Holden idles factory as GM loses $49 billion
BY MARTON PETTENDY | 2nd Mar 2009
The news comes after a week in which Holden chairman and managing director Mark Reuss refused to confirm or deny there would be more job cuts at the company, whose parent company General Motors (GM) last week reported a record annual operating loss for 2008.
Speaking at Friday’s Melbourne International Motor Show opening, where Holden revealed a version of the global small car it will manufacture in Australia from 2010, Mr Reuss confirmed his own salary had been reduced by an undisclosed amount as GM’s Australian subsidiary attempted to “reinvent itself from the core”.
Earlier this month GM announced its intention to reduce its global workforce by 47,000 jobs but is yet to reveal the impact of that plan on Holden. Union executives have called on Holden to reveal the full extent of its downsizing on its workers.
A Holden spokeswoman told Adelaide’s The Advertiser today (March 2) that the planned production shut-down, to begin on April 9 and extend over Easter, was in response to slow vehicle sales. Holden last week denied rumours it intended to axe an entire shift at Elizabeth to match falling demand.
As part of their contract with Holden, workers are paid 60 per cent of their wages for the first five shut-down days every year, after which 50 per cent of wages are paid, but factory staff can offset this by using leave payments.
Australian Manufacturing Workers Union (AMWU) South Australian secretary John Camillo told The Advertiser: “At this stage, there is 10 days in April, but they need to put all their cards on the table.
“I don't think they know what sort of restructuring they are looking at, so they will be looking at what that means.”Earlier today, Mr Camillo told ABC Online that Holden’s 3400 South Australian workers were anxious to know how Holden’s restructuring plans related to them.
“The only thing we know is there are rumours in regards to white collars to lose their jobs and so on and another shift to disappear out of (the) Elizabeth operation,” he said.
Holden’s newest production reduction plan follows the loss of 25 production days since late last year, when Holden announced it would manufacture a four-cylinder car line alongside the Commodore range at Elizabeth.
Mr Reuss would not be drawn on the prospect of further job cuts at the motor show, where Holden is tempting buyers with a five-year extended warranty for vehicles bought at the show.
“I can’t answer that right now because we’re really looking at how we reorganise the company, (from) the plant floor, to white-collar workers and to the way we design and engineer our vehicles.
“So we’re really looking at the whole thing and I can’t answer that right now.”He confirmed GM’s new global policy of cutting senior executive salaries had extended to him, but would not say if more white-collar salaries would be reduced.
“We haven’t announced anything on that yet but I can tell you that I’ve had a pay cut and, you know, it starts with me and that’s fine, so that’s where we are right now,” he said.
Mr Reuss said Holden’s small-car plan was part of a wholesale restructure currently underway in response to its parent company’s dire financial situation.
“I think that you’re seeing the response from Holden with the car that we introduced here today and I think you’ve also seen that we’ve worked on being a major viable part of GM here since I landed on the ground.
“The small-car strategy that we’re showing the beginning of today, that’s a large part of making us a big contributor to the parent company.
“(But) It would be crazy for us with the way the industry is going, because of the volume drops all over global markets, to not be reinventing the company from the core and that means every part of the car that we produce, the way we produce, the market offerings of the total vehicle – all those things have to be looked at in detail and every one of those (things) are being looked at and redone.
“So we’re reinventing ourselves on the fly, if you will. It would be crazy not to take the opportunity to restructure ourselves and reinvent ourselves here for the next 10 years, and we’re going to take the opportunity to do that.”GM revealed its preliminary financial results for 2008 and the fourth quarter of last year on February 26, when it reported a Q4 operating loss of $US9.6 billion ($A15.1b) and a calendar year loss of $US30.9 billion ($A48.8b).
GM said its net revenue was down $US31 billion ($A48.8b), from $180 billion ($A283.5b) in 2007 to $US149 billion ($A234.7) last year.
It said both its fourth-quarter and calendar year results were “affected by the dramatic deterioration in global economic and market conditions during the year, declining consumer confidence and a 50-year low in per-capita auto sales in the United States”.
According to GM, global industry sales were down five per cent or 3.6 million vehicles last year compared with 2007 levels, while US industry sales fell 18 per cent or nearly three million vehicles.
GM’s own global sales in 2008 were 8.35 million vehicles – down 11 per cent or 1.01 million vehicles on 2007. Last year 5.38 million vehicles, or 64 per cent of GM’s global sales, were sold outside the US – up from 59 per cent a year ago.
GM’s Asia Pacific (GMAP) and Latin America, Africa and Middle East (GMLAAM) regions both increased their sales volume by nearly three per cent, while more than two million vehicles were sold in Europe for the third consecutive year.
“2008 was an extremely difficult year for the US and global auto markets, especially the second half,” said GM chairman and CEO Rick Wagoner last week.
“These conditions created a very challenging environment for GM and other auto-makers, and led us to take further aggressive and difficult measures to restructure our business.
“We expect these challenging conditions will continue through 2009, and so we are accelerating our restructuring actions. At the same time, we are continuing our commitment to exciting, fuel-efficient cars and trucks, and the leadership in advanced propulsion technology,” said Mr Wagoner.
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