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Holden cuts a hit to local manufacturing

  • By Stuart Martin
  • The Advertiser
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    Holden says none of the 2400 permanent full-time Holden staff will lose their jobs.

Australian car manufacturing has taken another hit.

As Holden leans down its Adelaide workforce further in the shadow of a strong Australian dollar, anywhere between 100 and 200 casual staff will be cut from the Elizabeth factory's workforce. However Holden says none of the 2400 permanent full-time Holden staff will lose their jobs.

What will change is the time they start work - afternoon shift general assembly workers start at 3pm but will - by April - be transferred to dayshift, which kicks off at around 6am.

Holden chairman and managing director Mike Devereux says the plan to build just over 100,000 cars in 2012 has been reduced to 90,000 (the same as was made in 2011).

Mr Devereux detailed how the single general assembly shift would have a line rate speed of 60 seconds per cycle (down from 104), with more workers completing fewer tasks.

The Holden boss says they are selling a richer model mix of both locally built cars but the new addition was taking up more of the line.

"We're seeing more Cruzes being built, as well as a richening of our Commodore mix, we sell a significantly rich mix of Cruze. You'll see Cruze go from strength from strength and probably take an ever-increasing portion of our plant," he said.

The plant had been ramping up in expectation of improved export volumes but ongoing currency strength has eroded export sales growth.

"We've got a pretty stable domestic business model, we're making the same number of cars in 2012 as in 2011, but we're not going to see the growth on what I think is the best police car on the planet when we compete with Ford and Dodge who deal in US dollars, it was done on 85-90 US cents and we're selling them on a $1.07US," Mr Devereux says.

The US police car export program was still very much alive, according to the Holden boss, who would have liked to capture between 20 and 25 per cent of the 70,000 unit program but would not talk specifics on how many police cars had already been exported.

"Exports are icing on the cake for us and we will opportunistically go after them when it makes sense," he said.

"We're going to sell thousands, but I would have like to have been in the five-figure range - I would have liked to have 20 to 25 per cent of 70,000 a year market in the US, but again we're dealing with Ford and Dodge, we have to price them to make money," he said.

"The police car program is very much alive, we will sell thousands and we put them on boats every month - I just wish we could sell more of them."

Holden had hoped to regain some lost ground in its Middle East export market - sitting around 4000 units but well down on the peak sales in that region around 31,000 in 2006.

"When Crown Victoria ended, we were hoping to see increased Caprice sales but our plans were on a 90 US cent Aussie dollar, which has impacted on our plans to go after that market - you can't discount and lose money, that's not a smart business decision," he said.

General Motors upcoming introduction of Opel to a market already crowded with more than 60 brands was unlikely to impact greatly on the domestic sales growth of Cruze for Holden, says Mr Devereux.

"Astra will be competing with European product that are $2000-3000 more expensive on a feature basis than a similarly-equipped Cruze, they are different buyers to those buying Mazda3, Corollas and Cruzes. Are we going to have a few buy an Astra because they own a Holden Astra and they like it? Sure, that's going to happen but we don't see a huge amount of cannibilisation," he says.

Mr Devereux said co-investment talks with state and federal governments were ongoing but he was not advocating any legislative measures to offset currency pressures.

"I think Australia made a decision decades ago to be an open market, which benefits consumers with prices coming down, manufacturers get pressure to become competuitive and we have done that. It upsets me when I hear people say Australian car companies should make what people want to buy - I think we do, we make two of the top five cars in the country in the same dam plant."

"We can't go back to protectionism but we can play the game the way everyone else does - UK, USA, Germany, Russia - either you have a big wall or you co-invest to attract hundreds of millions in investment capital," he said.

Comments on this story

Displaying 1 of 1 comments

  • Right Holden is not worried about competition from Opel? From what I remember reading they try to block Opel from coming in. They stupidly traded Euro Astra for Cruze when Astra was the top5 seller even on its last days. The Barina now is a joke consider Daewoo is a very poor Korean version of the great Hyundai and Kia, how can Holden niche themselve further this time. Commodore is a great car but Cruze is not a brand builder that they need now comparing to the host of newer models coming in the next years. I know people bought Astra and Barina from Holden cos they are aware it's from Europe but now they all turn off it because it's a glorified Daewoo. Fair or not its the reality that they are in now.

    PT Posted on 03 February 2012 11:36am

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