Holden future at risk as workers say no to wage cuts

The manufacturing future of Holden is hanging in the balance after unions warned workers would not take a pay cut. Holden announced two months ago it will shut its Elizabeth car making facility unless it can reduce its manufacturing costs.

Giving a rare insight into the sensitive negotiations Australian Manufacturing Workers Union SA secretary John Camillo said about "85 per cent" of workers would vote against a pay cut.

Camillo told News Corp this morning workers had helped Holden to find $9 million in savings but was short of the target of $15 million set by the car maker.

"The way it is at the moment, our workers would vote no," said Mr Camillo. "Our workers are indicating they are not going to accept pay cuts and some of the other conditions Holden is trying to impose on us."

Mr Camillo said Holden was trying to cap future voluntary redundancy payouts to 52 weeks. "That means anyone who has worked for longer than 12 years gets a raw deal. And Holden has a lot of long term staff."

The workers had agreed to give up a 3 per cent pay rise due in November but would not accept wage freezes for a further four years, Mr Camillo said. Holden is conducting detailed negotiations daily with unions and workers until the August 9 deadline, Mr Camillo said.

"We are still in discussions and are looking at other parts of business to see where other savings might be made, but the wage cuts and the capped VSPs (voluntary separation programs) are a bridge too far. Our workers will not accept those conditions."

News Corp understands there are more than 40 points of negotiation, including flexible work hours, and other efficiencies that would cut costs. Holden would not comment on the negotiations. A spokesman said it is keeping the details of the negotiations private.

Holden is trying to find cost savings and ask the federal government for more than the $275 million already allocated in order to continue building cars in Australia beyond 2016. It says economic conditions had changed dramatically since the deal was signed last year.

If Holden goes, Toyota Australia is likely to follow because it would not have the economies of scale in the supplier sector to remain viable. But Toyota publicly says it has no plans to leave and "is committed to building cars in Australia".

This reporter is on Twitter: @JoshuaDowling