AUSTRALIA: Union accuses government of 'economic vandalism' as Holden axes manufacturing

By Simon Warburton | 11 December 2013

Australian unions have slammed as "devastating" plans by Holden to end vehicle and engine manufacturing in the country by 2017, accusing the government of "economic and social vandalism."

Nearly 3,000 jobs will be lost as Holden transforms itself to a national sales company in Australia and New Zealand selling imported vehicles, although the Australian Manufacturers Workers' Union (AMWU) is predicting this could go far higher.

"We are absolutely devastated by the announcement today, this is a catastrophe for tens of thousands of families," said AMWU national secretary, Paul Bastian. "This did not have to happen. We knew heading into the election the coalition had plans to remove co-investment, but the entire industry hoped they would see sense and the impact of their decision.

"The government has failed to come to its senses. We're looking at as many as 50,000 people who are directly employed in the car industry in Australia. This will punch a A$21bn (US$19.2bn) hole in the economy."

News of Holden's decision to end manufacturing came only hours after parent, General Motors, announced the appointment of Mary Barra as new CEO to replace Dan Akerson, but the current incumbent nonetheless issued a statement highlighting the "perfect storm" Australia was currently facing.

"The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world," said Akerson.

The move will cut 2,900 jobs during the next four years - 1,600 at the Elizabeth, South Australia, Commodore and Cruze vehicle manufacturing plant and around 1,300 at engineering and engine operations in Victoria.

"This is economic and social vandalism from the Abbott government that has led to this decision by Holden," added Bastian.