The Battle to Build the First Holden

Some people will say that  we live in an age of new technologies which have brought us a confusing array of new gadgets, gizmos and websites (including Twitter, the iPad, and Facebook).

A couple of generations ago, it was the Holden motor car that was the great technical innovation of its age. And as Andrew Sadauskas explains, if anyone deserves credit for getting them into our driveways, it’s a man who became one of us: Sir Laurence Hartnett.

Most Australian families these days have at least two cars in the garage. It’s a far cry from 1911, when there were only 3,975 cars registered in the whole of New South Wales, and even fewer (2,722) in Victoria. Back then, many Aussies had never even seen a ‘horseless carriage,’ much less driven in one!

Before the age of the motor car, people were a lot tougher. They relied on trains, horses, push-bikes, and walking to get around. For those living in the city (and not just Melbourne), travelling also often meant catching the tram (but that’s a story for another day).

Sure, obesity may have been far less common, but then again it’s never much fun to ride a push-bike on a hot humid day, nor is it fun walking home through a thunderstorm.

Early Holden History

As any good Holden fan will tell you, the origin of the iconic car company can be traced back to colonial Adelaide in 1856.  A mere twenty years European settlement of that fair city, an entrepreneur named James Alexander Holden set up his modest leather and saddlemaking shop in King William Street, Adelaide. To put the date into perspective, Burke and Wills as yet had not crossed the continent, and gold had only been discovered in Victoria three years earlier.

Around 1908, Holden’s began to do repair work on car upholstery, beginning over a century of involvement in the car industry for the firm. A few years later in 1914, the Holden company expanded, producing its first custom-made car body. (For the uninitiated, a ‘car chassis’ includes the underside, frame, wheels, and drive shaft, while the top half of a car is called a ‘car body.’)  It was, however, the outbreak of the ‘War to end all Wars’ in Europe that caused business to really pick up.

In 1917, the Australian government wartime trade restrictions order decreed that only one car body (or complete car) could be imported for each three chassis imported into Australia. There was strong public pressure to go further and ban car imports altogether. Cars were seen by many as a decadent frivolity for the wealthy and an immoral waste while our boys were at war. The restrictions were officially justified by the Government on the grounds of the amount of space cars took up in shipping containers; space that would be better served importing or exporting arms and equipment to our diggers.

As a result of the restrictions, local manufacturing of car bodies quickly became a major industry. In most countries, an American car company like General Motors would have exported an entire car in what was known as a ‘Complete Knock Down’ (CKD) kit, containing every last nut and bolt needed to put a car together (both chassis and body).

In Australia, the import restrictions meant that if General Motors wanted to sell its engines and chassis in Australia, it had to source its car bodies from a local company such as Holden’s.

Holden’s, in turn, struck a deal to only supply car bodies for General Motors chassis in 1924 and opened its Woodville plant in order to meet their demand. Over the coming years, many returning servicemen would find work as Holden’s opened more plants across the country. It was also around this time (1928)  that Holden’s hired George Rayner Hoff to design the iconic ‘lion and stone’ emblem that generations of Australians have come to know and love.

Auto Boom

The number of cars on our roads grew nearly exponentially in the years between the wars. In 1922, there were just 116,658 cars registered (in total) across all of Australia. By 1938, that number had increased five fold to 562,271.

This growth in the automotive industry saw the James Scullin Labor Government extend tariff protection to all Australian motor part or component manufacturers (instead of just the car body builders) as part of its Great Depression stimulus package.

The extended tariff restrictions meant that General Motors became increasingly dependent on its Australian partners. Unwilling to walk away from a rapidly growing and highly profitable market, in 1931 General Motors decided to take over Holden’s.

The Americans from General Motors expected that they could simply walk into Holden’s and the workers would follow their every wish, no matter how ludicrous it may have been in an Australian context. These men from Detroit failed to grasp how different Australia’s rugged terrain is from the flat plains of the American Midwest or the streets of Chicago. They also failed to grasp the tremendous pride the Aussie workers took in building their cars, or the fierce independence and practical nature of the Australian character.

It may have been self evident to the man on the street that Holden’s production methods were often both more efficient and advanced than GM’s. But the visiting senior managers just couldn’t bring themselves to accept that doing things as they were done ‘back home in Flint, Michigan’ might be unviable in Australia.

GM headquarters began hearing a string of ‘horror stories’ of blunt Aussies who dared to tell them that, given Australia’s population and conditions, American body designs and production methods were both impractical and uneconomical. Tensions grew between the “clever” Americans from General Motors and the hard working and practical Australians from Holden’s.  The GM managers resented the idea of Australians designing and building car bodies and simply wanted them to go back to assembling CDKs from Detroit.

A Good Company Man

General Motors decided that they needed someone well versed in the “GM way” to either take control of the Australian operation, or shut it down. So in 1934 Laurence ‘Larry’ Hartnett, who had impressed his superiors while working for General Motor’s Vauxhall operation in the UK, was sent out to Australia as the new Managing Director.

Born in Surrey, England, Hartnett had trained with the Royal Air Force as a pilot (though the war ended before he saw action). A short but solid man with black hair and a moustache, he brought with him not just a knowledge of the auto business, along with a lifelong passion and knowledge of all things mechanical, including aeroplanes and cars. He was known throughout GM as a loyal company man, having previously worked for General Motors in both India and Sweden.

General Motors in the U.S. were sure that he was just the man they needed to bring their Australian operations to heel. The Aussies were just glad they weren’t sending another Yank!

Unlike the Americans, Larry Hartnett got to know the Australian workers and management, and treated them with respect. Instead of running a “half-American half-Australian” company, he realised that local designs and resourcefulness were needed to meet local conditions.

He improved the frayed relations with the local car dealers (many of whom he personally visited), the Government, and the trade unions. Hartnett notes in his book “Big Wheels Little Wheels” that he found, for example, “Working with the trade unions, particularly the Motor Vehicle Builders’ Union, was a particularly happy experience for me.”

In the process, he turned the money-losing division into one which posted a million pound profit. His young family bought a property near Frankston in Melbourne’s outer south-east. Hartnett Drive and Sir Laurence Drive in nearby Seaford were later named in his honour. Meanwhile, a phenomenon to which we have grown accustomed happened along the way. As he settled down in Australia and came to know his workers, Hartnett fell in love with the country, and began identifying himself as an Australian.

As early as 1935, he began to realise that building local bodies on expensive imported chassis would not be viable long term. GMH would need to build a fully Australian car if they wanted to remain viable.

He reasoned that manufacturing cars locally would mean that there would be demand for a whole industry supplying components, as well as the raw materials to make them. By supporting the car industry, a Government would surely create a wealth of jobs in related fields.

Further, if Australia were to be invaded, the automotive plants and know-how could easily be deployed to build tanks, armoured vehicles, or aircraft engines.

But this was a vision that had to be put on hold for the time being, as on the other side of the world, history was about to intervene.