Holden has confirmed it will cut casual and contracted staff as well as adjusting the production cycle at its Elizabeth plant in Adelaide to counter “tough economic conditions”.
Unions have told media they expect about 140 casual labour and fixed-term contract employees to be axed as Holden introduces “a new shift pattern” it says will improve production efficiency that has been affected by the high Australian dollar.
As CarAdvice reported yesterday, Holden’s Elizabeth plant – which produces the Commodore large car and Cruze small car – will switch its General Assembly operations from two shifts to a single shift with an expectation of retaining all permanent Holden employees.
Holden says a new 60-second production cycle to be introduced by May will reduce costs and production time per vehicle while maintaining a similar annual vehicle output to 2011 of 90,000 despite daily production falling from about 450 to 400 cars.
GM Holden boss Mike Devereux says the move was “critical” as the company responded to reduced export demand and the impact of the Australian dollar.
“Holden has set a very clear business strategy to grow sustainably, lower its cost base and make a small car in Elizabeth to ensure we are profitable on domestic production,” said Devereux.
“With these tough economic conditions it’s our obligation to our people, and those htat invest with us, to build a sustainable business and to continuously improve productivity.
“Holden currently draws on a small pool of fixed-term contractors and casual labour to help manage peaks and troughs in production, and these will be gradually reduced over the next 12 months.”
The Federal and South Australian Governments are currently negotiating with Holden’s parent company, General Motors, for further co-investment measures to secure the future of the Elizabeth, Adelaide, plant until at least the end of the decade.
The announcement is another blow to the local car industry and Toyota recently axed 350 employees at its Altona plant in Victoria where it builds the Camry and related Aurion.