Holden factory reborn as electric vehicles hub

By Leith van Onselen

Nearly a year after Holden closed its assembly operations in October 2017, ending 69-years of local production and axing close to 1,000 jobs, there’s some good news to report, with Holden to employ 150 engineers as it becomes GM’s R&D hub developing autonomous and electric vehicle technology. From Manufacturing Monthly:

At a media event held at Holden’s Port Melbourne headquarters, GM executive vice-president of global product development – and former Holden managing director – Mark Reuss, expressed the brand’s commitment to autonomous and zero-emissions vehicles, for which Holden in Australia will play a “significant role.”

Reuss said Holden will quadruple its R&D budget from the current $30 million to $120 million a year to boost its design and engineering workforce to develop cars of the future for General Motors globally.

All 150 of the vacant positions are expected to be filled by the end of next year, recruiting both experienced and graduate engineers, bringing the Australian design, engineering and development team to over 500 strong…

“The world-class vehicle engineering capability we have at Holden in Australia will play a significant role in GM delivering its commitment to create a world with zero crashes, zero emissions and zero congestion.”

Holden’s executive director of engineering, Brett Vivian said the jobs boost follow significant upgrades to the company’s emissions test lab and test tracks at the Lang Lang Proving Ground on the southeast outskirts of Melbourne.

Holden’s expansive Lang Lang proving ground was recently upgraded courtesy of a $15.9million joint investment by GM and Holden.

The facility, 90-kilometres south east of Melbourne, features 44-kilometres of road systems, including the upgraded 4.7km four-lane circular high-speed bowl, a 5.5km ride and handling course, a 1.8km noise and road testing stretch, and a 98m diameter skid pan.

As an aside, the Department of Employment’s latest 2018 Employment Projections, released last week, predicted a small rebound in Australian manufacturing employment, brought about in part by the lower Australian dollar:

The long-term decline in Manufacturing employment is expected to abate over the five years to May 2023, with employment in the industry projected to grow by 8500 (or 0.9 per cent). Notwithstanding the long-term trend of falling employment in many sectors of the industry, this glimmer of hope reflects the increased competitiveness provided by the lower Australian dollar combined with an increased focus on adding value in global supply chains rather than in basic manufacturing.

It is also, in part, that there is no longer a drain on employment growth from the Motor Vehicle and Motor Vehicle Part Manufacturing sector since the Ford, Holden and Toyota closures have been finalised. Government expenditure on defence has also supported other manufacturing sectors, particularly Other Transport Equipment Manufacture.

Here’s hoping!

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Unconventional Economist


  1. The Broadmeadows site should be acquired by the fake Greens for the purpose of building schools with ovals (remember those?). It is right next to a train station and could allow kids in Coburg (devoid of schools) to catch a train to get to the schools.

    • But I can’t wonder what if any tax will be paid. R&D tax concessions, IP owned by GM. Do Oz tax payers end up subsidising GM’s electrification and automation?

      • They didn’t pay any tax when they were making and selling cars, so no hope in hell of paying any doing R&D.

    • But electric cars aren’t cheap, thats the problem.
      Putting the tin foil hat on, the reason tesla is producing so few vehicles is because even at the price they are charging they are still making losses on every vehicle sold.
      Watch the “who killed the electric car” documentary about the trial EV made by gm and the engineer they spoke to made it pretty clear this was true back in the 90’s even if it didn’t fit the film makers agenda.

      • I’ve looked into Tesla pretty closely, and the reason they’re not producing many cars is due to incompetence in large scale production and trying to apply software project management techniques to manufacturing. They certainly have deposits on enough cars.

        Of course, they’re not making a profit because they can’t get their production line together, and they’re also simultaneously putting money into other projects (semi and model y).

      • Again, if they’ve got the deposits, why not hire people with the manufacturing experience to fix it?

