GM Holden Took Short Path From Freeze-Out to Pullout

With the benefit of hindsight in 2013, Tony Hyde’s answer was shockingly optimistic.

“If the VE doesn’t sell at least 6,000 cars a month, I’ll regard it as a failure,” GM Holden’s director of engineering said in April 2006 during a 4,700-mile (7,600 km) chassis-validation run across Australia.

As the engineers swapped front struts, Hyde discussed the business case that led to creation of the VE.

The all-new Holden was planned, designed and engineered locally, with no input from Adam Opel, General Motors’ German offshoot that until then had been the starting point for all three Commodore generations since the original 1978 VB.

Hyde, the engineering father of the VE, proudly called his new baby “The car we always wanted to build.”

In less than a decade, that program has fallen from A$1.23 billion ($1.1 billion) to nothing.

The VE never approached the heady numbers of its predecessor, not because the car itself was a failure – far from it. But between the late-1999 decision to go it alone with a new car, to the launch in July 2006, the market shifted inexorably.

The trend toward compact SUVs and small cars continues to this day.

GM Holden, supported by exports to the Middle East, produced a record 165,252 cars in 2004 and won recognition as GM’s global benchmark for excellence in rear-drive vehicles.

Under Peter Hanenberger, the charismatic German engineer who wanted to take the brand global, GM Holden was riding high with a more than 20% market share. The automaker still believed in the future of the traditional Australian family car.

Thinking ahead, the VE’s Zeta architecture was enabled for left- and right-hand drive. With the enthusiastic support of Bob Lutz, GM’s product boss at the time, Hanenberger and Mike Simcoe, Holden’s design chief, Zeta was intended to underpin new models from Chevrolet, Pontiac and Buick, with the potential for a Cadillac limousine.

With rear drive seemingly on the comeback trail in the U.S., GM wanted to build affordable performance cars; it seemed GM Holden and its parent’s global ambitions were about to be realized.

When Lutz visited Australia in February 2004, Simcoe revealed the full potential of Zeta with long- and short-wheelbase sedans and wagons, some early Torana compact-sedan proposals, low- and high-cowl wagons, a Monaro coupe and utes with the long doors of coupes.

Later that year the Americans unveiled a Zeta-based Buick convertible powered by a twin-turbo version of GM Holden’s 3.6L V-6.

By late 2004, the U.S. program was in trouble. Buick’s version of the Chevrolet Caprice was canceled because the styling didn’t fit the brand’s design language. In March 2005, Lutz announced plans to build American cars on the Zeta platform had been scrapped, the only exception being the Chevrolet Camaro. They were too expensive.

The decision not to proceed effectively meant GM Holden no longer was an integral part of GM’s global development program. Future rear-drive cars – with the notable exceptions of the Pontiac G8 and Chevrolet SS, both exercises in badge engineering – would be created in Detroit.

The GM Holden pull-out means not just the end of local manufacturing, but also a massive downgrading in local engineering work and the closure of the Lang Lang proving ground. Only local design work for GM’s global brands has a future.

GM Holden’s engineering input into future models from South Korea, the U.S. and Germany will be insignificant.