Australian consortium wanting to spend up to $750mill to acquire Holden plant

[Brazen]

Interesting, big money being talked about - wouldn't be surprised if its a bank or Super fund that is interested. Obviously all pie in the sky stuff at this stage, but way too much value sitting there to throw away.

http://www.adelaidenow.com.au/news/s...-1226821061430

A private consortium of investors is in talks with General Motors over the future of the Holden manufacturing plant at Elizabeth. Source: News Limited
AN AUSTRALIAN-based consortium is mounting a bid to take over Holden's soon-to-be-vacated Elizabeth plant and continue making cars beyond 2017.

Ethan managing director Ashley Fenn said he and a group of fellow businessmen were in talks with General Motors about buying the plant.

He said the talks also involved the possibility of possibly gaining access to the company's brand and intellectual property.

Last month, Holden corporate affairs executive director George Svigos ruled out the company selling its name and said it was "completely committed to the Holden brand and intends to sell Holden cars for many years to come".

It followed comments from Premier Jay Weatherill that "a particular car manufacturer might want to set up here but use the equity that's in the Holden brand to continue making cars".

Mr Fenn told The Advertiser said talks with General Motors, Holden's Detroit-based parent company, had been "extremely positive".

He also said the consortium was willing to work with other car makers to save thousands of jobs at the plant and in component companies. The state and federal governments as well as unions have been briefed on the plan, he said.

Mr Fenn said unnamed equity partners were already prepared to offer $750 million.

Manufacturing, Innovation and Trade Minister Tom Kenyon last night confirmed the State Government was in talks with the group and treating the bid seriously.

"They're doing work, talking seriously to GM and, if they're successful down the track, then that would be a good result for South Australia," Mr Kenyon said.

"They're not to be dismissed. Their goal is to manufacture vehicles in SA."

He confirmed the State Government was in similar talks with other companies but declined to name them. Mr Kenyon would not comment if extra taxpayer support was being considered.

Mr Fenn is also the Victorian state director of the Family First Party, on the party's federal executive and was a Senate candidate at last year's federal election.

Mr Fenn said he and other consortium members began working six months ago on plans to develop a "sustainable business model" for Australia car manufacturing.

That was soon after Ford's announcement it was ending domestic automotive manufacturing and while it was also clear then that the "writing was on the wall" for Holden, he said.

Mr Fenn said his consortium has engaged former executives from GM and Mitsubishi and was in discussions with financiers to raise capital.

"We really go into industries and companies and do turn arounds," Mr Fenn said. "What we've been able to do is collect some of Australia's best thinkers in this field.

"We've also been talking with financiers and capital partners. Our ultimate intent is to continue to manufacture cars in South Australia."

"Depending on what assets we might buy from whatever company, we'd look to put a business plan together, do a deal and then look to either take over or restructure".

Mr Fenn is also the operator of a not-for-profit housing development business, Ethan Housing.

He said the consortium was confident that the global car industry was positioned for growth and that an Australian company focused on both exports and domestic supply could be profitable.

Mr Fenn said negotiations with Holden and other companies had "months to go".

He said it was possible the consortium could "start from scratch" to develop a completely new car model and brand if it could not win agreement from an established car maker.

"We don't know whether we're buying just a plant, whether we're buying a plant with the platform and the name or it's a walk-in-walk-out-type scenario on the business," Mr Fenn said.

Mr Fenn said it was possible to profitably build cars in Australia.

"Obviously the currency has been very high," he said. "That hurts Australian manufacturing.

"We don't believe the currency is going to stay as high as it has been.

"On the other side is, there has always been a struggle between the companies and workforce.

"Having our interest here, in Australia, rather than the US, will make a very big difference."

Mr Fenn said the consortium did not intend to seek subsidies above what is already in state and federal Budgets and was not factoring in an assistance beyond 2020.

"We understand taxpayers are not going to want to subsidise an industry that's not going to be self-sufficient," he said.