        Possibly because if they fix it, then they make even bigger losses? And if they price the car to reflect actual costs then all the deposits evaporate along with any credibility at all about being able to produce a car that is economically viable and tesla is destroyed. thus they are playing pretend and extend in the hope of bringing costs down to a point that they can become profitable.

      • bjw678,

        My thinking is that it isn’t as simple as getting people, Tesla lacks the “corporate” knowledge that other car manufacturers have built up over decades, so just getting people together isn’t the solution, part of it, but not all of it.

        Per your response to me above, what’s the benefit to Australia, along with fisho’s comment that there’s likely to be no manufacturing taking place here?

      • yeah, just hire some competent people to fix it. hahahhaahahahaha – go ask Toyota…lol
        Mass producing high end cars is not just having an assembly factory, some machinery and factory hands, it’s having a reliable, highly integrated and complex supply chain working as one to build an incredibly complex product. It’s orders of magnitudemore difficult than putting together a smartphone as Musk has pointed out. Tesla’s massive difficulties also shows what we have lost. Morons.

      • @StJ
        You can only learn about the importance of integrated supply chains the hard way (as i when you haven’t got one anymore)
        I know many Engineers that work on one-off sort of products for Military and Space applications that are fixated on part specification yet will totally ignore Cp and Cpk data. For me product R&D is all about working with the natural capability of the supplier processes to dial in an end product that requires the minimum of change (tweaking) of the default production flow. It’s a very different way of thinking about the problem and requires much greater faith in your suppliers to maintain consistency in their product…lot to lot and part to part variance is your ultimate enemy.

      • yeah fisho, i’m no engineer but seeing it operate really takes my breath away in amazement. Like my brother said, there’s much more to product engineering than just designing the bloody end product. Closing down the car industry to save a few pennies coz the Ozzie was temporarily at parity with the USD must go down as one of the most monumentally dumb moments in this country’s history, and yet people were cheering it on !

      • Lets be realistic, supply chain problems don’t mean they are unable to obtain the required parts in sufficient quantity.
        They mean they are unable to obtain them in sufficient quantity AT THE REQUIRED PRICE.
        The parts are capable of being made, cause cars are being delivered. If new factories are required to produce the required quantity of components then that is part of the cost base, and they haven’t priced the car correctly.

        Corporate knowledge is simply what your staff collectively knows, and i’m sure at the rate tesla is burning money, they could hire a significant chunk of knowledgable people from other automotive manufacturers.

        GM R&D probably very minimal benefit to OZ. A small amount of employment for tech/engineer people in R&D, hopefully some training of graduates/juniors but probably not, and people will obtain skills that can transfer to other employers that require them.

      • Buggy parts, massive misses in production, safety issues,,,,but sure, if you’ve got enough money to throw at it you’ll build that corporate knowledge and reliable, adaptable supply chain. Eventually.

      • Lets be realistic, supply chain problems don’t mean they are unable to obtain the required parts in sufficient quantity.
        They mean they are unable to obtain them in sufficient quantity AT THE REQUIRED PRICE.

        WHAT! not really worth replying because you’re obviously clueless….don’t feed the trolls etc

      • Do you actually understand how supply and demand works?
        Are tesla squeezing their suppliers for the lowest cost and as such only get the excess capacity to build their stuff?
        How did the chinese manage to work all this stuff out?

        And finally, the cult of tesla has come out in it’s defence which makes me think I may actually be right.
        Musk is selling ideas, not cars. The cars are just a side gig.

      • “Musk is selling ideas”.
        No he’s selling cars. It’s just that after the space X project he massively under-estimated how difficult it is to set up a major car manufacturing industry from scratch, and has admitted it. And it’s hilarious you’d wave the old supply-demand graph in front of an engineer like fisho who’s had to deal with the problems of manufacturing products he’s designed all his working life. And how did the Chinese work it out? Like everybody else who’s done it; start at the cheap, simple end and work their way up. and get lots of knowledge and help from those who already had done it, one way or another and with the help from an under valued currency and a semi-protected domestic market.

