GM to close old Fishermens Bend engine plant

GM HOLDEN this afternoon announced that the long-running Family II engine will finally cease production at the end of 2009, when about five million units will have been produced.

After only a few months in the job, company chairman and managing director Mark Reuss announced the decision alongside manufacturing director Rod Keane, noting that the final decision was only taken at 8.00am today.

The plant closure will see 531 workers made redundant and, although Holden hopes to expand production at the V6 engine plant – which employs about 600 people and is not be affected by the decision – Mr Reuss could not say how many jobs this might save.

Mr Reuss said that demand for the outdated cast-iron engine had been dropping in recent years as its export customers in South Korea, China and Thailand switched to more modern, fuel-efficient alloy engines

He said that production had dwindled to about one-third from its peak of 1500 engines a day.

“Our export customers have advised us that with newer and more technologically advanced four-cylinder engines available within GM, they do not require production from GM Holden beyond the end of 2009,” said Mr Reuss.

“While that means we still have orders for the engine for the next 18 months, we had always promised to give our employees as much notice as we could once a decision had been made to end Family II production.

“Going forward, we will be focusing our business efforts on developing new domestic and export opportunities around our advanced Global V6 engine plant, particularly in the areas of alternative fuels and fuel-saving technologies.”

Mr Reuss announced that Holden is investing a further $40 million in the Global V6 plant to introduce new engine technology including a dedicated LPG version as well as ethanol and active fuel management “on the very near horizon”.

Federal industry minister Kim Carr issued a statement saying that the Rudd government is saddened by the news and will work with Holden and the unions to ensure that workers’ entitlements are paid in full.

The Family II engine has been built at Fishermens Bend since 1981 but has not been fitted to a locally-built model since 2000.

In total, 4.4 million engines have been exported around the world, earning billions of dollars for Australia, while only 400,000 have been used domestically.

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