Holden to lay off 18% of its workforce or about 500 of its employees

Article by Christian A., on April 9, 2013

The unexpected strength of the Australian dollar has made Holden, the Australian unit of General Motors, incapable of competing with foreign automakers. That’s why it has been forced to lay off 18% of its workforce, or about 500 of its employees. Holden chairman and managing director, Mike Devereux, said that the company is faced with a structural shift in the market.

He said that to cope with demand better, Holden will need to reduce the output of its Cruze model by nearly one-fifth to 335 cars each day. Devereux said that since the release of the Cruze model in 2009, its price had been slashed by A$2,500 ($2,600) so that it could be competitive against foreign automakers.

For over two years, the Australian dollar has traded above parity with the U.S. dollar. It has grown stronger against the Japanese yen, making Australian producers less able to compete with Japanese companies.

Because of declining sales and exports, jobs have been cut at GM Holden as well as at the Australian divisions of Toyota Motor Corp and Ford Motor Co. These automakers pointed the blame on the worldwide crisis and the strengthening Australian dollar.

On the other hand, automakers such as Mazda Motor Corp and Hyundai Corp benefited from a stronger dollar, helping to lower the import costs. Mazda and Hyundai posted higher sales for their fuel-efficient small cars and SUVs, allowing them to raise their market share. However, the Australian government has continued to provide subsidies to automakers and has been intent on sustaining the industry and guarding jobs.

In 2008, the Australian car plants of Mitsubishi Motors Corp were shut down. The Australian government has set aside A$5.4 billion in additional assistance for automakers until 2020. Last week, Holden said that in the last 12 years, it had gotten over A$2 billion from the Australian government.

Topics: holden

If you liked the article, share on:

Comments

Recommended

Polestar is notably known to be Volvo's internal performance specialists, and around last year Polestar revealed to the public that it will utilize electrification to further advance the power of...
by - June 26, 2017
Earlier this month, Porsche introduced to us the 911 Turbo S Exclusive Series. The car wore a Golden Yellow Metallic paint. The same time it was launched, the company said...
by - June 26, 2017
Last month, the Lamborghini Centenario made its way to the Transformers: The Last Knight premiere where it got the attention of many. Following that event, three Lamborghini Centenario coupes landed...
by - June 26, 2017
The Holy Trinity of hypercars may not be accessible anymore after being discontinued, but that doesn’t mean we won’t see any more hypercars in the future. What we know is...
by - June 26, 2017
Kia is taking things a step further with the new Kia Stinger, which they first introduced at the 2017 Detroit Auto Show. With the specs given to us by the...
by - June 25, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries