General Motors’ Australian unit Holden is to introduce a new single shift at its vehicle manufacturing plant in Elizabeth, South Australia and axe 100 temporary workers.
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The automaker said in a statement this would “improve productivity and manage the impact of the high Australian dollar”.
While most areas of vehicle operations will continue to operate on two shifts, Holden will introduce a single shift in general assembly which, it said, will maintain production volume, and reduce costs and production time per vehicle.
It will also move to a new 60-second production cycle by May which is capacity for 400 vehicles a day.
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By GlobalDataThe plant builds the domestic Commodore line which is exported mainly to New Zealand and, in left hand drive, to the Middle East.
“The new production schedule will also assist the line operators to better manage complexity and help improve build quality,” Holden said in a statement.
Chairman and managing director Mike Devereux said the general assembly change was critical to ensure Holden remained globally competitive.
“Holden has set a very clear business strategy to grow sustainably, lower its cost base and make a small car in Elizabeth to ensure we are profitable on domestic production,” he said.
“Our results show what a success this has been for the industry. In 2011 Holden made around 90,000 vehicles, up over 35% or 24,000 units compared to the previous year, with the growth driven largely by the Cruze hatch and sedan.”
Devereux said Holden would maintain current production volume with the single shift but the high dollar would limit further growth from exports in 2012.
“With these tough economic conditions it’s our obligation to our people, and those that invest with us, to build a sustainable business and to continuously improve productivity.
“At the current exchange rate we won’t be able to realise further growth in our export programmes so the shift changes allow us to maintain production levels and do it more efficiently.”
Devereux said the reconfiguration was designed to minimise impact on employees who had been advised of the changes being introduced.
“Holden currently draws on a small pool of fixed term contractors and casual labour to help manage peaks and troughs in production, and these will be gradually reduced over the next 12 months.
“No voluntary or forced redundancies for permanent Holden employees are expected as result of the shift changes,” he said in the statement.
However, Deveraux later told news agency AFP the changes would result in losses “around the order of 100 or so casual and flexible workers” from the company’s workforce of around 5,000 people nationwide.
GM-H could not be reached immediately for comment.
AFP noted that the Australian dollar had traded near or above parity with the US dollar for over a year and was currently at a 40% premium to its long-term average, with the federal government seeing a strong currency as the new norm.
The exchange rate has hit some local industries hard, particularly manufacturing, with steelmakers and now the auto sector shedding jobs in a bid to stay afloat, AFP added.
Manufacturing minister Kim Carr told AFP Holden’s job losses were a direct result of softer exports due to “the changes in the value of the Australian dollar.”
“We are simply not exporting as many cars to the United States as we would have hoped to,” Carr told reporters in an apparent reference to Holden’s recent return there with special LHD police cruiser versions of the Commodore line. Holden had earlier enjoyed US export business with versions of the Commodore rebadged as Pontiacs but this ended when GM killed off the brand as part of its Chapter 11 bankruptcy restructure in 2009.
“We have to adjust to a much lower volume environment as a direct result of the changes that have occurred with the value of the Australian dollar.”
Toyota Australia last week sacked 350 workers with local chief Max Yasuda blaming “severe operating conditions resulting in unsustainable financial returns due to factors including the strong Australian currency, reduced cost competitiveness and volume decline, especially in export markets”.
AFP said the government had pledged A$34m to help prop up production at Ford’s Falcon building operations in Victoria earlier this month, saying it was vital to maintain competition in the local market.
That followed a multi billion dollar lifeline to the nation’s ailing car industry at the height of the global financial crisis, after Ford cut 450 jobs.
