Holden has today asked its workforce to accept a $200 a week wage cut and review their conditions in a bid to improve competitiveness at its Elizabeth plant and prevent its Australian assembly operations from closing down. From the AFR:
Holden is asking its manufacturing workforce to take a $200 a week pay cut to soften what managing director Mike Devereux describes as unprecedented economic challenges for the nation’s car makers.
Mr Devereux told reporters on Tuesday afternoon that the company would work together with employees and the union to achieve “labour-related cost reductions and productivity improvements”.
…well-placed sources suggest the company is seeking about $18 million a year in savings from its manufacturing operations in South Australia…
“This is about giving Holden employees a direct say in their future. We can’t survive as a local manufacturer if we’re not competitive.”
Holden is in the process of laying off 500 staff across its Adelaide and Melbourne operations.
Unfortunately, these sorts of announcements are likely to become more commonplace. The fact of the matter is, Australia is currently a very high cost nation and, in the absence of significant productivity improvements or a significant devaluation of the exchange rate, wages will need to adjust downwards or risk losing jobs.
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