UPDATE AT 15:00: It is understood that the end of local Cruze production will see about 400 workers at Holden's South Australia plant lose their jobs by year's end.
Australian assembly of the Holden Cruze small car will cease in October 2016, the company announced today, about a year before the locally made Commodore follows suit.
It signals the death of the only small car assembled in Australia. Since March 2011, Holden’s plant in Elizabeth, South Australia, has made the sedan, while the locally designed hatch version commenced at the end of that year. The wagon has always been imported.
Over the past few years, Holden Cruze sales have been in decline at a faster rate than the small car segment, against newer and flashier rivals and alternative fleet options alike.
Sales went from 33,784 units in 2011 to 29,161 units in 2012, to 24,421 units in 2013, to 18,554 units in 2014 and 15,222 units in 2015. Essentially, Cruze sales more than halved over the course of five years, while sales in the small car segment as a whole dropped about 10 per cent.
The end of the locally made Cruze — the smallest volume-selling car made in Australia — will occur about 12 months before Holden shuts the doors on the Elizabeth plant, as well as its engine plant in Melbourne. Holden announced the planned closure of its local manufacturing divisions in December 2013.
The news means that the final year of operations at Elizabeth will be devoted to producing the Commodore, Ute and Caprice. After that, Holden will shift to being a full importer, alongside Ford (which closes its Melbourne plant this October) and Toyota (end of 2017).
Today’s announcement is the latest, and biggest, step in the gradual process of scaling down the number of staff at Elizabeth.
Holden has not said how many (if any) workers at Elizabeth will be retrenched as part of the early end of Cruze production, though reports indicate up to 400. At last count, there were 1260 workers at the plant, down from the 1600 working there when the closure plans were announced at the end of 2013. In August 2013, before the closure announcement, that number was closer to 2000.
The company points out that it has spent $25 million in South Australia so far to train workers into new skill sets.
According the Holden, the eventual end of Cruze production was first forecasted internally in 2014, and this has been openly discussed in weekly staff meetings and forums at the Elizabeth factory.
Importantly, says the brand, the end of the Australian-made Holden Cruze will not leave it without a presence in the small car segment, which remains Australia's most popular despite the continued boom in SUV sales.
The company will launch the new European Astra hatch range before the end of 2016, and will then launch the new Cruze sedan, likely imported from South Korea in early 2017. This means there will be a few-month gap between the death of one Cruze and the arrival of its direct replacement.
As we know, Holden will also retain a local engineering and design operation post-2017 here, as well as its Lang Lang proving ground.
Statement from Holden chairman and managing director, Mark Bernhard.
“I want to acknowledge first and foremost the impact the end of local manufacturing has on people, and their families, across the country and throughout the industry. Our people remain our number one priority.
"As I’ve said since the first day I took up this role last year, my most important job is to support our people and I want to reaffirm that commitment to helping them wherever we can.
"Our focus is to manage the gradual wind-down of manufacturing between now and the end of 2017 in a way that treats our employees with respect and dignity as they leave the company and gives them the best chance at gaining future employment.
"In the coming months, we will be helping many in our manufacturing workforce transition to new employment, wherever possible. Holden is committed to supporting staff through this transition process, and all our people have access to career counselling, training and job-search assistance.
"October will bring to an end five and half years of Cruze production that saw nearly 125,000 Cruze models built and sold in Australia. I want to thank our people for the part they have played in Holden’s history, they should be extremely proud of their contribution to our industry.
"At its peak, 33,000 Cruze vehicles were sold annually in the most hotly contested segment of one of the most competitive car markets in the world.
"The best way we can honour our people and our heritage is to build a bright and successful future for Holden and that’s exactly what we are doing. Through the launch of 24 new products by 2020, a laser-like focus on customer experience and a rejuvenation of the Holden brand we are taking our company forward.
"The cessation of Cruze manufacturing this year was always a key part of Holden’s plan to gradually wind down manufacturing and ensure our people and the supply base have the maximum amount of time possible to transition. There is absolutely no change to our plan to build Commodore until the end of 2017."