IN THE Mike Todd version of the film ‘Around the World in 80 Days’ there is a scene where Phileas Fogg demands more speed from a paddle steamer by cutting up the furnishings, masts, lifeboats and even the deck to make more steam.

Fogg, you will remember, had a deadline of being back in London within 80 days of leaving it, having in the meantime travelled around the world. At stake was a bet worth, these days, about $2 million.

That scene, indeed the plot of the Jules Verne novel, comes to mind when standing back and looking at General Motors’ strategy under GM chief Mary Barra.

Since taking the helm of GM in 2014, Ms Barra has determined that GM also has a bet – a profitable transition to electric and autonomous vehicles – and she appears to be ready to throw off or burn anything that she deems is going to get in the way of success.

So, in those terms, the loss of Holden is just another piece of wood thrown into the firebox to keep the boiler going to buy enough time to complete the quest Ms Barra has embarked upon with, in her case, billions at stake.

Given what has been let go so far, that Holden has gone should come as no surprise and, for those who think Holden has been hard done by, it would be fair to say that the company was lucky to escape the chop for as long as it did.

GM was once a global company. But, while you were not looking, it has shrunk to just five locations.

The list of casualties is long.

In the year Ms Barra was put in charge, GM closed its operations in Indonesia which is a market that is heading for the magic number where average income breaks through to the level that people can afford cars. That is when sales take off like they did in China and will do in India.

That move sent an early message around the GM world that no matter how much potential a market might have in the future, if it did not have the strategies in place for it to be making “robust returns” then it would be cast off.

In 2015 GM pulled the Chevrolet brand out of Europe and in March 2017 agreed to sell Opel and Vauxhall operations in Europe to PSA Group. It turned its back on a 17 million sales market area!

Tellingly, GM had lost a billion dollars a year for a decade on its UK and European units and within a year PSA Group made it profitable. But, for GM, it was gone, too.

Then in May 2017, GM announced that it was closing its South African plant and would cease selling all Chevrolet products by the end of the year. Isuzu bought GM’s 30 per cent share of its business and took over the car plant and GM’s headquarters. But GM was gone and GM then went on to withdraw from other African markets as well.

The same month took $100 million charge when it closed its operations in Venezuela although there were extenuating circumstances; the government had seized the factory.

Also in 2017, it was announced that GM India would be closed down and the sale of Chevrolet vehicles halted; in spite of the fact that the Indian car market is set to overtake Japan as the world’s third-largest car market and the one with the largest growth potential.

As part of this move, GM sold one of its plants in India to its Chinese partner SIAC and another has been taken over by MG Motor India. GM was number five in the market at the time and most production was exported to Mexico and Latin America. This December GM announced it had sold another Indian plant to Great Wall Motors (which has also bought GM’s Thai operations).

In mid-2019 GM pulled out of Vietnam and handed its Hanoi plant and exclusive distribution and sales of Chevrolets over to Vietnam’s largest industrial conglomerate.

In December last year, just months ago, the broom swept through Russia when GM announced that it was selling its share of Russian manufacturing to AvtoVAZ, which makes the Lada. Chevrolet and Cadillac sales will continue; but that was said of Holden.

There are also some reports that GM has pulled out of Japan but sales there are so small (a few hundred – something Donald Trump points out frequently when commenting on the Japanese-US vehicle imbalance) that if GM has pulled out of Japan no-one has noticed.

Of course we now have the withdrawal of Holden as a brand from Australia and New Zealand and the closing of GM Thailand with the sale to its Thai plant to Great Wall Motors.

So GM is basically pulling back to North America (17 million market) and China (25 million production) and maintains GM Middle East, GM in Latin America and GM South Korea.

Of those, South Korea got the wobbles in 2018 and required restructuring. GM only has seven per cent share in South Korea and production in the former Daewoo plants had been hit when GM pulled Chevrolet out of Europe in 2014 and once PSA Group bought Vauxhall and Opel all orders on South Korean cars dried up and they were forced to close the Gunsan plant.

Sales in Korea nearly halved for a while in 2018. While they have recovered it is not the production powerhouse it once was.

There are a number of remarks that need to be made.

First: GM is no longer selling cars in any significant right-hand-drive market – the UK, Australia, Thailand, Indonesia, Japan (maybe), India, South Africa and New Zealand.

Second: GM is making way for two of the most significant Chinese car-makers (SAIC and Great Wall Motors) in terms of moves by China for access to Western car markets.

Third: It is clear that GM wants to be the world leader or one of the world leaders in EV and AV manufacturing and that it is relying on only its profitable internal combustion engine vehicles to pay their way through to the next technology.

GM is prepared to ‘strip the ship’ to get there and believes that if it is in a commanding position with the new EV and AV technology it will be able to buy its way back into the new world on the basis of its superior designs.

Let’s hope they know what they are doing.

By John Mellor