HOLDEN MOVES TO PROTECT FUTURE IN AUSTRALIA
GM Holden Ltd will reduce its South Australian operations by 1400 positions by mid-2006 in
order to protect its future in Australia.
The company is responding to global business conditions, increasing competition from imported
brands and changes to local and export projections for coming years.
GM Holden has determined the third shift introduced in the Elizabeth vehicle manufacturing
operations in 2003 is no longer wholly sustainable.
Daily production will be gradually revised from its current level of 800 cars to about 620 cars,
equivalent to its 2003 rate prior to the introduction of the third shift.
GM Holden Chairman and Managing Director, Denny Mooney, today said the decision was
incredibly difficult but the right one to ensure GM Holden remained Australia’s biggest carmaker.
“We need to act because the local and export markets are changing and the third shift is no
longer wholly sustainable,” Mr Mooney said.
“We’re oversized for what we need in coming years and we have to protect our future in
Australia.
“We have to make changes but it’s very difficult because people and their families are involved.”
Employees in each shift were advised of the decision late last night and early today, and were
asked to consider voluntary separation packages. All employee entitlements were defined and
protected under the 2004 enterprise bargaining agreement.
Mr Mooney said the company would do everything it could to help employees and would seek to
work with the Federal and State Governments, unions, suppliers and other major SA firms.
He said many factors in the broader business environment and fiercely competitive automotive
environment had contributed to the decision to reduce local manufacturing operations.
“Changes in commodity prices, exchange rates, car market trends, import tariffs falling to 10 per
cent and local supplier collapses have all changed the way we need to operate,” he said.
“Commodity prices have risen substantially, particularly steel, oil and precious metals which
makes our cars more expensive to make.
“Our exports are facing severe challenges in coming years while the strong Australian dollar
makes it easier for importers and harder for exporters.
“The Aussie dollar has increased from below 50 US cents to almost 80 US cents since 2002. At
the same time, the dollar has strengthened against the yen, from less than 60 yen to more than
80 yen, and similarly against the Korean won.
“The Australian dollar is forecast to remain strong, which makes it more difficult to pursue new
export programs because of minimal or unfavorable return on investment.”
Mr Mooney said GM Holden operated one of the world’s most flexible manufacturing facilities,
but it now has too much capacity for its current production forecast.
He said the company had been working with employees for two years to reduce costs and
complexity in the plant.
“In Australia, more than 50 brands are available to buyers and only four made locally. Seven out
of 10 cars sold in this country are now imported,” he said.
“This is placing enormous pressure on Australian carmakers to be competitive on quality,
technology and price.”
Mr Mooney added GM Holden was one of Australia’s largest private sector investors, having
committed more than $1.8 billion to its operations in the past three years alone.
“GM Holden has invested a lot in Adelaide and will continue to do so provided we can make
changes to remain absolutely competitive,” he said.
GM Holden Executive Director – Manufacturing, Rod Keane, said voluntary separation packages
would be offered to employees across all three shifts at Elizabeth.
Mr Keane said the company would work with unions to determine other measures if targets were
not met.
“We will provide a range of benefits for employees choosing to leave, including access to
financial and outplacement support, as well as counselling if required,” he said.
Mr Keane said a significant proportion of the third shift would be wound down by December
2005, accounting for 1000 positions. The workforce would be reduced by a further 400 positions
by mid-2006.
“From a production sense, the 620 cars a day will be produced at a line rate of 76 seconds
which is roughly equivalent to the rate prior to third shift being introduced,” Mr Keane said.
“We have undertaken a broader review of the production flows to ensure we continue to deliver
the best possible product to the customer.”
GM Holden is Australia’s oldest automotive company, having grown from a saddlery business
established in Adelaide in 1856. It will next year celebrate its 150th anniversary as a company in
Australia.

 

Basically what this means is. With the elimination of the Monaro on the current architecture and with very lack luster sales (despite a jump this year) the shift used to make the GTO is no longer needed.

I saw it from the get go.

 

C'mon guys, lets start building these bad boys over here!

 

Fair trade if you give us those trucks!

 

Well.... if Monaro is ending, and only GTO is being built... that only makes sense, unless Pontiac planned on bringing over more GTO's now.

 

Oh don't get me wrong I have no problem with them being built in Australia, but I'm afraid Holden can't export a 100k a year production. (Maybe they can).

In Germany while I was there I met a guy from Bosch-Rexroth Aus. that owns a loaded Monaro. He also has one of the Ute's. Had nothing but good things to say and a cool guy IMO. Although, he could drink me under the table and did so on a couple of occasions, LOL.

In fact I would like to see GM produce the GTO's over here, and Import the Ute's as Pontiac. I think there's a big demand if they can keep the price reasonable. I'd buy one!

 

Personally, I wouldn't care where the cars are made... as long as they provide excitement and value. In fact, we should be getting a lot more cars from the US now that the FTA is in place... Camaro/GTO/Corvette is really the sort of product we lust after... we also need the GM trucks to give Toyota a real kick in the err, backside (unfortunately, Toyota dominate the market here... Holden's product lineup is a little bare when stacked up against Toyota).

C'mon GM, let's go global!

 

An oversimplified summary:

1. Australia's booming dollar has erased the windfall GM was getting off GTOs (and how they still made money even at low sales levels), and affects future plans to make & import cars from there.

2. Japanese, Korean, and Malaysian, and soon to be Chinese car makers are putting the squeeze on Australian's auto industry. 70% of cars sold there are imported!

3. GM will build many of the vehicles elsewhere that was planned to be made there.

 

I think the only way in the forseeable future for an Australian to get their hands on a GM truck, Camaro, GTO (although you guys have pretty much had these down there alot longer than we have), or Corvette, you are probably going to need to take a trip to the states.