General Motors Holden’s managing director Mike Devereux has highlighted the unique set of difficulties facing Australian car-makers and said the company is “laser-focussed” on making savings as it attempts to remain viable.
In an interview with the ABC’s Inside Business program on Sunday, Devereux said that the company is facing costs $3,750 higher per vehicle than elsewhere to make its cars in Australia. A combination of factors including distance, logistics, scale, high local component costs, and comparatively expensive wages were all making operations difficult.
"There are a lot of different slivers of cost, we are going after every one of them as intelligently as we can,” Devereux told the ABC.
"Labor isn't the entire story, it is part of the story and it needs to stand the same scrutiny.
"We are laser-focused on reducing every single part of the eco-system of cost in making a car."
Devereux has this month said that Holden would cease manufacturing in Australia if the Coalition – which is positioned to win the upcoming federal election, scheduled in September – were to make its promised reduction of $500 million in assistance to the industry leading up to 2015, or if workers did not agree to take a pay cut. He has made the same threat if workers don’t accept reduced wages.
The Holden boss praised his workforce’s sacrifices to help the car company survive in Australia during the global financial crisis.
"Some of them took pay-cuts of 25, 30, 40 per cent during the GFC to bridge the gap," he said.
Devereux again declined to say what his salary was, and he has previously refused to consider a reduction in pay.
The ACTU’s Dale Oliver will today take a shot at Devereux’s demand that his workers accept a decrease in their pay.
The Australian reports that Oliver will use an address to a Committee for Economic Development of Australia conference to criticise Devereux, saying that wage costs were only a tiny component of the overall cost of making cars, and were dwarfed by movements in exchange rates.
"To hold the implied threat of a job loss over workers' heads if they refuse to take a pay cut is a dangerous precedent," Oliver will say on Monday.
"It is particularly the case in an industry where wages are around 17 per cent of total costs. To put that into perspective, the saving from a 10 per cent cut in wages would be totally wiped out by a very small fluctuation in the value of the Australian dollar."