Holden optimises Elizabeth shifts

Production at Holden's Elizabeth plant is set to remain around 90,000 units this year, not the 100,000+ units the company had forecast, MD Mike Devereux told the press this morning. As a consequence, the company is revisiting the structure of its workforce at the plant.

"We are making shift changes to improve productivity," Devereux said. "I would say it's mostly to respond to the Australian dollar. We had a plan throughout last year to continue to increase our capacity to take advantage of not just our police car program, but what we hoped would be increasing exports to my old stomping ground in the Middle East.

"So in 2010 we made about 66,000 cars; we made just over 90,000 cars last year — and we were actually hoping to make more than 100,000 cars this year. But frankly, with the dollar at [US]$1.07... we're not seeing the kind of export growth that we were anticipating."

The revised forecast has resulted in optimisation of the facility's workforce, with the afternoon shift now to be integrated with the day shift. These changes will improve productivity, Devereux advised, with production time for each vehicle coming down from 104 seconds to 60 seconds. It will come at no cost to Holden's permanent and full-time workers, although temporaries, casuals and contract labour will be reduced through natural attrition. So only 100 workers will be affected, out of the roughly 2400 staff at the plant. Devereux says that some of the extra 100 staff employed on this basis have already left the company's employ anyway.

The 35 per cent increase in production from 2010 to 2011 was driven mostly by the introduction of the locally-manufactured Cruze small car. That has served to "de-risk" the plant's viability, to use Devereux's expression. The Holden boss reiterated a comment he has made in the past, that profitable exports from the factory were "icing on the cake", rather than a staple for a sustainable business case.

That said, Devereux anticipates the company can still sell between 3500 and 4000 units of the Caprice to Middle East markets this year, although he admits that it's getting tougher with the car's retail price in those markets rising in line with the strength of the Aussie dollar. And it's a similar situation with the Police Caprice, the Caprice PPV.

"The Police Car Program is very much alive," he told the media. GM in the US is finding customers for the car — and because it's a US/Chevy commercial program, Devereux didn't want to step on the toes of his Chevrolet counterpart by revealing the numbers sold to date — but the cars sell to law enforcement fleets against competitors from Ford and Dodge, both determined rivals with lower-cost products to offer.

Devereux won't budge on the price or the cost of the Caprice however. He told the press that GM did that a few years ago — and wound up in a world of trouble for a while.

"We're in the business to make money," he succinctly said.

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