Holden has announced the closure of its Australian manufacturing operations.
Workers and politicians have been advised by the company of its intentions today.
In a statement from Detroit released this afternoon, General Motors said it would “discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017”.
“We are completely dedicated to strengthening our global operations while meeting the needs of our customers,” said GM Chairman and CEO Dan Akerson.
“The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”
The company said that about 2,900 positions “will be impacted” over the next four years.
“This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and approximately 1,300 from Holden’s Victorian workforce.”
GM said Holden would continue to have a significant presence in Australia beyond 2017 as a national sales company, a national parts distribution centre and a global design studio.
GM Holden Chairman and Managing Director Mike Devereux said workers would be an important priority over the next four years.
“This has been a difficult decision given Holden’s long and proud history of building vehicles in Australia,” said Devereux. “We are dedicated to working with our teams, unions and the local communities, along with the federal and state governments, to support our people.”
The company said the “sale and service of Holden vehicles will be unaffected by this announcement and will continue through the extensive network of Holden dealers across Australia and New Zealand. Warranty terms and spare parts availability will remain unchanged”.
“GM remains committed to the automotive industry in Australia and New Zealand. We recognize the need for change and understand the government’s point of view. Moving forward, our business model will change significantly however, GM Holden will remain an integral part of its communities and an important employer both directly and through our dealers,” Devereux said.
The company blamed the strength of the Australian dollar for an increase in costs.
“Since 2001, the Australian dollar has risen from US$0.50 to as high as US$1.10 and from as low as 47 to as high as 79 on the Trade Weighted Index. The Australian automotive industry is heavily trade exposed. The appreciation of the currency alone means that at the Australian dollar’s peak, making things in Australia was 65 percent more expensive compared to just a decade earlier.”
Read the full GM statement here.
An Australian Manufacturing Workers Union spokesman says Holden’s withdrawal will be devastating and lead to 50,000 job losses and a $21 billion hole punched in the economy.
Devereux told a press conference this afternoon that was being honest at a Productivity Commission hearing on Tuesday at which he said no decision on Holden’s future had been made.
“General Motors made the decision to exit manufacturing in Australia a number of hours after my appearance at the productivity commission,” he said.
“I received the final decision from General Motors yesterday afternoon.”
While Devereux said Holden will continue to be major employer in Australia from 2018, there will be significant job losses.
“The end of manufacturing will mean the loss of approximately 2900 jobs here at Holden,” he said at a press conference at Holden’s Elizabeth plant in South Australia.
Devereux said Holden had tried to keep manufacturing in Australia.
“Make no mistake, we have looked at every possible option to build our next generation cars here in this country,” he said.
He said he felt for the workers at the Elizabeth facility.
“This is an emotional thing for people and I can’t begin to say I understand how people walking out of this plant feel today.”
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