Holden has cut 500 jobs across Melbourne and South Australia citing poor market conditions.
The future of its remaining employees is also uncertain.
Mike Devereux, chairman and managing director at Holden, said in a statement that decreased demand in a competitive market and a high Australian dollar is to blame and that cutting jobs is the only option for it at this time.
“A workforce reduction is always the last resort and Holden has taken every possible step to address our challenges over the past 12 months, including market response days, aggressive marketing campaigns with significantly upgraded products and reduced pricing,” Devereux said.
Greg Evans, director of economics and industry policy at the Australian Chamber of Commerce and Industry, told LeadingCompany the issues Holden and the automotive parts manufacturers are facing come down to economic factors.
“All Australian manufacturing is being affected by an elevated dollar, and businesses should expect the dollar to remain in this position for some time,” he says.
“Strategies for businesses to combat this issue of a high dollar could include: making other areas of policy to reduce cost in Australia, have as low energy costs as possible, flexibility in the labour market, and reduced regulations put on businesses.”
Richard Reilly, chief executive of the Federation of Automotive Product Manufacturers, told LeadingCompany this morning automotive parts manufacturers would be directly affected by the job cuts at Holden.
“A reduction of 400 to 335 cars per day is huge, it will affect the sales and manufacture of automotive parts for sure,” Reilly says.
“We are hopeful that there can be a turnaround from the situation that the industry is in at the moment. I am hopeful that there will be a change in the near future, but it all depends on a variety of factors; value of the dollar versus overseas production and demand.”
But the marketing manager of four-wheel-drive manufacturer ARB, Matt Frost, told LeadingCompany he did not think the cuts would have an impact.
“I can’t see how Holden job cuts will affect ARB business at all, to be honest.”