General Motors’ affiliate Holden has made a landmark decision to expand production at its sole Australian production facility to three shifts operation by mid-year, writes Mike Duffy.
The decision comes only days after Ford Australia announced it was asking 300 of its 5000 workers to take voluntary separation packages, due to falling sales of the Falcon, the only car it makes Down Under.
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The expansion at Holden is in direct contrast to the problems of over-production elsewhere in the world.
The move will create 1000 new jobs in the plant at Elizabeth, South Australia and throughout the network of component manufacturers in that state, Victoria and New South Wales.
It is yet to be determined whether Holden will need to hire additional workers at its engine plant in Melbourne which adds auxiliary equipment to V6 engines, imported from the United States.
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While Holden plans to expand production, Ford Australia is laying off workers |
The plant is currently over-staffed because of a downturn in demand for four cylinder engines from Daewoo of Korea.
Daewoo formerly accounted for 30 per cent of Holden’s four cylinder engine production.
The runaway success of the Commodore and Statesman in Australia and in export markets has pushed the Adelaide car assembly line close to maximum capacity.
Australia’s top car maker is rushing to complete a logistics study in the lead-up to around-the-clock assembly, scheduled to begin in August.
The move to three shifts at Elizabeth will require major investment to eliminate bottlenecks in the paint shop and plastics divisions.
New plant – including transfer presses to stamp large body panels and additional plastic injection moulding machines – will be installed in the coming weeks.
The new plant will be funded out of the $A400 million ($US204 million) investment program announced by Holden’s chairman and managing director, Peter Hanenberger, late last year.
The state secretary of the South Australian branch of the Australian Manufacturing Workers Union, John Camillo, said: “This is tremendous news for the automotive industry.
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Daewoo formerly accounted for 30 per cent of Holden’s four cylinder engine production |
“We estimate it will mean at least 400 new jobs at Elizabeth and more than 600 in the components sector.”
Holden’s executive director of manufacturing operations, Albert Lidauer, said today: “This is a very exciting time in the growth and development of our company.
“It is a huge task to switch to three shift operation.
“We have to re-balance the whole assembly line to re-distribute jobs and eliminate bottlenecks to ensure smooth operation.
“Training of assembly line workers is a huge task – a massive investment in itself.
“Yes, there will be additional jobs, but it will be two months before we know exactly how many additional workers.
“Several of our major suppliers are close to their own maximum production capacity.
“Some will need to add second or third shifts, others will meet our requirements by overtime working.
“So it follows that our expansion and extra jobs will lead to expansion and additional employment in the supplier industry.”
Holden announced near record profits of $A237 million ($US121 million) for calendar 2000 and already has established a handy lead over Toyota in the first two months of the year.
Hanenberger has previously announced that the company is aiming to boost Australian production to 180,000 vehicles – with 50,000 right and left hand drive Commodore and Statesman units for export markets.
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Holden’s Commodore is a Chevrolet Lumina in the Middle East |
Currently the Elizabeth facility is producing 570 vehicles per day.
This will grow to 630 units when the line goes to three shifts.
“The first step is to grow production to 146,000 units a year,” Lidauer said.
“Additional re-investment over and above the $A400 already committed will probably need to be made to take production to the next level of 180,000.”
He said Elizabeth would have to produce 780 vehicles a day to meet the annual production target of 180,000 vehicles.
Last year 133,151 vehicles were produced at Elizabeth – 4949 more than the previous year.
Almost 30,000 Chevrolet-badged Commodores and Statesman models were exported to the Middle East.
Over 2000 orders came from police fleets in Saudi Arabia, Bahrain, Qatar, Abu Dhabi and Dubai.
Holden is exploring further export opportunities in Latin America, South Africa and Asian countries.
Author Mike Duffy is the motoring editor of The Advertiser and the Sunday Mail, in Adelaide, South Australia.
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