Mr Kenyon said he would work with the consortium to progress its bid.

"GM is taking them seriously and I wouldn't want to be so sceptical that I missed an opportunity. "I'm happy to work with them to try and progress it," he said.

"There is a large amount of capital involved and the proof will be in the pudding of course.

"If they're able to keep manufacturing cars in South Australia, that's success."

[XR Martin]

Theres no way GM will sell any of its intellectual property.

[Brazen]

I think from memory when GM sold Saab it included the intellectual property. If it does get bought I doubt they will build the Commodore anyway.

[XR Martin]

I suspect it might be Tata or some Chinese auto group.

I cant see any local companies being interested in it, unless its to redevelop the land. But I dont think its worth $750m for that purpose, especially when it would need $100s of millions spent on cleaning up the site.

[Syndrome]

The Elizabeth site was built in the 1950s. A lot of it has asbestos and would need millions of dollars to bring it up to scratch. I don't see how it could be economically viable.

[mik]

Pretty game even contemplating building cars here, and i wouldn't like to pin my hopes on the aussie dollar behaving itself for more than 5 minutes.

[nstg8a]

I don't know anything about the plants, but wouldn't the ford plant be a better one to buy?

Being smaller? No new business would surely need a facility as big as holdens. Wouldn't it make the fixed running costs so much higher?

[malazn mafia]

Originally Posted by nstg8a

I don't know anything about the plants, but wouldn't the ford plant be a better one to buy?

Being smaller? No new business would surely need a facility as big as holdens. Wouldn't it make the fixed running costs so much higher?

Ford Geelong is located very near to a deep-sea shipping port. Would make a lot more sense than Holden's Elizabeth Plant in SA.

[PlukaDuck]

Originally Posted by nstg8a

I don't know anything about the plants, but wouldn't the ford plant be a better one to buy?

Being smaller? No new business would surely need a facility as big as holdens. Wouldn't it make the fixed running costs so much higher?

Possibly already sold to an ozzie company

Bio-tech cure for Geelong loss: Drug maker in Ford plan

http://geelong.starcommunity.com.au/...-in-ford-plan/

[Nikked]

That will go well...

If this happend, no doubt GM would rebrand its Australian opetation as Chevrolet, leaving the group of investors with the manufacturing side only. They can only take the VF out till 2017-2018 anyway, then will have to invest in a new platform...

Not to mention gaving to sorce or creating supply chains for components, engines...

I can't see it happening...

[malazn mafia]

Originally Posted by Nikked

That will go well...

If this happend, no doubt GM would rebrand its Australian opetation as Chevrolet, leaving the group of investors with the manufacturing side only. They can only take the VF out till 2017-2018 anyway, then will have to invest in a new platform...

Not to mention gaving to sorce or creating supply chains for components, engines...

I can't see it happening...

Platforms can last for a very long time. Blast out the competition through high import taxes. Then keep manufacturing the same car with small cosmetic updates for the next 2 decades. Works in Malaysia. Google: Proton Saga

Someone should buy up Ford Facilities and keep pumping out AU3 Wagons or BF3 Wagons forever for taxi use...

[Syndrome]

Originally Posted by malazn mafia

Platforms can last for a very long time. Blast out the competition through high import taxes. Then keep manufacturing the same car with small cosmetic updates for the next 2 decades. Works in Malaysia. Google: Proton Saga

Someone should buy up Ford Facilities and keep pumping out AU3 Wagons or BF3 Wagons forever for taxi use...

BF3 wagon with EcoLPi would be a winner for the taxi fleet.

[turbodewd]

If this is to succeed then its crucial that all level of governments devote 75% or more of their fleets to this car.

And imagine if they could buy the EcoBoost 2.3L off Ford

[cheap]

[Maka]

Originally Posted by turbodewd

If this is to succeed then its crucial that all level of governments devote 75% or more of their fleets to this car.

