Carr applauds Holden’s careful approach

GM HOLDEN'S decision to cut production to one shift a day while trying to preserve its workforce has drawn praise from the federal government.

However, federal industry minister Kim Carr has warned more cuts may be coming, both inside Holden and in the parts sector.

Asked if Holden jobs were safe in Victoria, where the company makes engines and has its design and engineering centre, Senator Carr said: “Well, there is a clear question across the company at the moment.”

But he denied there were immediate plans to extend the shift-cutting to Victoria.

Holden chairman and managing director Mark Reuss has been looking at all parts of the company in a bid to make it viable without threatening its long-term health.

Under the new production roster, Holden will cut output at its Elizabeth factory in South Australia by half, to 310 cars a day, but will retain its workforce of 3150 by job sharing, working them one week off or one fortnight on, one fortnight off.

Workers will be paid 50 per cent of their normal wage when they are not working.

“Holden is dealing with very difficult circumstances, and the government commends the joint efforts of its workers, unions and management,” said Mr Carr.

“A very difficult decision has been taken in very difficult circumstances.”

Left: Federal industry minister Kim Carr.

Mr Carr said he was pleased the company had managed to reduce production to 310 cars a day without retrenchments.

Mr Reuss said the company had been reluctant to retrench workers because it needed to retain their skills and expertise until Holden introduces its second car line, a four-cylinder model based on GM’s Delta II platform, in the third quarter of 2011.

Senator Carr said the Holden cuts would hurt the parts industry.

“There are serious problems in regard to liquidity for a number of firms. There are serious issues in far as workers' concerns with job security,” he said.

“We've got to work with both unions and with the companies to ensure that the industry is able to emerge stronger as a result of these changes.”

Elsewhere in the assembly sector, Toyota has trimmed a further five per cent out of its production schedule, while Ford Australia is currently sticking to the production settings it adopted late last year.

Toyota has eased from 420 cars a day in March to 400 cars a day now, but has not increased the 17 non-production days that have been scheduled for the period from March to August.

Ford sees no reason to adjust output further, said spokeswoman Sinead McAlary.

Although Falcon sales fell below 2000 in March and ute sales fell more than 15 per cent from February levels, she said Ford was happy with its current inventory position.

“We are actually managing stock very well at present. We are happy with that, our inventory and dealer stock levels are really good,” she said.

“The whole market dipped down in March, so everyone was down similar numbers. Unfortunately our vehicle bore the brunt of that as well.

“We have plans to market Falcon quite aggressively through the rest of this year.

This will be based around the newly improved fuel consumption and emissions standards announced for the Falcon last week. Ford claims this means a Falcon XT is as cheap to drive as a four-cylinder medium car.

“We think that will give us a lot of leverage, and an advantage over some of our direct competitors. And we managed to do that without reducing our performance, as well,” she said in reference to the Holden Commodore base 175kW V6.

The base Falcon XT model now consumes 9.5L/100km when fitted with the six-speed ZF gearbox instead of the five-speed (10.5L/100km).

The de-powered Commodore Omega and Berlina both return consumption of 10.6L/100km with a four-speed auto. The 195kW V6 mated with a five-speed auto in the SV6 returns 11.2L/100km.

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