GM hacks headcount

Holden is not announcing job cuts in line with its parent, despite GM's firm commitment to reduce its global workforce by 10,000 staff. The corporation announced yesterday that it would carve back its global establishment from 73,000 staff to 63,000 this year. Roughly a third of the job cuts will come from GM's US workforce of 29,500 and, according to a report from Automotive News Europe, a further 3000 to 4000 jobs will be lost from within the ranks of GM's European subsidiaries.

The American government was aware of the need for staff retrenchments when GM submitted a plan to Congress in early December 2008, but this is the first time staff cuts have been made official. GM expects the majority of 'separations' to take place before May 1, 2009.

In its press release yesterday, GM also stated that employees would be asked to take pay reductions with effect from May 1. Executives are staring a pay-rate reduction of 10 per cent in the face and other employees will see their pay reduced by varying amounts between three and seven per cent.

In Australia, the situation remains up in the air. Holden has already initiated job cuts and idled the Elizabeth plant (more here), so there doesn't seem to be the immediate need to retrench more staff. Scott Whiffin, Holden's Media Relations Manager, advised the Carsales Network that the company is looking at various options to "maintain a business model that will make us strong and profitable long term".

When we pointed out industry speculation that further job cuts at Holden were "likely", but Holden's statements to date didn't necessarily support that, Whiffin agreed.

"All things are on the table," he said.

"We're looking at all aspects of the business, with a view to finding a company structure for the business on a sustainable basis, so we're not ruling anything in or out, but at this stage, no decision has been taken."

This contrasts with the international situation in which the decision HAS been taken and jobs definitely will go within coming months. It's not a matter of if, but when.

We put it to Whiffin that Holden was not in a position to shed staff -- and certainly not production staff with the new small car project coming on line from next year -- so what are some of the alternative cost-cutting tactics available to Holden to maintain the correct balance of profit and operational efficiency?

"With respect, you're probably getting just fractionally ahead," he said. "We're probably not keen at this stage to talk about all the different options that are on the table, other than to say that we're looking at all options.

"Which way we're likely to go, those decisions haven't been taken yet."