Holden slows production at Elizabeth

HOLDEN will close its manufacturing operations at Elizabeth in South Australia for a “small” but unspecified number of days before the end of the year in response to slow sales of its Australian-built models.

The company has confirmed it will be in “closedown” next week, but stressed that this stoppage has been scheduled since last year and is required to make the “necessary changes and upgrades to the plant” in preparation for the 2013 VF Commodore.

However, Holden has also admitted it has been forced to take “market response measures” and will close the Elizabeth plant on “a small number” of individual days over the coming months as it works to better align its production with the current sales rate.

Sales of Holden’s locally manufactured vehicles fell 23.8 per cent in August, leaving the company just 1.1 per cent ahead year-to-date compared to the same period in 2011.

The Commodore has been hit hardest, with VFACTS figures to the end of August showing that sales of the large car had fallen 26.8 per cent this year, to 20,694 units, while the Commodore-based utility is down 19.4 per cent YTD (5474).

Sales of the long-wheelbase Caprice are down 11.5 per cent so far this year (1078), and the Cruze small car is also struggling, despite its position in Australia’s biggest-selling segment.

Cruze sales are down 7.7 per cent YTD on 20,940 units, placing it ahead of the Commodore but also including an 18.7 per cent sales decline in August.

Compounding the problem are ongoing difficulties Holden is experiencing in its traditional export markets.

In a statement issued yesterday, Holden said it had informed employees “that in response to market fluctuations, a small number of ‘market response’ days would be introduced into the production schedule between now and the end of 2012”.

“We worked closely with our senior employee representatives to identify the most appropriate days and this market response is covered under the 2011 Enterprise Agreement between Holden and its employees,” the company said.

“These market response days represent less than four per cent of Holden’s total production for 2012 and are a common measure for aligning production with demand in a competitive marketplace.

“It is crucial for the long-term health of Holden manufacturing that we are able to stay lean and respond to the market.

“All employees not working on these days are entitled to 60 per cent pay and have the option to ‘top up’ their wages with a variety of other entitlements including long-service leave.

“Holden will also use this opportunity to carry out important upgrades, maintenance and engineering work to our Elizabeth facility.”

The production slowdown follows Holden’s announcement in February that it was cutting more than 100 jobs at the Elizabeth plant.

This was to take place through natural attrition of permanent workers who quit and a culling of temporary and contract workers, as the company returned from two shifts to one on its assembly line by the end of May.

In March, Holden announced that it would continue manufacturing in Australia until at least 2022 after securing $275 million in government funding and committing to a billion-dollar program based on two all-new next-generation global vehicle architectures.

As GoAuto has reported, the deal secures Holden’s Elizabeth operations for the next 10 years, retaining thousands of jobs and generating an estimated $4 billion in value to the national economy.

However, the future of Holden’s Victorian-based engineering and design divisions – currently with more than 1000 employees – is less certain with the switch to globalised GM platforms.