      • So fisho has the knowledge to solve these problems, but Musk can’t hire anyone to help him with it?
        There seems to be a heap of experts on an economics blog that know all about it.
        Forgive my disbelief of everything the prophet musk has to say.
        And why exaclty is he taking his company back off the stock exchange? Too much scrutiny on the activities of a publicly listed company possibly?

      • And then the final red flag.
        I’ve got supply chain issues, and can’t deliver the cars I claimed I could.
        Should I fix my supply chain issues, or go ahead with new product lines without fixing them and have further problems delivering?

      • Interesting snippet related to supply chain. Recently it has been very difficult to get reels of 100nF chip capacitors – like in lead times in excess of a year. Similar with resistors etc. One supplier said that the EV market is sucking up vast numbers of these jellybean components. I think the figure was 40K caps per Tesla. I don’t know where these go, but maybe in the battery stack,

        The other interesting point was that the Chinese EVs only use half the number of these components. It would be interesting to know if Tesla is efficiently designed or if there is over engineering all over the place. If he is trying to use Software Engineering techniques to build them, then he might be in all sorts of trouble.

      • Would ev’s really be significant compared to the huge amount of consumer electronics manufactured every year. The electronics in petrol cars probably uses more such components given the much greater volumes produced. But I’m happy to be corrected by someone who knows.

      • A petrol car would have quite a bit of electronics, but nowhere near 40K. 1K maybe. I suspect it is the battery stack in the EV.

        If the 40K figure is accurate, and Tesla builds 100K cars, then that is 40K x 100K – 4 Billion jellybeans.

        An iPhone probably has 50 – 100 100nF caps in it. to match the Tesla they would need to build 40-80 million iPhones. It is an interesting idea that EVs might blow up the global supply chain of a simple – used everywhere component like a humble bypass cap.

      • @DM
        100nF chip cap is a typical supply decoupling cap and only typically has a 3V rating, I cant imagine why you would use a lot of these components in a Battery pack.
        What you might be seeing is supply problems at the better grade parts usually there are about 4 grades of Chip caps. the higher grades are typically used for Automotive applications (they use a different chemistry) and have reduced (better controlled) ESR, dielectric relaxation and improved linearity. However there’s no where near as much manufacturing capacity devoted to higher grade components as is available for the lower performance parts, so it doesn’t take that much of a change in demand to create extreme component shortages. Generally speaking the one off and low volume production never mess around with the lower grade component parts so they’re the ones that are impacted when some application suddenly takes off that specifies high grade parts.

      • I think you will find 6.3V is the lowest. All are very common – 16v 25v and 50v. Anyway, they all compete for the same production lines. The battery stacks might use one per cell – which would be low voltage. It would be interesting to see exactly how they make those battery stacks.

      • bjw678,

        “Corporate knowledge is simply what your staff collectively knows, and i’m sure at the rate tesla is burning money, they could hire a significant chunk of knowledgable people from other automotive manufacturers.”

        I don’t agree, corporate knowledge is what the staff collectively knows and has learnt over time and the company has put the applicable processes and documentation in place. I doubt it’s as simple as getting people in, not over the short term anyway. I doubt it’s as simple as bringing people in and throwing them together, bound to be different ideas, attitudes and experiences etc. I’d have thought it’d take time to get that altogether for complex manufacturing.

  2. reusachtigeMEMBER

    Another one of the many good news stories that domonstrates that the green shoots of the next boom are sprouting everywhere! It’s a great time to be getting into property investment that is for sure!!

  3. I wonder if they saw the collapsing Holden sales and threw this bone.

    quadruple its R&D budget from the current $30 million to $120 million a year

    I wonder what they spend on advertising.

    I also wonder if they give a flying frog’s @rse about the backwater that is straya.