And imagine if they could buy the EcoBoost 2.3L off Ford

Yep i agree, let see how long it takes for those to change back to buy Aussie policy though - it'll say a lot about a commitment to Aussie manufacturing....

cheers, Maka

[Maka]

I wish em all the best if it means more Aussie jobs for South Australia, i will be looking foward to more info in the coming weeks & months.

cheers, Maka

[pottery beige]

Nigerian scam

[Spammy]

Originally Posted by pottery beige

Nigerian scam

Nigerian scams typically have a more beliveable back story.

[bobthebilda]

Originally Posted by Spammy

Nigerian scams typically have a more beliveable back story.

Its far worse than a Nigerian scam. The article mentions members of the South Australian government.

[Spammy]

"Interesting, big money being talked about-wouldn't be surprised if its a bank or Super fund that is interested. "

No bank or pension fund would come within 100 miles of a deal like this. Its easy to put a "consortium" togther ...but it's very hard (read impossible) to find funding for meaningless projects like this.

[Maka]

Originally Posted by Spammy

"Interesting, big money being talked about-wouldn't be surprised if its a bank or Super fund that is interested. "

No bank or pension fund would come within 100 miles of a deal like this. Its easy to put a "consortium" togther ...but it's very hard (read impossible) to find funding for meaningless projects like this.

"Mr Fenn said unnamed equity partners were already prepared to offer $750 million"

cheers, Maka

[Brazen]

Originally Posted by Spammy

"Interesting, big money being talked about-wouldn't be surprised if its a bank or Super fund that is interested. "

No bank or pension fund would come within 100 miles of a deal like this. Its easy to put a "consortium" togther ...but it's very hard (read impossible) to find funding for meaningless projects like this.

Australia has 2.2 trillion dollars in super funds, its the fourth largest pool of any type of money in the world. Most of the super funds and banks to diversify their domestic holdings have a set percentage to invest in the manufacturing or Industrials sector.

As the pool continues to grow (about $5 billion a week) the super funds are screaming for manufacturing investments to place the money. Its why small manufacturers in Australia have been able to stay Australian owned as the super funds have very little choice but to have a holding which keeps the share price in demand and make it harder for foreign takeover. I'm thinking of companies especially like Futuris, Bluescope, Boart Longyear which should have been picked off a long time ago.

A large manufacturing concern listed in the ASX would have potentially a huge pool of money to play with.

[Spammy]

Originally Posted by Brazen

Australia has 2.2 trillion dollars in super funds, its the fourth largest pool of any type of money in the world. Most of the super funds and banks to diversify their domestic holdings have a set percentage to invest in the manufacturing or Industrials sector.

As the pool continues to grow (about $5 billion a week) the super funds are screaming for manufacturing investments to place the money. Its why small manufacturers in Australia have been able to stay Australian owned as the super funds have very little choice but to have a holding which keeps the share price in demand and make it harder for foreign takeover. I'm thinking of companies especially like Futuris, Bluescope, Boart Longyear which should have been picked off a long time ago.

A large manufacturing concern listed in the ASX would have potentially a huge pool of money to play with.

A sucessful one would - this one won't.

By way of backround, I am a fund manager in the Australain Pension fund market, so I sort of get how things tick. Prior to switching to funds management I spent 12 years in bond trading/asset finanacing/corporate finance in one of the larger investment banks.

[Maka]

Originally Posted by Spammy

A sucessful one would - this one won't.

By way of backround, I am a fund manager in the Australain Pension fund market, so I sort of get how things tick. Prior to switching to funds management I spent 12 years in bond trading/asset finanacing/corporate finance in one of the larger investment banks.

Oh ok.... back from oversea's?

cheers, Maka

[Road_Warrior]

But GM has just devalued Holden to $71 Million...

