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GM Holden will move to a single shift, two crew operation with no retrenchments at its vehicle production plant in Elizabeth, South Australia.
The new shift pattern comes into effect on 4 May in response to global economic conditions and falling volumes across the sector.
GM Holden Chairman and Managing Director, Mark Reuss, said the change would enable the company to preserve jobs ahead of the introduction of Holden’s new small, fuel efficient four cylinder small car in 2010.
The new production level will be approximately 310 cars per day, aligning production with current forecast demand in both domestic and hard-hit export markets.
GM Holden will work with union representatives to negotiate employee rosters around the single shift with options to include one week on, one week off or two weeks on, two weeks off. Employees will still receive 50 per cent pay for days when they are not working.
“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,” Mr Reuss said.
GM Holden announced in December last year that it would begin producing a small, fuel efficient four cylinder vehicle at the Elizabeth plant in 2010.
Elizabeth is GM Holden’s only vehicle assembly plant, building 45 variants of the Commodore large car range for domestic and export markets.
Mr Reuss said today’s decision had been the only responsible course for Holden given exceptionally challenging market conditions, in Australia and overseas.
“We are acutely aware of the impact this change will have on our people and we will do everything we can to support them through this. This will include paying 50 per cent pay on down days and ensuring flexibility in our rostering to assist employees to plan their lives.”
Mr Reuss said that while the changes were intended to protect jobs there was no doubt the reduced hours would cause hardship for many employees.
“We’ll do everything we can to find the best solution for each Holden worker and we will work through our people’s circumstances on a case-by-case basis,” he said.
Today’s decision follows a number of other cost cutting measures at GM Holden including a pay cut for senior executives, pay freeze for white collar workers and the cancellation of bonuses and the scheduling of non-production days at vehicle and engine manufacturing facilities.
“These are unprecedented challenges and they require unprecedented decisions to protect Holden for the future. None of this is easy,” Mr Reuss said.
Mr Reuss said the decision was likely to have a beneficial effect across the supply chain, particularly for automotive suppliers, seeking greater certainty in production scheduling.
“Suppliers have been calling for greater certainty and clarity around production scheduling so they can align their efforts. This change will let them do that,” Mr Reuss said.
“We have been modifying our monthly production plans in a challenging environment since last year but this made it difficult for our suppliers to provide parts in a consistent manner and we weren’t able to provide a steady flow of vehicles to our customers.
“These changes preserve the integrity of the entire process of making cars from suppliers to dealers.”
Discussions are underway with the Federation of Automotive Products’ Manufacturers to coordinate production schedules between local manufacturers to further ease pressure on the supplier industry.
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