Holden 're-sizes' and cuts 1400 jobs

Mr Mooney announced the cuts at a press conference at the Elizabeth plant on Friday. He said the company was responding to global conditions - including over-production and consequent over-supply -- increasing competition from imported brands and coming changes to Holden's local and export projections.

He also cited rising commodity prices - including steel, oil and precious metals - reduced import tariffs, the strength of the Australian dollar and local supplier collapses as contributing to the "re-size".

"Some of the local supplier collapses have had very significant implications on our operations," he said.

"Our exports are facing really severe challenges while the Australian dollar stays strong. Quite honestly, that makes it easier for the importers and a lot tougher for the local manufacturers.

Effectively, 1000 of the job cuts equate to the number of workers employed when Holden introduced a third shift at the Elizabeth plant in 2003 to meet then market demand.

According to Holden's Executive Director, Manufacturing Operations, Rod Keane, the third shift at Elizabeth would be cut, and the car-maker expected sales to fall from last year's 165,000 vehicles to 160,000 this year.

Mr Mooney said the company expected 400 more cuts would come from "pent-up demand" at the plant for redundancies.

Efforts would be made to place as many as possible of those workers in supplier jobs which would be created when Holden launched "new product" mid next year. In other words, the VE Commodore - the launch of which he described as the biggest "since 1948".

Mr Mooney said the Australian market had grown to be one of the most competitive in the world, with more than 50 brands represented here.

"If you look at where we are right now, our costs are too high and the competition, frankly, is too fierce, and we've got to revise our production plan accordingly."

He said the strong dollar gave importers of Asian cars "a significant advantage".

"The Australian dollar is forecast to remain strong," he said, "which makes it more difficult to pursue new export programs because of minimal or unfavourable return on investment."

Both Federal and State Governments had been advised of the job cuts, Mr Mooney said.

The move shouldn't signal alarm bells for Holden's future in Australia, Mr Mooney said. 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. He said the car-maker was "absolutely committed" to staying on in Australia.

Mr Mooney said Holden had been forced to make, "Difficult decisions we believe will protect us for the future. Still a major player, major employer and highest volume car-maker in Australia. We believe this decision is consistent with where we want to be long-term."