
“We have exciting plans for our Global V6 plant and one of our aims will be to grow this part of our business to absorb some of those who might be impacted by this decision.”
Holden employs about 6,500 people of which 3,100 are based in Victoria state. The majority of those work in Port Melbourne which is home to GM Holden’s engine operations, design and engineering centres and head office.
The first shipments of Family II four cylinder engines, manufactured at Fisherman’s Bend, were sent to the United Kingdom in 1981.
By 1983, markets also included West Germany, South Africa and (in Camira assembly kits) New Zealand. Exports to South Korea commenced in 1987 and the one millionth export was reached in 1988.
By the time the two millionth export engine was produced in 1994, the facility was servicing a customer base that included South Korea, Taiwan, Indonesia, Germany, India, Egypt, South Africa and the UK.
The three millionth Family II engine was shipped out in 1999, by which time Holden engine and component exports had generated more than A$3bn in revenue.
In 2003, Holden began exporting global V6 engines built in a new A$400m engine plant at Fisherman’s Bend. Recently, it invested a further $40m expanding production capacity.
The facility currently exports V6s to GM and external customers in countries including China, Thailand, Korea, South Africa, Sweden, Austria, Italy (Alfa Romeo) and Germany.
In 2007, Holden’s engine operations at Fisherman’s Bend built around 136,000 Family II engines, all for export, and about 132,000 V6 engines of which 38% were for export.
