Articles by Sarah Martin

In a move that will increase pressure on unions to accept wage cuts proposed by the company, the Opposition Leader said the Coalition would support boosting a $275 million government grant to keep Holden making cars in Australia only if it was tied to cost reductions.“We would be prepared to look at further generous assistance but we'd want to make sure… Holden had credible plans to reduce their cost of production and to boost their volumes and the only way to boost their volumes is to have a serious export strategy,” he said.Opposition Treasury spokesman Joe Hockey said yesterday that only with a “very compelling case” would the Coalition increase subsidies to the carmaker.“The fact is there is already a massive amount of money being provided to the automotive industry. Unless there is a very compelling case put forward by Holden, you'd need to think twice about throwing more money to a… single manufacturer, where so many others in the manufacturing industry are doing it tough.”The Coalition's qualified support for more assistance came as Industry Minister Kim Carr described the company's claim for up to $265m more in taxpayer funds as an “extraordinary” figure. As revealed in The Australian, Holden wants government assistance almost doubled to $540m to remain in operation, or it will quit manufacturing in Australia in three years. Holden has said the figure is “speculative”.Negotiations over Holden's future have intensified in recent weeks after Holden general manager Mike Devereux said it would not survive as a local manufacturer without reducing costs. Wages account for about 65 per cent of the cost of vehicle manufacturing in Australia, which equates to more than $3000 a vehicle higher than General Motor's best practice.Workers are resisting the company's demand to cut workers' wages by about $10,000 a year, saying workers are not overpaid compared with similar employers. Holden is understood to need both a significant reduction in costs and an increase to government assistance for General Motors to approve a retooling of its Adelaide plant over the Christmas production break in preparation for two new vehicles.Senator Carr said he was unable to reveal details of negotiations with the carmaker, but warned that the Coalition's position would threaten Holden's operations. “The Liberal Party have a policy… position which would see the end of the automotive industry in Australia if implemented,” Senator Carr said. “The Labor government remains absolutely committed to ensuring we have a prosperous automotive industry.”A company spokesman said Mr Abbott's conditional offer of assistance aligned with the company's strategy to reduce costs. “We already have a laser-like focus on reducing our costs and improving our productivity; that is what we are discussing with the unions at the moment,” Holden spokesman Sean Poppit said. Negotiations on wage cuts were continuing with workers, who “have always been paid a fair and reasonable wage.” 

South Australia's Labor government yesterday warned the carmaker could announce the closure of its northern Adelaide plant by the end of the year, with Holden understood to be demanding more than the $275m it was promised last year to secure its operations in Australia until 2022.Holden also wants to revise an enterprise bargaining agreement with the unions, involving pay cuts of up to $200 a week for production workers. The carmaker's behind-the-scenes push for increased taxpayer assistance will reopen a policy divide between the Rudd government and the Coalition, which wants to reduce auto industry assistance by $500m.Under the $275m co-investment package announced by Julia Gillard in March last year, a $215m grant and $60m from the South Australian and Victorian governments was committed to secure a $1 billion investment from Holden to build two next-generation vehicles at the Adelaide plant.The Australian understands the company is now seeking up to $60m more from the state and federal governments to honour the commitment to build the new models. The initial $50m from the SA government is also under review since the company announced in April it was shedding almost a quarter of its workforce.Holden would not comment. Australian Manufacturing Workers' Union SA secretary John Camillo would not reveal how much additional funding was being sought, but confirmed the co-investment was under review.“They are seeking more funds in regards to replacing the Cruze and the Commodore,” he said. “They have made it quite clear that no matter what the workers do, if they do not get more support from the government they will not go forward with the Cruze and the Commodore.”Mr Camillo said workers were unlikely to accept a company proposal to significantly reduce wages for production workers at the company's Elizabeth factory, where 400 job cuts were being finalised. There are now just 1700 workers at the northern Adelaide factory, down from 5700 in 2005, and the company is asking workers to take pay cuts of up to $200 a week to help keep the plant open.Industry Minister Kim Carr said he was in discussions with Holden about the company's future operations. “We remain committed to supporting car manufacturing,” he said. Mr Carr's office refused to provide details on talks with Holden to finalise a funding contract.Holden also refused to reveal the amount of funding required to guarantee its Australian presence under present conditions. South Australian Manufacturing Minister Tom Kenyon said the company could announce the closure of its Elizabeth plant before the end of the year. “I am taking the possibility of a closure very, very seriously,” he said. 

The concern comes after jobs data revealed an unemployment spike in Adelaide's northern suburbs.Unemployment in the region has jumped to 9.4 per cent, almost 2 per cent higher than a year ago, and almost double the national average. The region now accounts for almost half of Adelaide's jobless, with 18,700 people of the 42,200 unemployed in the city -- about 44 per cent -- living in the northern suburbs.The participation rate remains steady, but an extra 3400 people are unemployed than in March 2012. Teenage unemployment is also on the rise, with 41.9 per cent of teenage jobseekers unemployed, compared with 33.1 per cent a year ago.A Holden spokesman said yesterday the company had begun the process of voluntary redundancies, but would not provide an update of how many workers had sought a package.The company has said it wants to cut 400 of its 2100 workers by August and has refused to rule out forced lay-offs. “It is a tough thing that we are going through at Holden at the moment,'' he said, “We will have to wait and see what happens with the actual process that we are going through, and if and when we get to a situation where we have to re-evaluate, we will make comment then.''Unions say the growing unemployment figures will make voluntary redundancies less likely. Manufacturing Workers Union spokesman John Camillo said market conditions in the north were very tough.“Our position is that we will not accept forced redundancies,'' he said.