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Holden blames job losses on strong Australian dollar
by Staff Writers
Sydney (AFP) Feb 2, 2012

Auto maker Holden said Thursday it would cut around 100 jobs, blaming the strength of the Australian dollar, one week after fellow car giant Toyota sacked 350 workers.

Holden, an Australian subsidiary of US giant General Motors, said it would scale down production to a single shift at its Elizabeth plant in South Australia to "manage the impact of the high Australian dollar".

Managing director Mike Devereux said the changes would result in losses "around the order of 100 or so casual and flexible workers" from the company's workforce of around 5,000 people nationwide.

"At the current exchange rate we won't be able to realise further growth in our export programmes so the shift changes allow us to maintain production levels and do it more efficiently," Devereux said in a statement.

The Australian dollar has traded near or above parity with the greenback for more than 12 months and it is at a 40 percent premium to its long-term average, with Canberra seeing a strong currency as the new norm.

But the exchange rate has hit some local industries hard, particularly manufacturing, with steelmakers and now the auto sector shedding jobs in a bid to stay afloat.

Manufacturing Minister Kim Carr said Holden's job losses were a direct result of softer exports due to "the changes in the value of the Australian dollar."

"We are simply not exporting as many cars to the United States as we would have hoped to," Carr told reporters.

"We have to adjust to a much lower volume environment as a direct result of the changes that have occurred with the value of the Australian dollar."

Toyota Australia sacked 350 workers last week due to "unprecedented" pressure on its operations from the dollar and its impact on export markets, saying a slump during the financial crisis had failed to reverse.

The Japanese automaker's Australian chief Max Yasuda said he was working to slash Toyota Australia's break-even point by 25 percent within two years while doubling the output of local manufacturers to remain viable.

"We have to make ourselves more lean, more efficient and a more effective company," he told the Australian Financial Review.

Yasuda said government support for the industry through co-investment was an "ongoing need and a long-term need".

Canberra extended Holden a Aus$200 million (US$214 million) credit line in 2009 after parent company GM filed for bankruptcy, handing 60 percent of the firm over to Washington.

GM reclaimed its title as the world's biggest automaker last month, successfully emerging from its financial woes to overtake German giant Volkswagen and Japanese Toyota in the race to the top.

Australia's automakers have come under increasing strain, with last March's earthquake and tsunami in Japan seeing Toyota Australia scale back production by 20 percent and third major player Ford sack 240 workers.

The government pledged Aus$34 million to help prop up production at Ford's operations earlier this month, saying it was vital to maintain competition in the local market.

That followed a multi-billion-dollar lifeline to the nation's ailing auto industry at the height of the global financial crisis, after Ford cut 450 jobs.


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