  4. Great news BUT the cold hard reality of Auto R&D is that it’s a service industry whose only client is Manufacturing.
    At the moment it’s hard to differentiate beyond the obvious “it’s an Electric car”, which is the good news and the bad news all in one sentence.
    I can’t see any way that this R&D center results in Australia developing a significant Electric motor manufacturing capability nor will it develop a battery giga factory, neither of these things is ever going to happen.
    Leaves the question: What aspects of Electric car design/production will these Engineers be Researching?
    Like I said at the start, it’s great news but if we want this R&D expenditure to become an Investment it’ll need focus and purpose that go way beyond the press releases and will need to extract real globally significant value from the work product of these engineers.

    • Yes, it’s the R&D Centre straight out of central casting.

      Back in the 90’s Canon set up an R&D centre over near North Ryde – CISRA. Part of the deal was that this allowed them to sell photocopiers to the government, and they used the R&D group to farm patents. Eventually they packed up their cache of patents and went home to Japan. Big tech companies used patents as sort of bargaining chips with each other.

      • Yeah I knew a few guys that worked at Cannon North Ryde, I remember talking to them about what specific products / product roadmaps they were developing and got nothing but vague answers about blue-sky ventures and white-space engineering…. ’bout all I needed to hear before I wished them well.
        If anything of value is to come from this Holden R&D exercise they’ll need to own the results of their Research, in the sense that it becomes their product and remains their problem. They’ll need one heck of an R&D manager to pull it all together but even more than that they’ll need focus and purpose because that’s what’s required to get the right R&D manager interested.

      • CISRA is still around – much smaller than before.. Yes big tech companies all file heaps of patents and cross license with (or occasionally sue) each other, however the patents do need to somehow relate to deployed products. Nevertheless, it has lasted longer than many (almost all?) telco R&D labs that used to exist in Australia – after the tech wreck and abandonment by Gov policy, this country’s R&D capability atrophied massively.

    • @fisho
      Can you answer one serious question for a troll?
      If you had a product that you had a backlog of orders for including deposits, but couldn’t fulfil because of production/supply chain problems would you be devoting resources to fixing the problems or developing a new product that would have to use essentially the same production line and have the same problems.
      The only way developing the new product makes sense to me is if the existing product is not actually profitable.

      And a bonus if you want, why wouldn’t you increase selling prices if you are completely unable to keep up with demand? Profit and selling cars doesn’t seem to be the priority at Tesla.

      • All products have life times, sometimes the market dictates a products life time (such as competition has some new feature sets or new technology), sometimes companies obsolete their own products by introducing a “new” product just to keep the competition wrong footed, Intel was very good at this game. Sometimes you figure out what is really wrong with a product (true root cause) to far into the production to make major changes (for instance the Model S seems to have suspension problems with the rear trailing arm I believe) it is possible that this problem stems from incorrectly manufactured parts (aka supplier problems) or it could be some sort of fundamental design issue (because wheels aren’t suppose to fall off $100K cars …they’re not even suppose to fall off of $10K cars) . Now lets assume that Tesla now knows what is really wrong, they can do a giant recall for all the suspect parts OR try to phase the product out as fast as possible.
        Bottom line is there are a lot of reasons why you might choose not to “fix” a product that has huge demand for it (especially if it is not directly within your control) think about it this way: Do you want it to remain a contained manageable problem or become something so big that it’ll consume the whole company?
        To this end there are often contractual problems to do with IP integrated into your product that your don’t own. So lets just say this part that is snapping is made from some special alloy and the company that developed it says the delivered parts are perfect so it’s the design that’s the problem …would this company just hand over the knowhow to build this special alloy to Tesla just because they believe they can do better,,,and why would Tesla believe that they can do better …I mean are they now also Metallurgy experts?
        See what I mean lots of problems meaning that sometimes it is easier to learn your lessons and move forward by obsoleting the old product regardless of how profitable it may appear to be.
        As for: Wouldn’t I just increase prices? Hmmm Generally speaking Marketing is responsible for product price, figuring out the optimal price is not the job of the Design team or the production team…there are generally good business reasons for the chosen price point so there is reluctance to change that point just because Production or design can’t deliver what they promised.