Holden funding didn't save jobs

Holden has received $2.17 billion of taxpayer assistance over the past 12 years without being required to guarantee a single Australian job.

The revelation came in the wake of Holden’s announcement it would axe 500 jobs -- the car maker’s largest single redundancy since the Global Financial Crisis. Holden will offer voluntary redundancies to 400 workers at its Elizabeth car factory near Adelaide and 100 engineers based in Melbourne.

It will take Holden’s production line workforce down to 1750 after a peak of 7350 in 2004. News Limited understands job security will form part of any future taxpayer funding of Holden’s manufacturing projects, but company executives confirmed yesterday job numbers had not been a part of past agreements.

“There are no guarantees as to how many cars will be sold in Australia [between 2016 and 2022]. I also cannot guarantee how many human beings I will need to make those cars,” said Holden boss Mike Devereux.

Claims that the latest Holden job cuts breached a funding agreement with the South Australian government were incorrect, Mr Devereux said. “We are yet to put pen to paper,” he said, adding that Holden does not yet have a contract with the South Australian government that guarantees job security.

The latest job losses come just one week after Holden released figures that showed it had received $2.17 billion in government funding over the past 12 years, roughly twice as much as what Ford ($1.1 billion) and Toyota ($1.2 billion) received over the same period.

Meanwhile, it is the first time in memory Holden has publicly announced a redundancy program for engineers. The move comes as most of the work done on the new Commodore has been completed before it goes on sale in June.

The engineering losses are also confirmation that Holden is no longer the engineering “home room” for any particular General Motors vehicle, and its future locally-made cars will instead be adaptations of global models.

The 500 job losses announced yesterday follow 180 job cuts at Elizabeth in November 2012, and a further 40 at the Port Melbourne engine plant in March 2012.

It is the biggest single redundancy program since Holden axed 500 positions in July 2009 in the wake of the GFC, after exports of the Commodore to the USA ended when the Pontiac brand was shut down.

The latest cutbacks take the Holden factory workforce down to 1750 jobs, while engineering will shrink from 675 positions to 575. By comparison, Ford Australia employs about 1100 engineers, most of whom work of overseas vehicle programs even though they are based locally.

The latest job cuts are yet another grim reality facing the Australian car industry as it struggles to compete with cheap import cars aided by the strong Australian dollar.

Last year Ford axed 340 jobs (to take its workforce at Broadmeadows and Geelong to 1500) while Toyota axed 350 manufacturing positions, to take its head-count to 2500 at its Altona facility.

Holden said the job cuts were due primarily to a reduction in demand for its locally-made Cruze small car “led by the high Australian dollar, combined with one of the most open and competitive car markets in the world”.

The restructure will see Holden build 335 cars per day from August, instead of the 400 cars a day it currently builds during each daily eight-hour shift.

Holden boss Mike Devereux said: “A workforce reduction is always the last resort and Holden has taken every possible step to address our challenges over the past 12 months. This is a very difficult decision because people and their families are involved. These are hard working Australian men and women and we will be doing everything in our power to help them make informed decisions about their future.”

Holden says it has committed to local car manufacturing until 2022, while Toyota is negotiating for the next generation Camry it plans to build to 2024.

Ford is yet to apply for government assistance for a locally-made car beyond the 2016 deadline set for the Falcon sedan and Territory SUV.

This reporter is on Twitter: @JoshuaDowling