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Holden calls on workforce to cut costs

Shakey ground: South Australia’s manufacturing minister Tom Kenyon believes Holden’s threats carry some force behind them.

GM Holden to do ‘whatever it takes’ to reduce labour costs, stay alive in Australia

18 Jun 2013

GM HOLDEN has flagged pay cuts and even more possible job losses ahead of a radical move to save its Australian car-making business.

Workers at the car-maker’s Adelaide and Port Melbourne plants will be asked to vote on an amendment to an enterprise bargaining agreement struck last year, which will help Holden improve its competitiveness and save on the $3750 extra the company says it costs to build cars here compared to other countries overseas.

Holden chairman and managing director Mike Devereux was scheduled to fly to Holden’s Elizabeth plant on the outskirts of Adelaide earlier today, but cancelled his trip after heavy fog in Adelaide turned back his flight.

Mr Devereux said the car-maker would do “whatever it takes” to keep building vehicles here after the company posted a $152.8 million loss for 2012, which was largely attributable to reduced market demand for its locally built cars and limited export opportunities due to the high Australian dollar.

The company is currently working through the latest round of job cuts announced in April, which will see about 400 workers made redundant at Elizabeth and a further 100 jobs lost in Victoria across pre-production workers at Fishermens Bend in Melbourne and validation staff at the Lang Lang proving ground in Gippsland.

 center imageLeft: Holden chairman and managing director Mike Devereux.

These followed 270 job cuts last year, with 100 workers made redundant in February and a further 170 in November – part of a downsizing movement that has seen Holden cut its workforce at Elizabeth alone by more than half over the past decade.

“The ongoing speculation about the future of the industry affects our employees and their families they’re doing it tough right now,” Mr Devereux said.

“All options for improving productivity are on the table. We will work closely with the unions and our people to develop a fair and reasonable proposal in line with other local manufacturers across all industries.”

Employees at Holden have already tightened their belt for the company, sharing shifts and dropping wages during the 2009 global credit crunch that saw the car-maker lose 50,000 US exports almost overnight. Holden says it later rewarded workers’ sacrifices with almost $4000 in cash bonuses.

“The largest penalty we face is labour cost, and today’s announcement begins discussions to achieve labour-related cost reductions and productivity improvements,” Mr Devereux said.

“Today’s announcement is the next step in addressing this.

“Securing our future is going to require commitment from all stakeholders that’s Holden and probably General Motors globally, that’s the Australian government at the state and federal level and also Holden’s own workforce.

“Achieving our next-generation vehicle program will require everyone’s commitment.

“Now GM has committed about $1 billion for the next-generation (Commodore replacement) program along with the federal and state government’s $275 million in co-investment, largely as capital attraction assistance,” he said.

Holden received a $275 million grant from the public purse in March last year to help it build two new models on global architectures at the Adelaide production line from 2016, which will be a new-generation Commodore and Cruze.

The company, which has received at least $2.1 billion in government assistance since 2001, remains committed to local manufacturing until 2022, but Mr Devereux today continued to call on both sides of federal politics to provide “clear, consistent government policy for a long period of time” in order to secure its long-term future in Australia.

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