0 Comments
Holden Factory Deal Dies ? GM and Punch Corporation Confirm End Of Discussions Photo:
 
 
Tim O'Brien | Feb, 26 2016 | 0 Comments

As if it was ever really on, the ‘pie in the sky’ proposal from Belgian tycoon Guido Dumarey and his company Punch Corporation to buy the Holden vehicle assembly plant in Adelaide from General Motors, and to continue production, is now officially off.

The plan, which had both the Prime Minister Malcolm Turnbull and SA Premier Jay Weatherill giving voice to their support, would have seen Punch Corporation secure the facility (with the assistance of the Federal Government through the Automotive Transformation Scheme), to continue to produce a large rear-wheel-drive car for the Australian and near markets.

That plan has now been scotched in a joint announcement by both parties.

A statement by George Svigos, Director of Corporate Affairs, General Motors International and provided through Holden’s local media arm, puts an end to the matter.

“Both parties concluded that a viable business model was not possible for this case. Therefore the proposal will not be taken forward.

“GM and Punch have communicated on this decision,” Mr Svigos said.

While a non-disclosure agreement is in place between the parties, and there will likely be little additional information to shed further light on the negotiations, Mr Svigos said that the challenges were “insurmountable”.

“The challenges to domestic automotive manufacturing in Australia - lack of scale, high production costs, supply base contraction and increasing market fragmentation - persist and cannot be overcome for this business case."

“In particular, the wind down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable,” he said.

Guido Dumarey" class="small img-responsive"/>
Guido Dumarey

A similar statement is expected from Mr Dumarey’s Punch Corporation. For its part, it has some experience in ventures of this type, having successfully taken over an ailing GM transmission factory in Strassbourg for the production of ZF Automatic transmissions.

But this was surely a vastly more complex challenge.

While it sent a flutter of excitement through some in Government, it looked more like a kite on the end of a very long string, despite Mr Dumarey’s reported billions.



The full statement from GM follows:

General Motors and Punch Corporation have undertaken and completed a detailed global evaluation of a proposal from Punch Corporation to continue manufacturing vehicles at Holden’s Elizabeth plant in South Australia.

Both parties concluded that a viable business model was not possible for this case. Therefore the proposal will not be taken forward.

GM and Punch have communicated on this decision.

As discussions have been governed by a Non-Disclosure Agreement, neither party involved is able to discuss details of the proposal, nor the assessment.

The challenges to domestic automotive manufacturing in Australia - lack of scale, high production costs, supply base contraction and increasing market fragmentation - persist and cannot be overcome for this business case.

In particular, the wind down of the supply base following the manufacturing exit of the three existing car makers, and the critical production mass they represent, is insurmountable.

GM thanks Punch Corporation for their proposal. GM will continue to consider Punch Corporation, along with other interested parties, to participate in the sale process of the Elizabeth plant and assets after GM ceases local manufacturing.

Punch Corporation will continue to pursue other business opportunities in the Australian automotive sector.
ENDS.

MORE: Holden | GM | Elizabeth

 
Links contained in this article
TMR Comments

Finance Calculator

Repayment is : $

Latest Comments
 
The size of your tyre is located on the sidewall of your tyre.
It will be similar to the sample below.