Holden could leave Australia in 2016 if workers don’t agree to pay reduction

Holden’s workers were given an ultimatum on Tuesday: take a pay cut or the company would join Ford and stop making cars in Australia in 2016.

Mike Devereux, chairman of General Motors Holden, told the company’s staff that its Port Melbourne (300 workers) and Elizabeth (1700) should consider a pay cut of $200 per week, News Limited reports.

"If we don't accomplish [pay cuts in August] it is highly likely we will not make cars in this country," said Devereux, who ruled out taking a pay reduction himself. The chairman has said that executive pay has already been addressed and he and high-level staff make less than the average amount.

Holden agreed to a 10-year plan to continue manufacturing its vehicles in Australia in 2012. “That plan would see Holden invest a billion dollars in this country and secure production of two all-new global vehicles out to 2022,” said the company in a statement last month.

However, the company has recently threatened to quit its car-making operations in Australia if the Coalition was elected and acted out its pledge to reduce automotive industry subsidies by $500 million up to 2015.

Fairfax reports that opposition industry spokeswoman Sophie Mirabella wasn’t contactable yesterday and, at the time of writing, has not commented of Holden’s statement.

In a recent announcement of its financial results, Holden’s Australian operation said that locally-made cars were losing money, and it only profited from the sales of imported vehicles.

Any pay cut to workers – production staff make an average annual salary of $55,000, according to Fairfax Media – would have to be approved by a vote, scheduled for August.

The AMWU has said it would cooperate to try and help Holden remain viable, and there were a number of ways that efficiency could be improved.

"That discussion, when the company and union come together, could be about hours of work, it could be about programmed days off … it could be a number of issues we need to talk about," the union’s John Camillo told AAP.

A spokeswoman for Toyota Australia said that her company remained committed to making cars in the country, regardless of whether or not Holden or Ford – who announced last month that it would cease local manufacturing in October 2016 – remained in Australia.

Criticism of the government subsidies gained by Australia’s remaining three car manufacturers has become more frequent since Holden revealed in April that it had received $2.2 bn in assistance in the past 12 years.