GM Holden, the Australian subsidiary of troubled car giant General Motors, has slashed its production output and labour costs in a bid to combat falling sales – but it has at least managed to avoid cutting jobs.
From 4 May, Holden will reduce production at its Elizabeth plant in Adelaide to a single shift, cutting Commodore production from 620 to 310 cars per day. That means workers will see their shifts halved and their pay cut.
“This is the best way to protect jobs in the current environment and keep Holden in the best possible shape leading into the opening of our second car line and an improvement in global market conditions,” Holden chairman and managing director Mark Reuss said.
He says the company has been working closely with employees, unions and governments on the plan, which will allow Holden to match supply to demand.
“In this situation you don’t want to overreact either way, you don’t want to do it too soon because of the situation that’s unfolding globally, and you don’t want to wait too late because people can’t survive with that uncertainty,” Reuss told employees in an email.
“We think this is the time where we have enough data now to see the permanency here of the global financial crisis that we are in, and the forseeable future, and to plan our business around that on a more stable basis.”
Holden’s flagship Commodore remains Australia’s best selling car, but local sales have almost halved over the last decade as a result of rising fuel prices and changing consumer tastes.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
