GM to Slash Jobs at its Holden Subsidiary

Europe is not the only market giving GM financial fits with its Opel and Vauxhall operations facing job cuts and plant closings. GM’s Holden subsidiary, an Australian entity with a manufacturing plant in Elizabeth, South Australia, and an engine plant in Port Melbourne, Victoria, are also facing cut backs with the company announcing on Monday the elimination of nearly 500 positions effective later this year.

Chevrolet SS from Holden.

The Chevrolet SS is an Australian import.

Holden in North America

Holden might otherwise be invisible to the North American consumer had GM not begun importing select vehicles and selling those as Pontiac models. The Holden Monaro was sold as the Pontiac GTO from 2004 to 2006, while the Holden Commodore was sold as the Pontiac G8 for the 2008 and 2009 model years. Later, after Pontiac was shut down, the Commodore was sold as the Chevrolet Caprice PPV.

Beginning this year an all-new VF Commodore will be sold in the United States as the Chevrolet SS. That model was introduced at the Daytona 500 NASCAR race this February. Canada consumers, however, will not get the Chevrolet SS.

Small Car Demand

Despite interest in its larger cars, Holden has found that demand for its volume Cruze small car has fallen. The company also blames a high Australian dollar and “one of the most open and competitive markets in the world,” for planned production cuts that are expected to be finalized by August. Those cuts will slow down car production from 400 units per day to 335, as part of its effort to realign Holden production with current and future demand.

As a result, some 400 jobs will be eliminated at the Elizabeth manufacturing plant and 100 jobs will disappear in Victoria. The company plans to offer Voluntary Separation Packages in a bid to reduce its workforce.

A Challenging Environment

On Monday, Mike Devereux, Chairman and Managing Director, General Motors Holden Ltd., explained that the company had been working aggressively these past 12 months “to address our challenges” by bringing new products to the market and by reducing prices. Said Devereux, “… to protect the long-term future of Holden we have been forced to take these actions and this restructure will better align Holden with projected future volume and workload.”

Devereaux also noted that the Australian automotive industry is heavily trade exposed as low tariffs and a high Australian dollar have made it difficult for Holden to compete against cheap imports. To remain competitive the company has slashed Holden Cruze prices by up to $2,500, but a sharp drop in sales during winter 2012 have not recovered.

The Future of Holden

GM is clearly concerned that its ability to compete in Australia has been diminished. Today, the Sydney Morning Herald reported the political sparring now taking place in Australia in light of approximately $2 billion given to Holden over the past decade. Another $215 million is also on the table, provided that GM follows through on a promised $1 billion investment to release a new Commodore in 2017.

The Australian automotive industry and related industries employ approximately 250,000 people and is considered “an integral part of the Australian economy.” Under the national government’s “new car plan,” Australia is investing $5.4 billion to support an industry that is clearly under siege. That investment, however, may not save Holden from the policies of central banks that are impacting the Australian dollar.

See AlsoGM Affirms Opel; Commits Billions to its German Subsidiary

Photo courtesy of General Motors Company.

Author: Matthew Keegan
Matt Keegan has maintained his love for cars ever since his father taught him kicking tires can be one way to uncover a problem with a vehicle’s suspension system. He since moved on to learn a few things about coefficient of drag, G-forces, toe-heel shifting, and how to work the crazy infotainment system in some random weekly driver. Matt is a member of the Washington Automotive Press Association and is a contributor to various print and online media sources.

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