My 1928 Chevrolet: The Early History of General Motors Holden in Australia

This posting is based on facts and figures from the web site of

http://www.uniquecarsandparts.com.au/default.html

The Founder

A Leather and saddlery business opened its doors in 1856 on the corner of King William and Rundle streets in Adelaide, South Australia. The proprietor, one James Alexander Holden merged the business in 1885 with carriage builder Henry Adolf Frost and became "Holden and Frost".

Holden and Frost enter the Automobile Industry

Its now 1914 and Holden & Frost begin trimming motor vehicles. In 1914 they built their first one off car body for an imported Lancia chassis. Larger contracts followed but ironically the first major contract was for Dodge bodies (a later competitor).

The Australian government triggers the next move

By 1917 the Australian government had placed an import embargo on complete vehicles, the First World War having almost entirely involved Britain's industry, and German U Boat Captains were doing their best to ensure that very few cargo ships leaving North America reached their intended destination. This combined with saving valuable cargo space, restricted imports to chassis and forced local vehicle agents to look to local firms to provide the bodies.

Holden Motor Body Builders commences

Edward Wheeldon Holden registered "Holden's Motor Body Builders" in 1919 as a separate company specialising in car bodies. At the time they built bodies for Overland, Chevrolet, Durant, Hupmobile and Dodge, and by 1923 they were producing over 12,000 bodies per year.

Sole Body Builder for General Motors

"Holden's Motor Body Builders" became the sole Australian body builder for General Motors vehicles in 1924 and had an output of over 22,000 bodies (over 11,000 for GM) in 65 different body styles.

The Holden Logo

The "Lion and Stone" symbol was designed in 1928 by George Rayner Hoff, and represented the legend of man's invention of the wheel. It was subsequently fitted to all Holden bodies and, although undergoing minor changes over the years, remains to this day.

General Motors purchases Holden Motor Body Builders

The 'Great Depression' hit the country in 1930, and production fell from 34,000 units per year to a mere 1651. General Motors purchased Holden's Motor Body Builders in 1931 and merged it with their North American operation to form General Motors - Holdens.

This move was not entirely motivated by taking advantage of the company when it was at an all time low but was mainly occasioned by the Australian government freezing the currency so that money couldn't leave the country during the depression.

The money to pay GM in the United States for the previously imported chassis was trapped in Australia and so was used to finance the buy out which in part took the form of swapping the ordinary shares held by 1550 Australian shareholders in Holdens Motor Body Builders for 561,000 6% 1 pound preference shares (ie: 6% of the value of their shares each year) in the new company.

This made the paid up capital of the new company 561,000 pounds Australian capital (37% of the total) and 965,800 pound U.S. capital (63% of the total).

In addition there was tension between the Australian operation and the United States with management in the United States complaining "Amazing people these Australians; they just won't do as they're told" (Inness Randolph head of General Motors Australia to Larry Hartnett in 1929) and a merger/takeover was also a way to solve this little problem.

Laurence Hartnett becomes General Manager

In 1934 Larry Hartnett (later Sir Laurence Hartnett) was sent to Australia by GM as Managing Director of the Australian company with a directive to either make it profitable or close it down.
Fortunately Hartnett respected the resourceful nature of the Australian operation and stated "The economies achieved by Holden's at Woodville put them, in many ways, years ahead of the rest of the world in manufacturing techniques. The resourcefulness and initiative of the Australians in this industry is beyond praise."

General Motors Holden produces the Worlds First Sloper

By 1935 the world economy had strengthened and under the leadership of Larry Hartnett GM-H lifted production to 23,129 bodies and a profit of 650,000 pounds. The company also introduced the "Sloper" to the world which was the fore runner of the hatchback and led the rest of the world in producing the first all steel bodies.

Sir Laurence Hartnett Makes Plans For An All Australian Car

In 1936 Larry Hartnett began planning the complete production of a "wholly Australian car", however another World War intervened, with the (Menzies) government of the time putting these plans on hold. After the war the Government asked for proposals from any local company for production of a complete car - and General Motors Holdens were the only company to reply.

On September 20, 1944 Sir Laurence Hartnett and Mr Jack Horn of General Motors - Holdens made a presentation entitled "Australia - GM's Performance and Results - Manufacture of Complete Motor-Cars in Australia" to the Executive Post War Planning Committee of General Motors in New York. This meeting gained approval in principal for GM-H to commence the process of designing and building an Australian car.

Selling It To Detroit

A major production which was rehearsed for 3 weeks in New York and involved 18 stenographers, 7 photographers and photographic reproduction men, 2 statisticians plus experts from GM finance, materials and manufacturing divisions all with the aim of convincing the committee of approving the project in principal, it was finally approved in November 1944.

But it almost did not eventuate, with the US deciding that it would not invest in Australia (despite making hefty profits from its Australian operation) and only when the Commonwealth Bank came up with £2,500,000 pounds and the Bank of Adelaide came up with the balance of £500,000 pounds did the project finally get off the ground.

The Release Of The 48/215

When the first Holden (designated the 48/215) went on sale in 1948, the list price was the equivalent of $1330. To this the buyer had to add 'on road' charges including registration and insurance plus $136 in sales tax. Sales tax has played a big part in the price of Holdens through the years. It has been as low as 10 per cent and as high as 40 per cent, and in 1990, a new high of 50 per cent was briefly imposed on the Caprice because it was priced above a 'luxury car' limit set by the federal government. Inflation too has played a big part.

When the VN Commodore was launched in 1988 exactly four decades after the first Holden - it cost $20,014 including sales tax. That was nearly 14 times as expensive as a 1948 Holden, but by 1988 the average male wage had risen to $491. Statistically speaking, that meant that a worker needed to complete 41 weeks on the job to buy a new VN. In 1948 the average male earned $15.60 and would have had to work around 94 weeks to pay the tax-inclusive price of a new Holden. It's not quite that simple, of course.

Car Ownership Becomes More Affordable

These wage figures are gross and the average worker now pays a higher percentage of income tax than in 1948. Then again, the average working week is now shorter and credit is easier to obtain, making car ownership more accessible to a greater number of people. Two-income households are also much more common. Even if the woman of 1948 was holding down a similar job to her husband, she would be getting around 25 per cent less money.

The VP Commodore hit the market with the base sedan priced at $23,992 - an unimaginable figure by 1948 standards but highly competitive in 1991. Comparatively speaking, the Hoiden was never cheaper than in the early 19708, when an average wage-earner could buy a new Hoiden with just 25 weekly pay packets.

Through all the fluctuations, the cars themselves have become more sophisticated. If you compare the Holdens of the 1940s, '50s, '60s or '70s with today's models, an incredible amount of equipment is now standard that was then not even optional. As well as a plethora of luxury items, the modern Commodore has countless mechanical advantages and a higher standard of performance, handling and comfort. It is faster, quieter, more ergonomically efficient, smoother, roomier, better equipped, more robust, easier to drive and harder to steal.

Australia's favourite Car

Most importantly of all, today's car is considerably safer on two levels: keeping you out of an accident and protecting you if you are unfortunate enough to be in one. And although early Holdens were considered advanced in their day, a car which required a service and oil change every 1600 kilometres just wouldn't sell today. Today, almost every generation X Australian would have owned or driven a Holden at some time and the company can rightfully claim to be 'Australia's favourite Car'.