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Holden mulling staff cuts

Tough decisions: GM Holden's headquarters might be home to fewer workers.

Holden is likely to follow GM’s lead and cut staff in line with reduced demand

Holden logo11 Feb 2009

GM HOLDEN is considering some “tough decisions” on manning levels as part of a move by parent company General Motors to cut 10,000 white-collar workers around the world by the end of April.

Remaining US executives’ base pay will be cut 10 per cent, while salaries of “many others” will be cut by between three and seven per cent.

The GM staff cuts were announced overnight in Detroit as part of GM’s efforts to prove it can be a viable company and, therefore, be eligible for the $US13.4 billion ($A20.5b) of loans it has requested from the US congress.

The company’s final submission will go to congress next week.

Holden spokesman Scott Whiffin said: “We are obviously looking at everything.” However, he pointed out that the US announcement did not trigger any immediate reaction from Holden.

“It’s no secret the outlook for ’09 is extremely challenging . We’ve got shrinking local and export markets that are having an impact on our sales volumes and manufacturing schedules.”

The cuts announced in the US would reduce GM’s white-collar workforce by 14 per cent to 63,000 around the world.

About 3400 jobs will go in the US and a further 4000 in Europe at the Vauxhall, Opel and Saab operations, GM said in a release to the market. The rest will come from other regions, which include Korea, China and Australia.

“These difficult actions are necessitated by a severe drop in vehicle sales worldwide and by the need to restructure GM for long-term viability,” the release said.

The latest cuts are part of an overall program revealed on December 2 to reduce GM’s US total workforce by almost a third from 96,000 to between 65,000 and 67,000 workers.

In Australia, Holden was wrestling with the question of how to make cuts in line with market conditions while maintaining a business model that would allow it to be strong and profitable in the long term, Mr Whiffin said.

“We are facing some really big challenges and, therefore, some really tough decisions, but none of those decisions have been taken yet.

“The question is how do we structure the company to protect it, both for Australia and for future generations. They are really profound questions we are asking ourselves.”

While no details are yet available, it is expected cuts will be made in Holden’s design and development operations as a result of decisions taken in Detroit to cut certain vehicle programs. This would result in job losses both at Fishermans Bend and possibly also at the Lang Lang proving ground.

However, the issue might not be quite as pressing in Australia, where sales have been down an average 15 to 18 per cent in the last few months. Since late 2008, monthly sales in the US have been down more than 30 per cent as the credit markets simply froze up and buyers could not obtain car loans.

In November, Holden signaled it would dramatically slow its assembly line at Elizabeth in South Australia by inserting another 25 shutdown days in the three months to March this year.

In a deal done with the Manufacturing Workers Union, the 3400 assembly employees will be taking a mixture of paid days off, annual leave and “market response days” on part pay in a bid to avoid retrenchments. Average pay for the workers will dip by about 10 per cent as a result.

Last September Holden started cutting an unspecified number of contract design and engineering positions as a result of the cancellation of several world vehicle projects.

The company has also been hit by the parent company’s move away from large rear-wheel drive cars, for which the Fishermans Bend design and development centre played a leading role.

Read more:

Holden slashes production by 14,000

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