Holden restructuring could be only weeks away

THE worry of preparing a restructuring plan involving another round of job cuts is costing GM Holden chairman and managing director Mark Reuss some sleepless nights.

Mr Reuss told a Melbourne seminar the new plan could be unveiled in a matter of weeks.

“Job losses, whether they’re voluntary or involuntary redundancies, are personal tragedies for those affected, and as a managing director, it’s a situation which keeps you awake at night,” Mr Reuss told a fleet industry seminar on Tuesday.

He said GMH was examining every part of its operations to see if they could be part of a sustainable company.

“In the short term, that means making tough decisions in the coming weeks and months,” he said.

“I wish we could carry the entire workforce through this period, but unfortunately these decisions will be necessary for our industry to overcome difficult times and be successful in future,” he told the Australasian Fleet Managers’ Association seminar.

Mr Reuss said the car industry was coping with extraordinary drops in sales around the world: 20 per cent in Australia and as much as 50 per cent in Europe and the US.

“This has become a consistent trend, reflecting the impact of broader economic conditions on the new vehicle market,” he said.

The company has already planned to take 10 “down days” at its Elizabeth, South Australia, assembly plant in April and speculation in union circles suggests that a further shift may be cut at the plant.

The 3400 employees at Elizabeth will receive 60 per cent of pay on the first five down days and 50 per cent on subsequent days when then plant is idle.

Mr Reuss applauded the federal government’s decision to allow a 30 per cent depreciation deduction on cars bought before June 30, on top of the usual 10 per cent depreciation allowed.

“We think this provides a strong incentive for businesses looking to update their fleet this financial year.”But he said the industry could not rely solely on short-term measures to get through the financial crisis.

“We need to lead from the front and use this situation as an opportunity to reinvent the industry from the core and position ourselves for a bright and sustainable future.

“We can’t sit and wait out this storm. 2009 has to be a year of transformation for our industry including Holden.

“We have to act now for our employees, for our suppliers, for our families, for the people that for generations have bought our cars.

“We have to do this for Australia.”