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More jobs go at Holden

Shadow of itself: From more than 20,000 employees in the 1970s, GM Holden has scaled back to little more than 6000.

White-collar redundancies confirmed as Holden shapes up for a new era

Holden logo26 Aug 2009


GM HOLDEN is set to shed more jobs with voluntary redundancies among engineering, sales and marketing staff at its Victorian head office and Lang Lang proving ground as it tries to wrestle the company back to profitability in the wake of the global financial crisis.

While the company – Australia’s largest automotive employer – says it has no firm targets or timeframes for the redundancy program, media speculation suggests it is looking for about 200 workers to clear their desks.

The company has now shed about 2000 jobs since 2005, most of them from the blue-collar workforce after the demise of the third shift at the Elizabeth assembly plant in South Australia, with the loss of 1500 workers, and closure last month of the four-cylinder engine factory which employed 500 people in Port Melbourne, Victoria.

In 40 years, the workforce of the once giant manufacturer has shrunk from more than 20,000 employees spread over six factories producing a whole range of cars and trucks in five states, to little more than 6000 today – a decline of almost 75 per cent.

 center imageLeft: GM Holden chairman and managing director Mark Reuss.

In Adelaide, the remaining 3300 workers in the two-shift Elizabeth car assembly operations have been working a single shift, week on/week off, to avoid further mass redundancies after the cancellation of Holden’s Pontiac G8 export program led a 70 per cent drop in exports, compounded by a 15 per cent decline in domestic Holden sales this year.

The company said the shared roster scheme at Elizabeth was designed to hold the workforce intact until its new small car came on stream at the plant in the third quarter of next year.

Holden, which lost $70 million last year on top of cumulative losses of almost $300 million in the three previous years, asked its white-collar workforce at its modern “HQ191” headquarters and technical centre in Fishermans Bend to take time off in April, by bringing forward annual leave or rostered days off, to help cut company costs.

Since then, some white collar jobs have been lost to natural attrition, but with at least some workers holding out for a redundancy offer, Holden has now wheeled out financial incentives.

The latest job cuts come just before a changing of the guard at Holden, with current chairman and managing director Mark Reuss heading back to the US this month to become GM vice-president of global vehicle engineering.

In June, Mr Reuss was asked at a media conference in Canberra if he could confirm that there would be no more job losses at Holden in the immediate future, he replied: “That’s correct.”

With cuts now announced, his successor, current executive director of sales, marketing and aftersales, Alan Batey, can move into the seat on September 1 with one less thing to worry about. Ironically, many of the current round of redundancies will come from his current area of responsibility – sales and marketing.

Holden spokesman Scott Whiffin said today that the redundancies were fundamentally about ensuring Holden had the right structure to be viable long-term.

"Our goal is to protect the core of what Holden is – a full-function organisation designing, engineering and building large and small cars," he said.

Mr Whiffin said a number of employees had been asking about availability of voluntary redundancy packages.

"We don’t think this will be totally out of left field for many of our people – a number of them have been asking about the availability of voluntary packages,” he said.

Mr Whiffin said some functions at Holden had remained “more or less untouched over the years”, despite changes elsewhere in the organisation as markets have contracted.

Some of the lost engineering jobs are no doubt linked to the scaling back of Holden’s global rear-drive platform program, which has delivered the VE Holden Commodore and export derivatives, as well as the Chevrolet Camaro.

New GM CEO Fritz Henderson has made it clear that these rear-drive products are on borrowed time at GM, and there is little scope for renewed Holden exports to the US beyond a proposed police car project.

Also, the development of Holden’s new small car, based on the same GM Delta II architecture as the new Cruze and latest generation Astra in Europe, is probably well in hand for next year’s launch.

Holden designers and engineers have worked on the hatch version of the small car to be built alongside a sibling sedan – thought to be a local version of the Cruze – and the Commodore sedan and ute ranges from the third quarter of 2010.

With that project heading into the production engineering stage and seemingly little to replace it on the drawing boards apart from regular model updates for the VE/WM ranges, Holden design and engineering would appear to be underemployed from its peak of about two years ago.

South Australian deputy premier and treasurer Kevin Foley credited the small-car program with saving Holden as its parent company in the US went through “its darkest days” in Chapter 11 bankruptcy.

“It has been a near-death experience for Holden, but it has bounced back in the most aggressive and the most successful manner possible,” Mr Foley said recently.

Earlier this year, Holden was granted a $200 million line of credit from the Australian government’s $200 million Export Finance and Insurance Corporation (EFIC) – a deal which was not made public until this month.

According to an EFIC statement, the line of credit – which Holden says has not been used – was to “provide support for GMH exports of vehicles, parts and engineering services to Europe, the Middle East, Africa and Asia as the Australian manufacturer establishes stronger market links under the newly created General Motors Company”.

Holden recently announced a fresh export deal to supply 20,000 V6 engines over four years to China from Holden’s High Feature V6 plant at Port Melbourne.

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