General Motors may finally be free of US Government ownership and the company is in a decent financial stead, but that doesn’t mean it isn’t still tightening its purse strings. The firm today announced it would transition to a national sales company in Australia and New Zealand and discontinue vehicle and engine manufacturing and significantly reduce its engineering operations in Australia by the end of 2017.
Roughly 2 900 jobs will be lost. This will comprise 1 600 from the Elizabeth vehicle manufacturing plant and approximately 1 300 from Holden’s Victorian workforce.
“We are completely dedicated to strengthening our global operations while meeting the needs of our customers,” said GM chairman and CEO Dan Akerson. “The decision to end manufacturing in Australia reflects the perfect storm of negative influences the automotive industry faces in the country, including the sustained strength of the Australian dollar, high cost of production, small domestic market and arguably the most competitive and fragmented auto market in the world.”
It is likely that GM will move some, if not all, of the manufacturing operations to markets with weaker currencies and/or lower labour rates. Most likely candidates are China and South America.
Communications manager for GMSA and African operations, Denise van Huysteen, comments: “This announcement has no impact on our operations whatsoever. We remain committed to building, distributing and selling great products in the South African market.”
As we reported yesterday South Africa will no longer be privy to the Lumina models, so no future GM products will be sourced from Australia.
