Holden cuts workforce after GM cancels programs

GM HOLDEN is shedding an unspecified number of contract design and engineering positions following parent General Motors’ decision to abandon work based on the Australian-developed global rear-wheel drive architecture.

After another tumultuous week for Australian vehicle manufacturing, during which 240 fresh job cuts across three automotive component suppliers and Kenworth Trucks were announced – less than a week after Ford declared that 350 jobs would be slashed at its Geelong and Broadmeadows plants – GM Holden has revealed to GoAuto that contract positions were being terminated on an ongoing basis until it reached the “appropriate level to meet the revised workload”.

The cutbacks commenced some weeks ago.

“There’s been a number of global programs either cancelled or put on hold,” said GM Holden spokesman John Lindsay.

“Because we do global work through our global design and engineering (operations), essentially what we’ve been doing is reducing our workforce to the appropriate level to meet the revised workload.

“What we’ve been doing is approaching our contracted staff, and those who aren’t required we’ve been letting them go. So that’s an ongoing process at the moment.”

Mr Lindsay refused to divulge the exact number of positions being cut but confirmed that no permanent positions had been affected. He said the contract terminations would continue “until we’ve got the right balance and mix of skills that match the workload that we have”.

GoAuto sources have indicated that the staff cuts are extensive and have had a dramatic impact on operations.

“We haven’t been giving out any numbers on this because basically it’s ongoing,” Mr Lindsay said. “But essentially we scaled up to match the projects we were getting from global (head office) to cope with that – and we did that with contract staff, which is why we do have contract staff – but now with those reductions, we’re scaling down appropriately.

“It’s something we’ve done before – and part of our normal business practice … I wouldn’t want to put a specific time (frame) on it, but it’s something that we’re working through at the moment.

“We have to make sure that we have the right skills mix. There will be some contractors that have the skills that we still require, even with the reduction in the current workload. So we’re working through that,” he said.

The rear-wheel drive centre of excellence for the GM world, Holden was known to have been in the running to develop the replacement for the Buick Lucerne sold in North America, while GM was also understood to have considered building the next-generation Chevrolet Impala on the Holden-developed RWD architecture.

Mr Lindsay refused to comment on the global programs that have been canned and/or shelved. However, overseas reports have suggested that stringent fuel consumption standards in the United States have forced GM to abandon plans to create both the Lucerne and Impala using Australian-sourced design and engineering.

Furthermore, US industry journal Automotive News this week reported that design work for a number of GM brands outside North America was being transferred to Detroit in response to US vehicle programs being delayed or cancelled, which in turn has freed up US designers for other projects.

It cited the Impala and “an unnamed Buick sedan” as examples, and quoted GM design vice-president Ed Welburn, who said: “We have had a couple (of) studios where some projects have been cancelled. We have other studios that are totally overloaded. We just need to level that work around the globe.”

Studios believed to be swamped with design work are those working on GM’s new-generation small cars, in particular the Opel R&D centre in Germany and GM Daewoo Auto & Technology in South Korea.

“They can’t handle it all,” Mr Welburn said. “So some of that work will be done in North America.”

GM spokesperson Mike Albano was also quoted as saying that GM’s design centre in Warren, Michigan, was expected to eventually handle work for two vehicle architectures. He declined to identify those platforms, but said: “We have some work being shifted in process for small, subcompact (vehicles), that kind of category. I certainly could foresee more car programs coming into Warren as the market changes.” Mr Lindsay insisted that design work at Holden was not being channelled into an overseas studio.

“The projects that have impacted us are ones that have either been cancelled or delayed – they were not projects being moved from here to elsewhere,” he said.

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