General Motors’ Australian unit Holden on Friday said it would slash 1,400 jobs by mid-2006 as it struggles with falling sales of its flagship Commodore model and rising commodity prices, the Associated Press (AP) reported.
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AP said the company, which employs about 9,700 people in Australia, saw sales of its Commodore slump 6% to 41,673 in the year to the end of July.
Holden reportedly said in a statement the job cuts were intended to “protect its future in Australia. The company is responding to global business conditions, increasing competition from imported brands and changes to local and export projections for coming years,” it said.
Managing director Denny Mooney told the news agency that Holden will cut production from its current level of 800 cars a day to about 620 a day.
“We’re oversized for what we need in coming years and we have to protect our future in Australia,” he said.
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By GlobalDataAP said the cuts will involve Holden shutting down one of three daily shifts at its car assembly plant in the city of Adelaide in the state of South Australia.
“Commodity prices have risen substantially, particularly steel, oil and precious metals which makes our cars more expensive to make,” Mooney reportedly said.
The Associated Press noted that, sespite the fall in Commodore sales, Holden’s overall sales in Australia rose 1.8% to 104,278 in the year to the end of July.
Australian prime minister John Howard was reported to have said that his administration would soon announce a programme to help the laid-off workers find new jobs, and that the auto industry in Australia – dominated by local operations of Ford, General Motors and Toyota – remained strong.
Mitsubishi also has a manufacturing operation in Australia but the troubled automaker has recently scaled this back somewhat, ending local engine manufacture.
“In fact, motorcars sales in this country over the last five years have been the strongest on record,” Howard told Adelaide radio station 5AA, according to the Associated Press.
The news agency noted that Holden is Australia’s oldest auto business and was set up as a saddlery business in Adelaide in 1856.
Holden subsequently became a maker of car bodies for imported chassis and was bought by GM. The first Holden-brand car was launched in 1948 and the automaker grew to the point where, in the 1960s and early ‘70s it had three distinct model lines, assembly plants in most Australian states and exported its cars to around 150 countries, though in relatively low volume.
The company began to contract its manufacturing operations and model lines following the oil crises of the mid and late 1970s and a subsequent lowering of import tariffs – opening of the market to imported cars. A short-lived government policy intended to make the industry more efficient even forced it to share models with rival local manufacturer Toyota for some years.
Today Holden has just one Australian-manufactured car line – the large Commodore – built in the Adelaide plant. A separate operation makes GM’s Global V6 engine line for the Commodore and export to other GM units.
