Home' InDaily : February 12th 2010 Contents Holden s Elizabeth plant has
shed almost 700 workers
on Hardship Recognition
Packages since moving to a "week
on, week off" single shift in May last
It follows a collapse in motor
vehicle production and exports
The extent of job losses surprised
Australian Manufacturing Workers
Union secretary John Camillo.
"The Hardship Recognition
Program packages had a much
higher take-up than expected," Mr
"Despite the stringent require-
ments for workers to provide at
least a doctor s certificate or state-
ment from a bank manager that
they were in emotional or financial
distress, the take-up was high.
"I was being approached by
workers in the street who said they
couldn t go on -- some were close to
losing their house."
Holden management would not
disclose the exact number of exit
packages that been taken up under
the scheme but it s believed the
workforce has dropped from 3200
last May to around 2500.
Holden s reduced output is the
key factor in South Australia s col-
lapse in export values with motor
vehicle exports dropping more than
80 per cent from $1.8 billion in 2008
to just $261 million in 2009.
Holden s executive director of
vehicle operations Dave Gibbons
said the loss of export contracts
in the US and Middle East moved
Holden to split its remaining
Elizabeth shift into two teams, each
working one week on and one week
off with total production halved.
"Two years ago, in 2008, close
to half of the cars we made at
Elizabeth were exported to markets
including the US, Canada, Middle
East, South Korea, New Zealand,
South Africa and Brazil," he said.
"But in 2009 Holden, like almost
every automotive manufacturer
in the world, was hit by the perfect
storm in the form of the GFC.
"Our exports virtually
evaporated overnight as markets
"We halved production in order to
match our manufacturing volume
to sales forecasts.
"At the same time, we have moved
from a business model where we
have a much leaner inventory of
manufactured vehicles (where we
are really making cars almost to
order) which has given us much
improved cash flow.
"In short, we moved early in
the GFC to ensure we didn t have
paddocks full of cars waiting to be
"This put us in a strong position
to ride out last year."
The plan aimed to keep all work-
ers employed, albeit on reduced pay,
a plan accepted by the union.
Holden management told The
Independent Weekly the move to a
two crew-single shift arrangement
was about preserving jobs -- work-
ers were entitled to full pay on the
weeks they worked and 50 per cent
pay on the weeks they did not work
"When it became obvious
that some of our workers were
experiencing hardship within
these arrangements, and after close
consultation with the unions, we
introduced a Hardship Recognition
Program," Mr Gibbons said.
"We didn t want employees to
leave under the HRP but assisting
those who wished to leave was the
right thing to do to recognise their
contribution to our business over
many years. "
Production is expected to remain
at historically low levels for the
first half of 2010 with the company
looking to two key developments
in the international car market to
prompt increased production.
Firstly, Holden remains buoyant
about its bids to build police cars for
the US using the Chevrolet Caprice
-- a long wheel-based version of the
But, after making its pitch of an
all-new Chevrolet Caprice Police
Patrol Vehicle (PPV) at the annual
International Association of Chiefs
of Police convention, in Denver,
Colorado last October, Holden is yet
to secure any contracts.
The total US market for law
enforcement vehicles is around
70,000 units per year.
Secondly, the company hopes
early consumer acceptance of the
four-cylinder Cruze continues to
build, creating demand for local
Those hopes seemed well based
with the announcement this week
of the top 10 finalists in the World
Car of the Year awards -- judged by
a panel of journalists drawn from
around the world.
Cruze made the list for the top
award. Cruze was the 6th best-
selling car in Australia in January
-- a huge encouragement for the
factory that the market wants this
car. Holden also plans to introduce
a hatch which isn t in the current
model line-up. Industry sources
said the company plans to return to
a second shift in the third quarter
of 2010 if it gets the go-ahead for
production of the four-cylinder
Cruze, but Holden s official line was
more conservative: "We don t have
an outlook on when we will return
to a two-shift operation.
"We are certainly doing extensive
planning around the introduction
of our localised Cruze in the first
quarter of next year and what that
means from a volume perspective,
but for the time being, we will
continue on a single shift.
"That said we had a strong end
to 2009 ...which is really encourag-
Mr Gibbons said the local
workforce had been loyal and
flexible and he hoped they would
reap the rewards
"Our workforce is currently
the right size for us to operate on
a single shift. When we are ready
to move back to two shifts, we will
likely need to bring in more employ-
ees -- and finding and training them
might be a real challenge -- but a
nice problem to have."
For the workers, it remains a
waiting game -- something their
former colleagues at Mitsubishi can
tell them about.
Photo: Kate Elmes
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