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NEWS
Holden sheds jobs in SA, Victoria
'Trade-exposed' Cruze leaves GM brand vulnerable to sharp pricing activities from rivalsHolden MD Mike Devereux has today announced the loss of 400 jobs in South Australia and 100 more in Victoria.
The Holden boss said that the recent drop in domestic sales volumes for the Cruze reflected the high strength of the Australian dollar, which has left the locally-manufactured car effectively uncompetitive against market rivals in the hotly contested small car segment. Describing the Cruze as a "trade-exposed vehicle", Devereux explained that the situation has developed over the past "three to five months", with a direct impact on the viability of the production line at Elizabeth.
That three to five month period relates to the Japanese government's initiative to devalue the Yen, something Devereux mentioned in his opening remarks to the press this afternoon without naming Japan explicitly, although he was clearly angered by the "vicious price competition" in the local market, on the one hand, and "active participation of central banks in other countries to weaken their own currency and protect their own automotive industry" on the other.
As a consequence, the manufacturer is reducing the number of cars built per day from 400 to 335, effective from August 1 this year. Holden is asking the production workers at Elizabeth to take "voluntary separation". Other workers being offered voluntary redundancy packages include 100 in Victoria, comprising some staff from Preproduction Operations at Fishermans Bend and Validation staff at the Lang Lang proving ground.
Curiously, even though the VE Commodore is in run-out ahead of the launch of the new VF model, it's still selling ahead of Holden's forecast for it. In fact, Devereux expressed the wish he had more V8 models to sell currently. And the Commodore (and Caprice long-wheelbase variant) remains the backbone of a small but important export program that is selling in numbers the Holden exec described as "niche exports". The Caprice PPV police interceptor sold between 3000 and 4000 units in North America last year, despite the business model for that car originally being established when the Australian dollar was worth 88 cents US, rather than the US 1.05 it is today. Similarly, exports to the Middle East are hovering between 5000 and 6000 units per annum. Holden anticipates that VF exports – as the Chevy SS from Q3 or Q4 of this year – will bolster production numbers too.
Devereux is "optimistic" about the VF Commodore's prospects for success and believes that as word of mouth concerning the comprehensively revised 14MY Cruze begins to percolate through the market, sales of the small car should pick up as well.
"People don't realise what changes we've made," Devereux told the motoring media this afternoon, but he acknowledged that the company has "to plan for what we see right now."
In a press release issued earlier in the day, the Holden MD declared that making things in Australia had become 60 per cent more expensive over the last 10 years – and the currency is stronger than at any previous time during the previous 30 years.
The restructure should result in annual production numbers of around 74,000 or 75,000 units.
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Written byKen Gratton
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