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Holden’s future shaken by Devereux departure

Holden’s future just got that more shaky, as parent General Motors announces that the Australian unit’s Managing Director Mark Devereux is being transferred out. As of 1 November, Devereux takes on the role of GM Consolidated International Operations (CIO) Vice President – Sales, Marketing and Aftersales, reporting to Stefan Jacoby, Executive Vice President of CIO. Devereux will continue to carry out his Holden responsibilities until the end of the year. By this time, GM expects to announce a replacement.

Mike Devereux, Holden

Mike Devereux

Jacoby has explained that Devereux’s “extensive international and cross-functional knowledge” of the business is needed at the CIO division. He started at GM’s Canadian operations at the St Catharines plant, later working at GM Middle East before joining Holden in 2010. At the time of his appointment there, Holden had been running through managers – Devereux was the fourth MD in four years.

Devereux has complained in the past of the high cost of manufacturing in Australia, noting that building a Holden car in Australia costs AUS$3,750 (US$3,440) more than it does elsewhere in the world. This high cost was a driving factor in Ford’s decision to end production in the country next year.

Devereux, and his predecessors, have not been shy in seeking financial assistance. Over the past 12 years, Holden has received AUS$2.17bn in state and federal government aid – more than either Ford or Toyota, the other two passenger car manufacturers in the country. Holden is currently in bailout talks with the government, addressing how and to what extent the government intends to support the company.

While Holden has continued to struggle despite the financial assistance, Devereux has repeatedly denied plans to end production. Workers are doing their bit to keep the operations from folding. Earlier this year they agreed to a wage freeze and other cost-saving labour concessions which should improve the cost competitiveness of Holden’s Elizabeth plan by around AUS$15m per year.

While the change in leadership has left many questions regarding Holden’s future unanswered, the company is keen to emphasise that it is business as usual. A company spokesman has confirmed that plans for additional government assistance remain in the works and talks are ongoing.  These negotiations are expected to introduce a stipulation regarding Holden’s export strategy.  “There will continue to be a high level of assistance to the motor industry, but we expect the motor industry in return for that high level of assistance to provide us with a reasonable indication of how it is going to increase volumes, particularly export volumes. I accept that government has a role in bringing this about but I also think the industry has a role in bringing this about,” Australian Prime Minister Tony Abbott said in September.

With Devereux handing over his role in the talks to an as-yet unknown player, the concern expressed by some is understandable.

Megan Lampinen