Holden announces job cuts at Elizabeth

Holden has announced it will cut 600 workers from its Elizabeth (SA) vehicle manufacturing plant workforce. The cuts, almost 15 per cent of the plant's total workforce, were announced in a press conference at the plant this afternoon by Holden Executive Director Manufacturing Operations, Rod Keane.

Keane said the cuts were the result of improved efficiencies resulting from investment of $532m to modernise the facility. He said the move from mixed VZ/VE production to pure VE output would also reduce the workforce required from its current 4000-plus level to around 3450.

"Holden has invested over half a billion dollars at Elizabeth over the last few years. This massive upgrade has resulted in a very modern, very flexible but also very efficient facility," Keane told the media.

"If we're to remain one of the [GM] world's most competitive and flexible plants we need to be as efficient as possible. At this stage we have more resources than we need to achieve that.

"Producing VE only reduces complexity and our engineers have worked hard to make the VE-based Commodore product even more efficient to build -- again decreasing the need for the resource we have at the moment.

"It's true to say that much of the benefit of this investment has yet to be fully realised while we've been building a combination of VZ and VE models," he said.

In the first instance, voluntary redundancies will be offered to the workforce. The number of employees who take up this option should be clear before the end of March, Keane said.

Keane said the company had assessed its future production requirement in determining the final Elizabeth workforce numbers. He said that recent export announcements and "other export opportunities" would see the plant running at capacity -- around 145,000 cars per annum -- by the end of 2007.

He said that exports would make up to half of the Elizabeth plants production.

"Holden intends to retain a strong presence in South Australia and indeed Australia as the country's largest carmaker for many years to come. It's easy to assume a reduction in the workforce is a sign of bad times ahead but that's not the case here. This is a very different set of circumstances than those we faced when we ended the third shift in 2005," Keane opined.

Keane said latest local sales figures and the overseas interest in the Commodore and the rear-wheel-drive platform that underpins it means the carmaker remained upbeat. He refused to rule out further cuts, but suggested they were unlikely in the short term.

"You can't rule out anything in this business, but we have made this decision in the full context and understanding of the volumes [we expect] in the latter part of this year," he said.

Holden would not confirm when it would cease production of VZ variants at the plant. In its media statement, however, it said daily production would be reduced from its current level of 620 cars to approximately 520 cars in March. It would then ramp back to maximum capacity of 620 cars per day by October 2007.

Given the VE and WM variants are selling well, the output figures above seem to point to the cessation of VZ production sooner rather than later.

Holden employees were advised of the downsizing decision today. Holden said all employee entitlements were defined and protected under an existing enterprise bargaining agreement.

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