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Another 500 jobs go at Holden

Heavy metal: GM Holden’s existing body shop is set to be superseded by an all-new facility now being built in South Australia, opening the door for a new generation of vehicles.

Holden cuts 400 manufacturing jobs at Elizabeth, 100 development jobs in Victoria

Holden logo8 Apr 2013

GM HOLDEN will slow production at its Elizabeth plant in South Australia from 400 cars per day to 335, with the loss of 400 jobs, while a further 100 hourly positions will go in Victoria.

The Victorian jobs will be lost across pre-production workers at Fishermens Bend in Melbourne and validation staff at the Lang Lang proving ground in Gippsland.

Recent Holden redundancies are stacking up, as the latest round of cuts come just months after it shed a total of 270 production jobs last year, with 170 in November and 100 in February.

This is despite Holden having received almost $2 billion in government assistance since 2001 to help it stay competitive against imports.

The cuts and production slowdown come as Holden prepares to launch the heavily updated, much anticipated VF Commodore and is in the midst of rolling out a revised and re-priced Cruze small car, both of which are built in Australia.

Just 1606 Commodores were sold last month, slipping 40.2 per cent year-on-year and dropping out of the top 10 for the first time in its 34-year history, while Cruze sales fell 19 per cent to 2335 units.

Holden blames the production cuts on the high Australian dollar and reduced demand for the Cruze, which are linked as importers are making the most of exchange rates to aggressively price and specify competing products.

In a statement, Holden chairman and managing director Mike Devereux described the Australian automotive industry as “heavily trade exposed”.

“The appreciation of the currency means that making things in this country is 60 per cent more expensive than it was 10 years ago. The currency is the strongest it’s been in more than 30 years,” he said.

“We have made significant productivity gains but are witnessing a structural shift in the Australian market which favours importers due to a sustained high Australian dollar and extremely low tariffs. This perfect storm of economic conditions has put intense pressure on the local industry.

“The Holden Cruze and Commodore continue to be successful despite our challenging market – they are both still top 10 selling cars – but the value of the dollar and the currency plays being made by other countries mean we are not competing on a level playing field, even in our own backyard.

“Not only are we challenged to compete locally, but high volume export opportunities are not possible due to the strength of the Aussie dollar and the measures other countries take to fiercely protect their own local automotive industry.”

Mr Devereux also attributed cuts to product development staff – who work on international GM projects as well as internal ones for Holden – to the high Aussie dollar.

“We are competing globally for work with a historically high Australian dollar. This means we are now one of the most expensive engineering centres for GM in the world. We simply can’t secure the necessary workload to maintain our current hourly product development workforce,” he said.

Holden says voluntary separation packages will be offered and that those affected by the cuts will be offered financial counselling and help finding alternative work.

“Our priority at this time is to support our employees,” promised Mr Devereux.

“The steps we’ve announced today are critical to ensuring the competitiveness of two of our most important products ever – the new VF Commodore and significantly updated Cruze,” he said.

Despite the high Aussie dollar, Mr Devereux said exports had remained quite stable, with 5000-6000 cars sent to the Middle East each year.

Between 3000 and 4000 Chevrolet Caprice police vehicles exported to the US last year and a similar number expected this year, although greater volumes would be preferred.

“Our business case for that police car export program was certainly for many more than we are selling but our business case for that program was also done at around 88 Aussie cents to the dollar,” said Mr Devereux.

An export programme for the Chevrolet SS Performance – based on the VF Commodore – will add more to the total starting from the third or fourth quarter of this year, with around 5000 units per year mooted.

But Mr Devereux said Holden exports were “niche”.

“They are not super-high exports as we had pre-GFC with the Pontiac G8 program which I believe was upwards of 35,000-40,000 of one model to one country, we are not talking about those numbers.

“Even in the face of the high dollar we are proud of the fact that we have a relatively stable niche export program.”

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