GM Holden Looks for Solutions to Save Plants in Australia image

Holden and the labor unions in Australia will begin negotiations to find solutions to cut costs and keep open the company’s plants in the region.

“Every single option is on the table,” Mike Devereux, Holden managing director said in response to a question on possible wage cuts. “Our employees will be presented with a very difficult decision, I know that, but it’s also one that I believe can help save the industry of making automobiles in this country.”

GM’s Holden unit said that it will have to cut around 400 jobs in Australia due to the strong local dollar and the devaluation in competing markets to make its local facilities become the world’s most expensive. Devrereux added that it costs with A$3,750 ($3,570) more to manufacture a vehicle in Australia compared with GM plants in other markets.

“If you want to build anything in this country, you do face significant cost penalties,” he told reporters. “The goal is to make labor-related cost savings.”

The 13% increase of the Australian dollar against the yen in the pats year, cut exports and increased sales of cheaper imported vehicles. The one to benefit the most from this change is the Japanese automaker Toyota, which is the largest manufacturer in Australia.

Source: Bloomberg