Holden Fires 500 Workers in Australia, Future Shaky

Bertel Schmitt
by Bertel Schmitt

After having received more than $2 billion in subsidies from, the Australian government in the past 12 years, GM’s down-under Holden unit announced that it will lay off another 500 workers in response to falling demand and the high Australian dollar, Australia’s ABC News reports.

Cheaper imports draw customers away from Holden’s locally made Cruze and Commodore models, the company says.

Holden’s managing director, Mike Devereux, lays the blame for much of the Australian dollar’s appreciation at the feet of nations, such as the US and Japan, that have been deliberately devaluing their currencies. “Importantly, the currency plays being made by other countries mean that were are not competing on a level playing field, not even in our own backyard,” Devereux said.

A high Australian dollar makes imports cheaper and exports unattractive. When quizzed about the future survival of Holden’s Australian production and design operations, Devereux said the company was committed to staying in Australia but could offer no guarantees.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Jeff S Jeff S on Apr 09, 2013

    Robert Ryan--That is interesting, I always heard how Thatcher had privatized the nationalized British industries. The Iron Lady was given to political spin as well. Nothing surprises me. I do agree that government loans and/or nationalization of businesses for the most part lesds to failure. I hope the Holden, Opel, and GM NA survive but I do have my doubts. Robert I guess I misunderstood about Volvo and Saab, but didn't they get loans from the Swedish government?

    • RobertRyan RobertRyan on Apr 09, 2013

      Jeff S. No. The larger corporations had to broken up like Saab-Scania. After selling the car division it became Saab (Aircraft and Military Defence equipment) Scania(Trucks and Marine/Industrial engines). Volvo are the injection of cash from the sale of its car division wanted to takeover Scania and the EU blocked that.

  • RobertRyan RobertRyan on Apr 09, 2013

    CJinSD ," in fact they tend to pay rent in apartments a few blocks from the beach, own cars, and many of the other things that might constitute a reasonable definition of aspects of earning a living wage" No-one in their right mind thinks that waitressing and working as bar staff is a "career choice". More a supplement to a University course, acting etc. Not fulltime employment. I know people do it full time in the US as they have no other choices

    • See 1 previous
    • RobertRyan RobertRyan on Apr 11, 2013

      @CJinSD Lost your reasoning on this? just making a comment that is all. "Australia must not be the land of milk and honey if you have to focus on the US’s problems " Now I can AGREE with this. "Sorry buddy, but reality is that both our nations are going the wrong way.

  • Jeff S Jeff S on Apr 09, 2013

    Thanks Robert for the information. At one time Volvos sold fairly well in the US especially the station wagons. Volvos had a reputation of running almost forever. It sounds like this forced breakup is similiar to a US antitrust action. I see lots of Volvo tractor trucks on the roads. I believe several years ago that Volvo bought White trucks. I remember either you or Big Al saying about a year ago that Ford could be leaving Australia. Hopefully Holden is able to stay in Australia. The global market has become very competitive and will become even more so. I do understand where Big Al is coming from about the US manufacturers developing globally competitive vehicles, especially in the truck market. It is good to have a global perspective instead of just a US only view.

  • RobertRyan RobertRyan on Apr 12, 2013

    @ect, This article explains the problem a bit more. http://www.macrobusiness.com.au/2013/04/a-new-australian-dollaryuan-nirvana/ It still does not relieve industry of a High Australian Dollar that is having a negative effect on many Trade Exposed industries. I think eventually the Reserve Bank will do more than just drop interest rates. Devaluing the currency like the US/Chinese and Japanese have(dramatically in the case of the Japanese over the last 6 months) by printing more money ,is probably what has to be done.