Globalisation: Holden Car Manufacturing

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Globalisation affects a population in many different ways for better and for worse, and is “influenced by technological development and economic, political, and military interests. It is characterised by a worldwide increase in interdependence, interactivity, interconnectedness, and the virtually instantaneous exchange of information”(O’Shaughnessy and Stadler, 458). With new technologies, and improved trade relations, countries are looking to foreign markets to increase their profits from a business perspective.  Individually this can be an advantage as better access to news, information, foods and cheaper products become available to the developed countries on board. However, the bad side of Globalisation is that some countries are forced into these agreements in order to stay ready for international competition, and to avoid loss of industry. These moves are showcased in Australia’s car manufacturing giant ‘Holden’ to cease their manufacturing work on Australian shores as of 2017, and instead import their vehicles from General Motors (GM) to then sell locally.

International General Motors executive Stefan Jacoby says “ (it’s) Impossible to manufacture cars in Australia regardless of government assistance (if given any)” and adds that it is “impossible to manufacture ALL cars due to high prices and the government’s decision to sign the fair trade agreement”, thus low production rates and high Australian dollar means increased prices (Global Education, 2014), which therefore gives imports the upper hand.

“In 2010, the world’s population of cars reached one billion. High growth rates of car ownership in Thailand, Indonesia, China, India and Brazil reflect economic development and catch-up demand in those countries. Globalisation has meant increasing wealth and demand for cars in newly emerging economies. Expanding markets mean continued growth for car manufacturers and related employment. Congestion, pollution, fuel and steel availability challenge future expansion, but research continues to improve safety and efficiency”. (Global Education, 2014)

For Holden in Australia this means 100 years of manufacturing locally will cease resulting in an estimated 1400 jobs lost within 3 years. Arguments surrounding this decision have been mixed, with some people praising the move as it keeps the brand of Holden around longer, and some customers believing the manufacturing done by GM in America is of better standard and performance. Whilst others, it’s a case of globalisation gone wrong with yet another iconic “Aussie” brand taken over by foreign market.

The car industry has been globalised from its early days. There has been fierce competition between countries to invent better cars and obtain finance to manufacture. Countries such as Australia imported or assembled cars from Europe or the USA. Cars are still often designed in one country and built from components that originated in a number of countries by a company based in a third country. (Global Education, 2014)

The impact of globalisation in Australia continues to shift in opinion and in terms of car manufacturing, I believe is heading in a positive direction. The name Holden is trademark to car sales and ownership within Australia and to preserve the longevity by accepting terms with American manufacturing is going to keep a lot of enthusiasts satisfied. With similar circumstances at competing brands like Toyota and Ford, Holden has taken the first step into a successful future.

References

2014, Globalisation and the Car Industry, Global Education, viewed 12th August 2015, <http://www.globaleducation.edu.au/case-studies/globalisation-car-industry.html>

Tim Beissman 2013, Holden confirms Australian Manufacturing closer in 2017, Car Advice, viewed 12th August 2015, <http://www.caradvice.com.au/263976/holden-confirms-australian-manufacturing-closure-in-2017/>

Joshua Dowling 2013, Holden Shutdown: General Motors international boss Stefan Jacoby says Australia is better without car manufacturing, news.com.au, viewed 12th August 2015, <http://www.news.com.au/technology/innovation/holden-shutdown-general-motors-international-boss-stefan-jacoby-says-australia-is-better-without-car-manufacturing/story-fnjwucvh-1227183680228>

Appadurai, A (1996) ‘Disjuncture and Difference in the Global Cultural Economy’, Modernity at Large: Cultural Dimensions of Globalization, Minneapolis and London: University of Minnesota Press, pp. 27-47.

O’Shaughnessy, M and Stadler, J (2008) ‘Globalisation’, Media and Society (fifth edition) Oxford: Oxford University Press, pp. 458-471.

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