Holden to Survive Despite GM's US Bankruptcy

GM's Australian division Holden is still on the safe side, government officials were quoted as saying, despite the American manufacturer is getting ready to step under Chapter 11 in the domestic market. Australian Industry Minister Kim Carr says the restructuring measures the manufacturer applied in the country makes it stronger in the current economic environment and predicts better times even if GM's goes bankrupt.

"I remain very optimistic that Holden will weather the global financial storm and emerge stronger," he said according to drive.com.au "Holden has already undergone significant restructuring. The cooperative efforts of management, workers and the Australian government have put the company in a good position to deal with whatever General Motors may announce in the coming days. I expect that Holden will be safe even if General Motors do go in Chapter XI bankruptcy."

As said, Holden has already turned to cost cutting measures in the country to reduce the damages caused by the recession. The Australian manufacturer last week turned to a one shift schedule at the Adelaide production facility, in a move to preserve job layoffs and maintain the facility open until the demand rises again.

Holden will also start producing a four-cylinder vehicle in Australia that would better match the current market demands. This means the Australian unit still plays an important role in GM's global strategy, explained Karr.

"It is important to remember that Chapter XI bankruptcy in the US is very different to bankruptcy in Australia. It does not mean GM is being liquidated or is going out of business," Karr commented on GM's current situation. "GM's February restructure statement noted that Holden Australia was seen as `viable' due to Australian government support for the new four-cylinder fuel-efficient car."