General Motors Company (NYSE:GM)’s Decision Would Have Large Repercussions In Australia
General Motors Company (NYSE:GM)’s stock hit a fresh 52 week high of $41.17 during Monday’s trade and yesterday the stock closed at $40.40, losing 1.22% from its previous close. General Motors made couple of headlines yesterday as the automaker announced a name of Mary Barra to be its first woman Chief Executive Officer alongside its plan to halt car production in Australia by 2017.
A Woman CEO
Next month, Mary Barra would take on as General Motors Company (NYSE:GM)’s new CEO following the early retirement of Dan Akerson. Ms. Barra is a General Motors employee for more than three decades and is looking after global product development for past couple of years in her capacity of senior Vice President. In addition she is also on the supervisory board which is attempting turn around for General Motors’ Opel unit in recession stricken European region.
An Australian Exit
Ford Motor Company (NYSE:F) earlier in May 2013 announced to shut down two of its Australian auto plants by October 2016. Now the arch rival and world’s second largest automaker General Motors Company (NYSE:GM) also decided to walk the same trade, over-sighting strong Australian currency, high cost of production, declining sales, fragmented and highly competitive domestic market to be the prime concerns behind its decision.
The Domestic Impact
General Motors Company (NYSE:GM) is going to close its Holden plants in South Australia and Victoria states which is predicted to impact some 2,900 jobs. While this decision is going to build strong pressure on the conservative Australian government; General Motors holds that there is limited viability to make and assemble cars in Australia, said company General Manager Mike Devereux to the reporters in Adelaide.
If Japan based Toyota Motor Corp (ADR) (NYSE:TM) and world’s largest automaker decides to follow General Motors Company (NYSE:GM) and plans to shut its manufacturing unit in Australia it would completely shattered the domestic auto industry affecting some 150 suppliers and more than 40,000 people employed by them.