Holden to close Aussie plants

Holden will close its Australian operations in 2017, with General Motors today announcing it will transition to a national sales company in Australia and New Zealand. “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, says Dan Akerson, chairman and chief executive officer of GM. “This includes 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.” As a result of the closure, about 2,900 positions will be impacted over the next four years. This will comprise 1,600 from the Elizabeth vehicle manufacturing plant and around 1,300 from Holden’s workforce in Victoria. Research released last month suggested that Holden’s closure would cost the South Australian economy NZ$1.32b and 13,200 jobs. The Australian Manufacturing Workers’ Union says Toyota is likely to follow suit, meaning the end of the automotive industry in the country. In that case, up to 50,000 jobs could be lost with second and third-tier suppliers also forced to close.

Car manufacturing – a sector in decline

The Australian car-making industry has been under pressure for at least 20 years. Soaring production costs and its high dollar have made it cheaper for most people to buy foreign-made cars. Analysts say 85 per cent of cars sold there are imported. Mitsubishi ceased local production five years ago, while Ford announced it would cease its production by October 2016. Extensive government subsidies have aimed to prevent this. Over the past decade, Ford and Holden have shared in more than NZ$13b in taxpayer-funded industry assistance. The government made a NZ$37m co-investment with Ford in 2012. The Federal Chamber of Automotive Industries says the sector directly employs more than 45,000 people across the country.