Content provided in partnership with

Automotive Industry

Holden is golden: GM rediscovers it's roots in a small company with a loud roar - Cover Story - Brief Article

Automotive Industries, July, 2002 by Andrea Wielgat

There may be an automotive Utopia in the land down under.

A place where product is key and quality is priority. A place where low-volume vehicles make high profits and workers aren't afraid to voice their opinions. A place where seven vehicles are built off the same platform and at the same flexible plant

Is this an automotive heaven?

No, it's General Motors.

Holden, GM's Australian subsidiary; has quickly become the company to emulate. With strong products, increasing market share and rising profits, Holden has gained favor with GM'S top brass who say the world's No. 1 automaker has a lot to learn from its small operations in Oz.

Most Popular Articles in Autos: Service Slants; 2007 utility vehicle buyer's guide: Side-By-Sides are popular; here's who ...; Transmission considerations: beyond the manual gearbox; Buell Motorcycle engineering, innovation, & dedication: in an industry ...; 100 + 10: America's oldest automotive magazine celebrates its 110th year ...; More »

"In many ways, Holden today is a microcosm of what we want GM to be," says Bob Lutz, one of Holden's biggest fans and head of product development for GM and chairman of GM North America.

Thanks to Lutz, starting next year Holden will send a version of its Monaro coupe to the U.S. to be sold as the much-historied Pontiac GTO. Other Holden vehicles will eventually follow -- each with big, throaty engines -- that take customers back to the days when GM muscle cars crowded the streets.

A product-lover through and through, Lutz admires more than just Holden's vehicles, he covets Holden's ability to do business quickly yet creatively in the big bureaucracy of GM.

"GM will leverage Holden every way it can and learn from its practices and processes," Lutz has said. "There is great teamwork here, tremendous product, outstanding and flexible manufacturing with solid quality. There is everything GM is striving toward and will achieve."

Those are big compliments for a company with less than 8,000 employees making only 132,390 vehicles a year.

"We have this philosophy of staying agile," says Peter Hanenberger, chairman and managing director of Holden. "Keep the breakeven low and don't get bogged down in the decision making. Make it fast. Let things happen."

That philosophy has turned into a culture that has enabled Holden to develop some of the best vehicles in the entire GM family and turn a profit for their parent company while gaining three points of domestic marketshare in the last three years.

Holden adapted that culture from a long history of carmaking and from the hard times along the way, Hanenberger says.

The Holden people learned to stay alive following a difficult time during the late 1980s and early 1990s. The company entered an engineering and design joint venture with Toyota Motor Co. just to stay alive. It forced people into survival mode with much belt-tightening along the way. When things brightened and the Toyota JV ended that survival courage and company pride stayed.

"We did our own cars again," Hanenberger says. "We were working on our own destiny with that kind of spirit of survival. I think that's what makes Holden so different."

What also developed was a plan to concentrate on making exciting, profitable products. To do this the company adopted a policy of building several vehicles off the same platform and production line. The platforms can be stretched and 6- or 8-cyl. engines can be installed into the vehicles.

Crucial to this equation is Holden's manufacturing philosophy. The company's plant is set up with a very short supply line so the workers can be very flexible.

"All of our equipment is built with very extreme flexibility," Hanenberger says. "We are doing seven bodystyles. Soon we are going to do eight."

Line workers are also actively encouraged to be involved with the production process particularly when it comes to quality. And Holden has made improvements in quality, says Hanenberger, by changing the thinking in the plant.

"We have made huge improvements by doing some big culture changes of how people perceive quality," he says. "It's quality not quantity."

Management encourages employees to stop the line if there is a quality problem. In fact, the line was stopped for two days last year until a flaw was fixed.

"It's all about quality. We all support it top down. Once you have this as a culture people become very brave because they know what kind of crap they sometimes build.

Once they have the opportunity to not let it happen they won't let it happen. That's the kind of culture change we made here in our organization," Hanenberger says.

Holden is planning to invest $2 billion in the plant during the next five years. Much of the money will be used for an expansion of the company's product portfolio including new models in the Commodore and Statesman Caprice lineup. It will also build a plant for 6-cyl. engines.

That investment money is coming from within Holden and not from GM.

"We are more or less financing our own destiny," Hanenberger says. "In terms of profitability we are doing quite good."

That profitability comes right back to product, he says. Once you have the right product people are going to buy it because they want to have it, he says.

Those products are a lineup of primarily premium, high-powered stylish vehicles -- vehicles that caught the eye of Lutz.

Automotive Industry

Holden is golden: GM rediscovers it's roots in a small company with a loud roar - Cover Story - Brief Article

Automotive Industries, July, 2002 by Andrea Wielgat

Find Research Guides for:

Find Featured Titles for: Health

Most Popular Articles in Autos

Most Popular Publications in Autos