A
strike by 200 component workers forced General Motors’ subsidiary Holden to halt
production at the end of today’s afternoon shift, writes Mike Duffy in Adelaide.
The stoppage will cost Holden at least $A50 million ($US25 million) in lost
production but this figure could be just the start if Ford Australia, Mitsubishi
Motors and Toyota are also forced to cease assembly.
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Holden’s South Australian manufacturing plant, which daily produces 570
Commodores and Statesman for domestic and export markets, will remain idle until
Thursday at the earliest.
There are fears that the car maker will now not be in a position to re-start
assembly until next week.
Negotiations between Holden and its unions yesterday agreed to bring forward
two planned days off (PDO) to safeguard the wages of the 4,000-strong workforce.
If the strike is not settled by mid week, further PDOs will have to be re-scheduled
to avoid stand-downs.
Mitsubishi Motors and Ford Australia have announced that they can carry on
production until weekend. After that, they too would be forced to close their
assembly lines.
Toyota Australia is yet to announce its position.
Holden has advised just-in-time suppliers to stop production to avoid costly
inventory stockpiles.
Local steering components supplier Tristar is also at odds with its workforce
over an in-house enterprise bargaining agreement.
The 200 workers want holiday and long service leave entitlement, currently
held by the company, to be passed on to Manusafe, a manufacturing industry provident
fund set up to safeguard workers from companies going into liquidation.
The Industrial Relations Commission has ordered Tristar’s management and
representatives of the Australian Manufacturing Workers Union to appear before
it tomorrow (Tuesday).
Under the new Federal Workplace Relations Act, the IRC no longer has the power
to order striking workers to return to work pending negotiations.
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Holden was forced to ‘ration’ components between the day and the afternoon
shifts, allowing both to build just 150 cars each.
This means 270 vehicles were lost today and a total of 1,140 vehicles will
be lost on Tuesday and Wednesday – costing the company $A50 million in
turnover.
Should the stoppage force Holden’s sole car assembly plant to remain closed
until next week, the loss would more than double.
Ironically, Holden’s own in-house enterprise agreement has struck problems
and last week the AMWU issued a statutory 72 hours’ notice of industrial action.
The Holden enterprise agreement expires on August 15. The union would be in
breach of the Workplace Relations Act if it called workers out on strike before
that date.
However, once the current agreement expires, and now notice has been given,
the union can begin a campaign of random stoppages and overtime bans.
That could add to Holden’s difficulties.
When the Tristar dispute is resolved, Holden will be forced to schedule additional
weekend shifts – and pay expensive penalty payments – to try to recover
lost production.
Holden has set itself a tight production schedule to keep pace with increased
demand for its cars locally while satisfying ever-increasing export orders,
in particular from the Middle East which has taken a particular liking to the
5.7 litre V8-powered rear-drive cars from Down Under.
The company is looking to grow its annual production to 180,000 within the
next few years with half going overseas.
One of the big selling points Australian manufacturers use when negotiating
for export sales is the nation’s excellent industrial relations track record
– which currently is in jeopardy.
As elsewhere in the world, local car makers have been forced to embrace just-in-time
manufacturing procedures to avoid crippling inventory bills.
As car makers the world over have found to their cost, along with the associated
cost benefits comes increased exposure to disruption in supply of any components
necessary to build a car.
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