THE RELUCTANT GIANT

Harry Phillips, the then regional director of GM thought the idea was ‘silly’.

It's ironic, when you consider the vast profits GMH now make each year out of the Holden car, to realise that the General Motors Corporation did not want to manufacture in Australia. They were so used to big-volume production in America, with millions of cars rolling off assembly lines, that they really thought it was silly for anyone to suggest that they should make complete cars in such a small market as this. They not only thought it; they said so, too. Not long after my talk with Chifley, Harry Phillips, the then regional director for GM, came out to Australia. I spoke to him of my ambition to see complete cars made here. Phillips made an impatient gesture and said, “Larry, you’re talking silly. In a country of this size you won’t have the volume. What you're considering is simply uneconomic. It can’t be done.” He was still holding forth in my office at Fishermen’s Bend on the impossibility of the scheme when dear old John Sonnerdale, of Sonnerdale's Gears, came into the room. Phillips asked Sonnerdale his opinion. I'll never forget the old man's reply.

“When I was a young lad on a sailing-ship,” he said, “we called in at New York during a summer in the 1880s. There was a great rumpus about building a new bridge over the Hudson. Some said they ought to buy the bridge in England or in Europe, bring it over in pieces and erect it. Others thought it should be made in America of American steel. Someone, I think he was in the Government, said, “If we have it made in America of American steel we’ll have both the bridge and the dollars. The same thing applies to an Australian car. We want cars, lots of them and more and more in the years to come and maybe we won’t be able to afford to import them. Well, we might make mistakes, and it might be uneconomic, but if we make them in our own back yard, we’ll get the kind of car we want and we’ll have the cars and the pounds. Mr. Phillips, I think an Australian car is inevitable.”

In spite of Phillips’s cool response, and the realisation that the rest of the GM hierarchy in New York would be equally cold to the idea, I organised my team at Fishermen's Bend in the preparation of our “Case for an Australian Car”. That team did a terrific job. We produced a regular manifesto, with graphs, curves, and documents to support our argument. We got right down to basic essentials of the country's economy, charted the earnings of Australia by income-levels, the price of petrol and oil, national savings, the number of people who had savings, and the amount of those savings. We ferreted out figures showing the average mileage run by cars in Australia, and we worked out that 24/6 a week spent on motoring would give us a volume of 30,000 cars. In the 1940s, of course, prices were much lower than they were in the 1960s.

After the extensive letter was sent to New York, we studied the economics of the car itself. We set out the requirements of the ideal car to achieve this volume and for Australian conditions: its weight, horse-power, track, wheelbase, carrying capacity, range, and its price-between £485 and £520. (There was very little sales tax on cars then, Today it’s 25%) The price we arrived at would be with today’s inflation, plus sales tax, the equivalent of about £850 or £890 at present.

There it was on paper: the car the country could afford, the car the country must have. Now we had to convince General Motors that it should be made. I took our dossiers off to New York to present our case to the Executive PostWar Planning Committee of GM. Committees such as this one consist of the Vice-presidents of General Motors: engineering, finance, marketing, production. They’re highly democratic and their discussions are on a semi-formal plane–everything put to them is talked about, argued over, decided on. A bit of internal GM politics comes into it, but not much. These well-constituted committees contribute greatly to GM’s efficiency and help to account for GM’s strength and enormous growth.

Ed Riley, general manager of GM Overseas Operations, came to the station with his wife to meet me, and whisked me straight off to their farm outside New York. The city was blistering in one of its worst heat-waves. The Rileys suggested that on the farm we’d be able to “alleviate the heat and have a talk”. On the drive to the farm I told Riley briefly of the thorough job we had done in designing an Australian car for Australian conditions. His reaction to my enthusiastic news was a shock to me. He seemed offhand, even uninterested. He said, “All right, Larry; if you think you’ve a case, put it up, but I don’t like your chances.” I didn’t argue with him. His tone and attitude showed he had something else on his mind, something which, to him, was more important at that moment than my ambitions for a car project in far-away Australia. I changed the subject, and waited, I knew I’d hear before long what was stewing in his head. Two days later, after I’d rested, relaxed and got my land legs again, Ed came to me with a “Let’s you and me have a chat, Larry.” And then he began a most determined campaign to sell me on the idea of coming to work in America. No wonder, I thought, he hadn't shown interest in the Australian car project: he had hopes that I’d forget about the car when he told me of the job he had in mind for me.

“Larry,” he said, “this is your really big chance. If you come over here with us, you’ll be one of the three senior men in General Motors Overseas Corporation.'”

"I listened to his proposition, and then told him I could not accept. I had no intention of leaving Australia. When he realised I would not change my mind, he dropped the subject. I was able to enjoy the last couple of days before going to New York to prepare, with Jack Horn, for the presentation of the submission. And what a presentation it was to be! No simple matter this, but a big buildup, in the Hollywood tradition. Americans love the “big sell”. They were going to get one. "

To be continued…