Holden axes 170 workers in South Australia

GM HOLDEN has made 170 jobs at its Elizabeth facility in Adelaide redundant, citing reduced demand for its locally built Commodore and Cruze and the high Australian dollar.

It is the second round of lay-offs from the Australian arm of General Motors this year, after it cut more than 100 casual and fix-term contract jobs and reduced production at Elizabeth by around 10 per cent in February.

Voluntary packages will be offered for a period of two weeks, starting immediately, and will take effect by the end of the year.

The latest round of cuts comes despite a $275 million federal and state co-investment package announced in March, and after the company announced it would continue manufacturing two vehicle lines in Australia until at least 2022.

The move also comes just over a month after the company said it would close its manufacturing operations for a “small” but unspecified number of days before the end of this year in response to slow sales.

This latest batch of cuts also comes just months out from the start of production of the lighter, more efficient and higher-spec VF Commodore sedan in 2013.

Sales of the Holden Commodore have continued in the same direction as the rival Ford Falcon, dropping 27.4 per cent year on year to September 2012.

Holden’s other locally built model, the Cruze small car, has also experienced a double-digit fall, with sales slumping 11.3 per cent.

From top: Holden Commodore VF prototype current Commodore Cruze sedan.

In a statement released this afternoon, the company said the “difficult” move was crucial to ensuring the local manufacturing division remained viable across the next decade.

“Every effort has been taken to avoid this decision, including the use of market response days, however current new car demand necessitates a reduction to permanent employees at HVO (Holden Vehicle Operations),” it said.

“This move will better align production with customer requirements and projected future volume and is a necessary step to ensure that we are able to continue to have a viable manufacturing operation in Australia for the next decade.

“Situations like this are always difficult and this decision has not been made lightly. We will work together with employees and representatives to ensure that people are able to make informed decisions about their future.”

Holden says all employees will have access to a number of support services, and projects the required 170 cuts will come from voluntary separation packages (VSP) alone. It is unclear if the company will resort to forced redundancies if it cannot convince 170 staff to accept VSPs.

A statement from the office of the minister for industry and innovation Greg Combet said the government was “disappointed” in Holden’s decision to reduce the workforce, especially in light of its recent cash injection of $215 million.

“We will provide these workers with support to find alternative employment and to acquire new skills through Job Services Australia,” it said.

“Employment levels at Holden’s operations will depend on a raft of factors over coming years, not least the value of the Australian dollar and the company’s ability to pursue export opportunities.”

The government also said the decision demonstrated the need for continued investment in automotive manufacturing in Australia, and said the federal opposition’s policies would “lead to wide-scale factory closures and the loss of tens of thousands of jobs.” The news comes less than a month after fellow Australian manufacturer Ford announced it would have to forcibly lay-off more than 200 staff from its Victorian operations after only 118 accepted voluntary redundancies offered during September and October.

This figure still adds up to less than the 440 VSPs Ford announced it would seek in July, after it created more than 100 new jobs in product development and its Ford Performance Vehicles (FPV) division, which officially goes in-house from January 1.