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Minister blasts Holden jobs deal record

Pay pain: Holden has received a serve from federal employment minister Eric Abetz over its costly sweeteners to workers ahead of its decision to quit Australia.

Holden paid workers over the odds while accepting $2b in aid, says minister

Holden logo29 Jan 2014

GM HOLDEN paid its apprentice workers double the award rate, provided a so-called “hardship payment” of $3750 in lump-sum hand-outs to employees and handed over human resource management to the union as part of a 2012 workplace deal, according to federal employment minister Eric Abetz.

In a scathing assessment of the doomed Australian car-maker’s workplace negotiating skills, Senator Abetz said Holden granted its workers 11 above-average wage increases since 1994 while accepting more than $2 billion in tax-payer funded assistance over the past 12 years.

Senator Abetz’s blast for the Australian subsidiary of General Motors came in a speech last night to The Sydney Institute in which he presented Holden as an employer that caved into unreasonable union demands.

Holden has announced it will close its manufacturing plants in South Australia and Victoria from the end of 2017, while also axing hundreds of engineering jobs and closing its Lang Lang proving ground.

The company blamed cost pressures in Australia, saying it was not viable to continue making cars here.

Senator Abetz used the speech to announce he intended to intervene in the battle to save the last remaining car-maker in Australia, Toyota, which is seeking a worker vote to amend work practices at its Altona factory in Victoria (see separate story).

 center imageLeft: Federal employment minister Eric Abetz.

The minister said that as shadow minister it was always disappointing to see “weak-kneed employers” caving in to unreasonable union demands then coming to him advocating workplace relations reform, “effectively blaming the system for their own shortcomings”.

“In some cases, their history of cave-ins was longstanding, even during times when the system was arguably more in their favour,” he said.

“As minister, this phenomenon is now even more frustrating. I have often wondered why they couldn’t just say ‘no’ from the outset?” Senator Abetz quoted from a 2012 newspaper article on a Holden enterprise bargaining agreement deal in which workers would get a 18.3 per cent minimum income increase over three years “with a potential for that to rise to 22.3 per cent by the end of the agreement”.

Senator Abetz said this “landmark” agreement included: * More than double the award rate for apprentices * A so-called “hardship payment” of $3750 in lump sum hand-outs to employees and up to 2 per cent of base salary “gain share” payment for each year of the agreement on top of the other wage increases * Handing over human resource management to the union, with a requirement that unions must be consulted prior to hiring casuals, contractors, or other supplementary labour and union officials having the right to participate in committees such as the Dispute Resolution Panel for performance-assessment disputes and * The spreading of hours of work and methods of working shifts may be altered only by mutual agreement between Holden and the relevant union representatives.

“Barely one month later, the then-prime minister Julia Gillard announced an additional $275 million in government subsidies for Holden, which she claimed would ‘guarantee’ its manufacturing operations in Australia until 2022,” Senator Abetz said.

“A rough back-of-the-envelope calculation suggested that much of Ms Gillard’s new funding would simply go towards paying for the excessive wage increases that her union friends had just convinced Holden to agree to.

“Some of us may well ask whether the two events were related, or simply one great big enormous coincidence.

“It is a matter of record that shortly after this agreement took effect, Holden realised that it had made a terrible mistake and was seeking to vary the agreement to reduce the size of the wage increases.” Senator Abetz said that while a range of factors would have contributed to Holden’s decision to quit Australian manufacturing, “it’s very clear that the workplace relations arrangements created huge cost pressures on their operation”.

“To be frank, this is a prime example of what happens in IR club-style deals when unions make inappropriate claims and employers don’t say no,” he said.

“Both parties are responsible. And the taxpayer is called in to subsidise.”

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