News - Holden
Holden helps soak up GM shareholder dividends
General Motors financial chief lays part of hardship blame on Holden’s struggle
9 Aug 2013
By BARRY PARK
US CAR-making giant General Motors has pinned part of the blame for failing to deliver a dividend to shareholders squarely on the problems of Australian subsidiary Holden.
Former Morgan Stanley banker Dan Ammann, who joined GM as the company’s chief financial officer in 2010, told Reuters overnight that Holden’s struggle against a declining Japanese yen – Japan’s central bank has devalued its currency by almost 20 per cent to help its exporters – had created “competitive challenges for GM”.
"We're seeing more pressure in those markets (South-east Asia and Australia) than in the US," he said.
GM’s international operations, which includes Australia, made a $US100 million loss in the second quarter of this year.
The car-maker’s accounts, released late last month, revealed that sales in the region dropped by 27,000 units between March and June this year compared with the same three-month period last year.
At the time, Mr Ammann said price pressures in the region were to blame for the slide, adding “challenges with competitive pressure as a result of the (weaker) yen, particularly in South-east Asia” as well as Australia.
In contrast, it was able to charge more for the cars it was selling in other parts of the world, boosting its bottom line by $US400 million.
GoAuto contacted Holden for comment.
The revelation comes a day after an industry expert warned a change of government could spell the end for car-makers in Australia.
Meanwhile, Holden’s blue-collar workers at its South Australian and Victorian production lines will vote on Tuesday over a string of new award conditions that will introduce two years of pay freezes, tighter conditions for overtime pay, and a holiday from strict union conditions such as extended leave to attend union-based functions.
For the first time, the changes to work conditions will make “inefficiency” – not defined by the car-maker – and “malingering” – pretending to be sick to get out of work – sackable offences.
Australian Council of Trade Unions president Gerardine Kearney told the National Press Club in Canberra on Tuesday that Holden’s $15 million in savings that will come out of the deal were difficult, but important to both the car-maker and its struggling suppliers.
"We've done it (changed award conditions) before,” Ms Kearney said. “Back in the 1980s we sacrificed a three per cent pay rise to implement superannuation.
"I hope they (Holden) look to the long-term viability of that industry and that company."
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