Holden has reassured workers at its Elizabeth car factory that the company is here to stay until 2022 despite the axing of 170 jobs before Christmas - and despite one analyst forecasting a closure was imminent.
It is the second redundancy program this year, following 100 job losses in February, and industry experts have warned more cutbacks are likely over the next five years as Holden scales back its production to meet falling consumer demand for its locally made cars.
“We’re not planning on announcing any further redundancies any time soon,” said Holden spokesman Craig Cheetham. “However, it’s critical to the long term health of Holden that we’re able to be responsive to the market and to align production with demand.
“The responsible thing to do is to take action to make sure we have viable manufacturing operations in Australia, which is something we intend to do for the next decade.”
Holden is on track to post its lowest annual sales in 19 years in an all-time record market as Commodore deliveries hit new lows and demand for the Cruze small car weakens in the face of cheaper imported competition buoyed by the strong Australian dollar.
In February, Holden wound back production to 400 cars per day. After the latest cutbacks, Holden says it will still produce vehicles at a rate of 400 a day – but last month it announced an increase in the number of rostered “down” days that the company calls “market response days”.
Holden is hoping for a reversal of fortunes when an updated version of the Commodore goes on sale in the middle of next year – to try and attract Australian buyers who have swung heavily in favour of small cars and SUVs.
Holden will also recommence an export program to North America by the end of 2013, selling the Commodore as a performance Chevrolet SS sedan. But once again Holden will be hampered by exchange rates; at the current levels it is forecasting only modest export numbers.
Workers and union officials were told late this afternoon of the job cuts – the second round since February. Holden says the cutbacks are unrelated to the shutdown of major parts supplier Autodom.
Indeed, as workers were being told of the latest cutbacks, the boss of Holden Mike Devereux was in a meeting with industry peers trying to mount a rescue package following the collapse of Autodom, a critical supplier to Holden, Ford and Toyota. “I wouldn’t say it’s directly related,” Cheetham said. “We had already decided that we needed to take action to react to the market.”
Holden said workers who apply for redundancy will finish on December 14, when the factory closes for the summer break. But redundant workers will be paid through the holiday period. “We fully anticipate all separations will be voluntary,” Cheetham said. “They will be done in line with our EBA conditions.”
The executive director of manufacturing at Holden’s vehicle operations, Richard Phillips, said: “Due to a reduction in demand for our Australian built models, led by a sustained high Australian dollar, combined with one of the world’s most open and competitive car markets, we have a need to reduce the size of our workforce through a voluntary separation program.
“Situations like this are always difficult and this decision has not been made lightly. We will work together with employees and their representatives to ensure that people are able to make informed decisions about their future.”
Holden says latest round of 170 job cuts will bring its Adelaide workforce to just under 2100. “The industry at the moment in Australia is very trade exposed,” said Cheetham. “The pricing of imported cars – in particular the small car segment -- is more competitive than ever because of strong currency and excess capacity in other countries.”
Meanwhile, Holden and the Federal Government had their case against Fairfax Media upheld in the NSW Supreme Court yesterday. Last month, the Fairfax-owned Australian Financial Review newspaper was accidentally emailed a copy of secret government briefing documents about Holden’s future financing and model plans, prepared for Industry Minister Greg Combet late last year. The paper was accidentally sent the original copy after first being sent a version with large sections of text blacked out. Holden and the Federal Government took legal action to prevent the documents from being published.