We can’t help Ford workers, says Holden

HOLDEN has stopped short of extending a helping hand to production line workers at rival car-maker Ford should Commodore exports to the US ramp up sharply.

The car-maker’s managing director, Mike Devereux, said last week that it would look after its own staff rather than soak up any extra production capacity by using former Ford employees to fill the gaps in its workforce.

“We're pretty much focused on our employee base in South Australia for assembly,” Mr Devereux said shortly after a shock announcement from Ford last week saying it would wind up its car-making business in Australia from 2016.

“We have a pretty talented and dedicated team there and we want to be as efficient and effective in South Australia as we can be.”

Holden will start exporting versions of the Commodore passenger car, rebadged as a Chevrolet SS, to the US later this year. It is yet to announce a US-dollar price for the car.

The car-maker is keenly watching the exchange rate as the Australian dollar continues to fall off its recent highs, which according to Ford have made Australia one of the least viable places in the world to make vehicles.

The latest round of interest rate cuts, as well as falling prices for natural resources, today pushed the Australian dollar to a five-week low, fetching 96.28 cents in early trade.

Holden has not revealed what exchange rate was used to develop the Chevrolet SS program, but its Caprice Police Pursuit Vehicle export program – the long-wheelbase Commodore is marketed in the US as a police car – was based on a conversion factor of about 80 cents in the US dollar.

However, while a weakening Australian dollar means Holden could potentially sell more cars into the US, the car-maker’s executive director of engineering, Greg Tyus, told GoAuto that it would take about two months to take advantage of a more favourable exchange rate.

The limiting factor in any jump in production, though, would be the components makers that supply Holden with the parts needed for domestic and export models, he said.

“For us it is easy, we can do it in a couple of months,” Mr Tyus said.

“But it’s harder for the suppliers. They have several ways they can do it – start with overtime, weekend shifts, and then start a second shift – so they will need to work out how to do i.”

Trade Minister Craig Emerson told ABC’s Insiders program yesterday that Ford’s ongoing struggle with exports – it has never developed a left-hand-drive program for the Falcon large car or Territory SUV – was a “business program that didn’t really offer long-term prospects”.

“In Ford's case, they didn't have an export strategy Holden and Toyota do,” Mr Emerson said.

“That dollar has been retarding the success of the export strategy of Holden and Toyota. But Ford, I suppose, were working on a business model that didn't really offer long-term prospects and that’s a pity.”

Mr Emerson said the federal government would continue to help Australia’s car-makers.

“At an exchange rate of $1.03, obviously they’ve been under a lot of pressure,” he said.

“I think the exchange rate now is below 97 cents. If it goes lower that further boosts the competitiveness of those industries.”

Mr Tyus said a further challenge for Holden’s ability to step up the number of cars it made was the diversity of its production line.

“We make up to 45 different variants on the one production line,” he said. “A worker on our line can go from a Cruze hatch to a (Commodore) Sportwagon to a Chevrolet SS, and they have to know how to put each one together.

“If you look at a North American truck plant, they do one body style and maybe six variants.

“Here it is very, very complicated.”