Holden Cruze to end production this year

GM HOLDEN will end Australian production of its Cruze small-car range in October, a year before the Commodore ceases production, as the car-maker pushes on with the wind-down of its local manufacturing operations.

The announcement by Holden was not unexpected, with the arrival later this year of the all-new European-built Astra hatch range, followed by the launch of the related Korean-built next-generation Cruze sedan.

Slowing sales and the impact on the company’s financial position are also potential factors in the decision to end production of the ageing small car.

The introduction later this year of stricter Euro 5 emissions regulations that impact the Euro 4 Cruze and its Commodore stablemate may have also played a part, although Holden was granted a short-term exemption from the latest regulations.

Holden confirmed that the wind-down of Cruze production would not impact the Commodore sedan and Sportwagon that will continue to be produced at the Elizabeth plant in South Australia until the end of 2017.

The car-maker said in a statement that the eventual cessation of Cruze production “has been openly discussed in weekly staff meetings and forums at the Elizabeth factory”.

A Holden spokesperson said the company could not confirm the number of staff impacted by the early exit of the Australian-built Cruze as it was in the process of “undertaking production studies and analysis to determine future production numbers”.

The spokesperson said that while some employees will leave Holden prior to the end of Cruze production, the majority would finish up on the last day the car rolls down the Elizabeth production line.

GM Holden managing director and chairman Mark Bernhard highlighted the company’s commitment to ensuring a smooth transition for its workers to other employment opportunities.

“I want to acknowledge first and foremost the impact the end of local manufacturing has on people, and their families, across the country and throughout the industry,” he said.

“Our people remain our number-one priority. As I’ve said since the first day I took up this role last year, my most important job is to support our people and I want to reaffirm that commitment to helping them wherever we can.

“Our focus is to manage the gradual wind-down of manufacturing between now and the end of 2017 in a way that treats our employees with respect and dignity as they leave the company and gives them the best chance at gaining future employment.

“In the coming months, we will be helping many in our manufacturing workforce transition to new employment, wherever possible. Holden is committed to supporting staff through this transition process, and all our people have access to career counselling, training and job-search assistance.”

Mr Bernhard said by the time production ends in October, close to 125,000 Cruzes will have been produced at Elizabeth over the past five-and-a-half years, with an annual sales peak of 33,000 examples of the small car in Australia.

He said the affected employees “should be extremely proud of their contribution to our industry” and highlighted the company’s commitment to bring 24 new models to market by 2020 and rejuvenate the brand as ways to “honour our people and our heritage”.

“The cessation of Cruze manufacturing this year was always a key part of Holden’s plan to gradually wind down manufacturing and ensure our people and the supply base have the maximum amount of time possible to transition,” he added.

Holden executive director of human resources Ashley Winnett reiterated Mr Bernhard’s commitment to ensuring a smooth transition for employees and detailed the company’s programs that are designed to assist staff in seeking to work.

“Our number-one priority is to support our people – this is a difficult time for all those in the Holden family,” he said.

“Every Holden worker has access to a suite of transition services and up to $3000 in approved training all part of Holden’s $15 million contribution to the federal government’s ‘growth fund’ for specific support of our manufacturing and engineering employees.

“All of our people have counselling services available to them, as well as career counselling, training and job-searching assistance. All Holden employees at Elizabeth are entitled to this transition support, both before and after they eventually leave the company.

“Holden is giving our employees and suppliers as much advance notice as possible, and we have openly been discussing this move with our people since 2014. The world-class ‘transition centre’ we have established at the Elizabeth plant is open to both our people and employees of supplier companies. We will do everything in our power to allow our people to make considered choices and help them move onto their next opportunity.”

The end of Cruze production in October falls the same month that Ford Australia will shut its manufacturing operations at Geelong and Campbellfield in Victoria, bringing Falcon sedan and utility and Territory SUV production to an end.

Holden started building the Cruze sedan in Australia in early 2011 after importing it from South Korea since mid-2009. An Australian-designed hatchback variant joined the line-up in late 2011, while the station wagon body style, launched in November 2012, has always been sourced from GM’s Korean plant.

After strong early sales, the Cruze has struggled to win over Australian buyers, with newer rivals such as the Toyota Corolla, Mazda3, Hyundai’s i30/Elantra and the Volkswagen Golf dominating the small-car segment.

The Cruze had its best sales in 2011 with 33,784 sales, dropping to 24,421 in 2013 and falling to 15,222 in 2015 despite a facelifted version arriving in January last year.

The announcement last Friday came the same day that Holden’s General Motors parent company confirmed it would not proceed with a proposal by the Punch Corporation to continue manufacturing at its Elizabeth plant using the underpinnings of the Commodore for a new model.