Australians’ beloved Holden brand is now confirmed axed by General Motors as the brand struggles with constant negative revenue growth in the competitive motor vehicle market. This decision will have a ripple effect on the Australian economy and has already created much discussion and disappointment among the Australian Government and people.
Throughout the past few years, the Australian Government has issued almost 2 billion Australian dollars’ worth of subsidies to General Motors to help keep the iconic brand stay alive. The sudden axe has put billions of Australian taxpayers’ money in vain, which could have otherwise been invested into areas of education, healthcare or infrastructure to stimulate the Australian economy.
Furthermore, as production are scheduled to end by June 2020, over 600 out of approximately 800 Holden Australian Employees will be forced to go out of jobs, benefiting unemployment and raising concerns over the retraining and relocation of these employees. While the remainder of the 800 employees are also expected to lose their positions after the 10-year transition has been finished.
For current Holden owners, the decision will negatively impact the value of their vehicle on the second-hand vehicle as car parts go scarce and support from General Motors slowly approach the end of the 10-year transition period. Concerns also rise among Holden’s car part suppliers as they fear to go out of jobs after Holden completely shut down its manufacturing.
Overall, as the demise of the iconic Holden brand become a foregone conclusion, the overall economic impact and opportunity cost is yet to be calculated as Government plan for assistance plans — using taxpayer money which could have been invested else where otherwise.
Year 11 MHS Economics 2020 