Holden safe from GM cutbacks

GENERAL Motors has announced it will axe around 15,000 jobs worldwide – or 15 per cent of its global salaried workforce, including 25 per cent of its senior executives – but Holden and its Australian-based design and engineering operations remain safe from the job cuts.

 

A Holden spokesman has told GoAuto that the latest cutbacks would not impact its Australian workforce of around 1250 employees. 

 

The company went through a restructure earlier this year in which 60 staff members, mainly from its Port Melbourne headquarters, were made redundant. 

 

In August, GM also threw a lifeline to its Australian R&D operations, announcing plans to recruit an extra 150 engineers to create a 500-strong local team – including designers – that will become a key unit of GM’s Advanced Vehicle Development division working on cutting-edge technologies such as autonomous and electric vehicles.

 

Holden says these plans remain in place, despite the wide-ranging decisions taken in Detroit that will now see its global product development operations further “compressed” and major cutbacks made at production facilities in North America and elsewhere. 

 

In a statement, Holden said: “While the vast majority of steps announced overnight apply directly to North American operations, GM Holden continues to support GM’s global business objective by implementing its strategy to operate a lean national sales company focused on strengthening the Holden brand and growing sales.

 

“These announcements are not related to Holden’s product portfolio which remains unchanged and is the best and most comprehensive in our history.

 

“Holden’s local engineering and design capability was further strengthened earlier this year with investments at the Lang Lang proving ground and in Advanced Vehicle Development.”

 

In addition to the employee reduction, GM is preparing to ‘unallocate’ three vehicle assembly plants in North America – one in Canada (Oshawa, Ontario) and two in the US (Detroit-Hamtramck, Michigan, and Lordstown, Ohio) – as well as two propulsion plants in Baltimore, Maryland, and Warren, Michigan.

 

The auto giant will also close two more plants outside North America by the end of 2019, while its assembly facility in Gunsan, South Korea, was shuttered in February this year.

 

The affected vehicles at the North American plants include the Cadillac XTS and CT6, Chevrolet Impala, Cruze and Volt and the Buick LaCrosse.

 

The Cadillac and Buick models will continue to be built in China, casting doubt over the future of the Chevy models, while there is no word yet on whether GM will maintain the affected North American facilities to produce different models. 

 

The workforce at these sites runs to about 6700 employees.

 

GM chief executive Mary Barra said the decision will put the US car-maker in a better position for the future.

 

“The actions we are taking today continue our transformation to be highly agile, resilient and profitable, while giving us the flexibility to invest in the future,” she said.

 

“We recognise the need to stay in front of changing market conditions and customer preferences to position our company for long-term success.

 

“These actions will increase the long-term profit and cash generation potential of the company and improve resilience through the cycle.”

 

By the end of 2020, GM is projecting a freed-up cashflow of $US6 billion ($A8.31 billion), along with $U4.5 billion ($A6.24 billion) in cost reductions and a $US1.5 billion ($A2.08 billion) lower capital expenditure.

 

Some of these funds will be redirected as “resources allocated to electric and autonomous vehicle programs will double in the next two years”, according to GM, while the company will also accelerate the development of next-generation battery technology.

 

Component sharing and expanded use of virtual tools will further reduce costs and lower development times respectively, with GM predicting that by the turn of the decade, 75 per cent of its global sales will derive from just five vehicle platforms.

 

GM’s announcement has been met with wide-ranging criticism, led by US president Donald Trump who told overseas reporters that the auto-maker should replace the slow-selling Cruze built at Lordstown with a more popular model.

 

“Their car (Chevrolet Cruze) is not selling well,” he said. “So they’ll put something else – I have no doubt that, in a not-too-distant future, they’ll put something else. They better put something else in.”

 

According to other reports, Mr Trump met with Ms Barra last weekend before GM’s announcement and said he was “very tough” on the decision to wind down five North American facilities.

 

“I spoke with her (Ms Barra) when I heard they were closing and I said, ‘You know, this country done a lot for General Motors’,” he said.

 

“You know, the United States saved General Motors, and for her to take that company out of Ohio is not good.”

 

United Automobile Workers vice-president Terry Ditties echoed Mr Trump’s sentiment, saying: “This callous decision by GM to reduce or cease operations in American plants, while opening or increasing production in Mexico and China plants for sales to American consumers, is, in its implementation, profoundly damaging to our American workforce.

 

“GM’s production decisions … puts profits before the working families of this country whose personal sacrifices stood with GM during those dark days. These decisions are a slap in the face to the memory and recall of that historical American made bailout,” he said.

 

Meanwhile, Canadian president Justin Trudeau expressed his “deep disappointment” of the decision via Twitter.

 

“GM workers have been part of the heart and soul of Oshawa for generations – and we’ll do everything we can to help the families affected by this news get back on their feet,” he said.

 

“Yesterday, I spoke with GM’s Mary Barra to express my deep disappointment in the closure.”

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