[Itsme]

Originally Posted by Brazen

Interesting, big money being talked about - wouldn't be surprised if its a bank or Super fund that is interested. Obviously all pie in the sky stuff at this stage, but way too much value sitting there to throw away.

http://www.adelaidenow.com.au/news/s...-1226821061430

It would be like betting on a nag in a horse race!

[Road_Warrior]

The big missing link in all this is what would this new rejuvenated car plant make - no good going back to building Commodores. They will be back to where we are now in 5 years time.

[jpd80]

Let's borrow other people's money to copy what GM was doing wrong....

[malazn mafia]

Originally Posted by Road_Warrior

The big missing link in all this is what would this new rejuvenated car plant make - no good going back to building Commodores. They will be back to where we are now in 5 years time.

Not a car engineer by any stretch, but for many years I have always wondered why modern cars are monocoque chassis? Why couldn't we tear a leaf out of the history books and build a solid modular space frame or ladder chassis with front suspension and IRS bolted in as modules. The frame could utilise modern lightweight materials and be designed to absorb crash impacts. Installing an engine would be a case of fabricating a bunch of brackets and braces to secure to the frame. Then a standard ISO pattern or even a Lego-themed assembly could be used to attach whatever body style you want to this chassis. The frame could stay the same for eternity, with the IRS, front suspension and powertrain components being continually developed, and the wheelbase or track could be adjusted by manufacturing parts of the space frame or ladder chassis in different lengths. The body styles could be assembled overseas and interior options could be built up as modules running a simple CAT5 or even a power/data/earth configuration. With this setup, average joe doesn't need to buy a new car... He could upgrade his car which he has setup and modified with the latest body style or a different one as his needs change. Couldn't this all work or am I just crazy ?

[Road_Warrior]

Originally Posted by malazn mafia

Not a car engineer by any stretch, but for many years I have always wondered why modern cars are monocoque chassis? Why couldn't we tear a leaf out of the history books and build a solid modular space frame or ladder chassis with front suspension and IRS bolted in as modules. The frame could utilise modern lightweight materials and be designed to absorb crash impacts. Installing an engine would be a case of fabricating a bunch of brackets and braces to secure to the frame. Then a standard ISO pattern or even a Lego-themed assembly could be used to attach whatever body style you want to this chassis. The frame could stay the same for eternity, with the IRS, front suspension and powertrain components being continually developed, and the wheelbase or track could be adjusted by manufacturing parts of the space frame or ladder chassis in different lengths. The body styles could be assembled overseas and interior options could be built up as modules running a simple CAT5 or even a power/data/earth configuration. With this setup, average joe doesn't need to buy a new car... He could upgrade his car which he has setup and modified with the latest body style or a different one as his needs change. Couldn't this all work or am I just crazy ?

Ok I'll bite. The only real benefit a Body-On-Frame (BOF) configuration has over monocoque or unitary is durability for load carrying applications. There's a reason all the car makers are still persisting with BOF for commercial vehicles - because they handle the abuse a lot better and support the variable needs of a commercial vehicle platform very well.

Passenger cars don't need this, because they're not lugging a tonne of bricks around in the tray or whatever, so monocoque is the way to go. Not only is a monocoque chassis lighter and cheaper to make, it can be designed to be just as flexible and almost as tough as a BOF platform.

Not only do they not need the weight and toughness factor, they also have to comply with rigid safety standards that commercial vehicles do not.

Look at the Falcon for example. Here is a RWD, front engine platform that supports 4 different engine types, plus an AWD SUV. Holden's Zeta platform is another. Supports 2 engines, a LWB, SWB and sort of supports a coupe.

A monocoque platform can be scaled just as you describe with the BOF system, but the product doesnt have to pay a weight penalty or need extra plant at the manufacturing end to build it (read: more dudes on the line or more expensive automation). You can continually evolve the expensive bits like suspension units and engines and leave the rest pretty much static, or whack on a new top hat if you want fresh sheetmetal - sort of what Ford did from BF to FG, just with a lot more work in some areas and less where they should have.