Holden chairman and managing director Mark Reuss, speaking from Melbourne yesterday, gave assurances on manufacturing, 300 dealerships and 6200 jobs in New Zealand and Australia.
He said while its US parent would continued to bankroll operations, but not all investment cash, Holden in Australia had been operating as "stand-alone self-funded unit" as the US parent remodelled itself within the long-expected bankruptcy proceedings.
"We don't' anticipate this decision will have any direct impact on Holden's workforce, dealers or suppliers," Mr Reuss said yesterday from Melbourne.
GM has filed for Chapter 11 bankruptcy protection, the largest industrial bankruptcy in US history, with the intention of splitting into "New GM" and "Old GM" models using a total $US50 billion ($NZ77.3 billion) US Government cash injection, which leaves the US Government with a 60% share of the company.
Dunedin staff at Cooke Howlison, Otago's largest Holden dealership with 20-30 sales per month, had been reassured by managing director John Marsh, that it was "business as usual" with the Holden brand and services.
He said it remained a "tough market" for new vehicle sales, but Holden would launch its new Commodore Cruze model as expected next month and sales and service would not be affected by the parent GM bankruptcy.
Mr Reuss said customer warranties, sales and service would not be affected.
GM has said all business in the Asia Pacific region, including Holden, would not be directly impacted by the US bankruptcy process, and Holden would later become part of the "New GM" model and clutch of its best performing brands, Mr Reuss said.
He said while the US bankruptcy "was a reckoning day for the parent GM", when the parent began its bridging loan with the US Government in December, Holden manufacturing in Australia would then be "operating on its own" to be profitable, but still with GM backing.
"Holden is a subsidiary of GM but we are a corporate entity in our own right - an independent company under Australian law," he said.
Mr Reuss said the more than 6000 jobs in Australia and New Zealand were not affected, while in the US GM planned to cut 21,000 employees, or about 34% of its workforce.
Holden had access to GM parent capital for operating its business, and low debt levels, but while GM was not funding all investment, some would also come from Holden Asia Pacific, Mr Reuss said.
Last year Holden spent $A420 million on research and development, more than any other private Australian company, plus $A500 million on wages, Mr Reuss said.
Holden had not been profitable since 2004.
Mr Reuss said it had been "profitable on and off" during months of that intervening period and was "close to" profitability last month and was also "on the verge" of profitability, but gave no indication of what the financial statements for 2008 held in store.
In Holden's last published accounts, for the year to December 2007, it booked a $A6 million loss, the Sydney Morning Herald reported yesterday.
Last year the Australian Government launched a more than $A6 billion fund for development of low emission cars, including almost $150 million over three years for the new Holden four-cylinder small car.
Mr Reuss noted the investment included $3 from the industry participants for every $1 from the government and that GM had approved a $450 million investment the new small car.
He said while GM subsidiaries Saab, Hummer and Opel were for sale, and two buyers had looked at Holden, it maintained "good earning power", profitability and had several car launches and technology to roll-out.
"We are cashflow positive, we are liquid . . . on the verge of turning a profit here this last month, even in a down business," Mr Reuss said.
He said no GM operations outside the US were included in the court filing or court-supervised bankruptcy process, which allows for the sale of selected assets to the new entity "New GM" and in 60-90 days it was expected to emerge as a separate and independent company from the present GM.
Holden, whose older Australian facilities were paid for, would have to generate its own positive cashflow and remain liquid, "as we are now", Mr Reuss said.
He highlighted the imminent launch of a new Commodore model, another new small car launch next year and fuel-efficient technologies which help underpin Holden profitability.
