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April 9th, 2013 
Source: adelaidenow
PREMIER Jay Weatherill has conceded the past 24 hours have damaged the state’s relationship with car giant Holden.
He will meet with the company’s managing director Mike Devereux later this week to attempt to repair it and renegotiate an agreement on government assistance for the carmaker.
Fronting reporters at Parliament House ahead of Question Time, Mr Weatherill said while there were signed letters exchanged between the government and Holden and an agreement tabled in Parliament the final funding contract had not been signed.
In response to calls to release correspondence with Holden, Mr Weatherill said much of it was commercial in confidence and the company was “violently” opposed to its release.
Mr Weatherill later told Parliament: “We will not be disrespected by any corporate citizen”
Opposition Leader Steven Marshall earlier said he believed the Premier’s response to Holden”s decision had “absolutely” damaged the relationship between the two.
Mr Marshall called on the Premier to release whatever documentation he had that laid out the agreement between the government and Holden.
“What we’ve got to do is find out exactly what has been agreed to,” he said.
He also asked Mr Weatherill to bring the Opposition in on any renegotiation of the agreement.
“We have been calling since day one for a cost benefit analysis to be done,” he said.
However Mr Marshall would not say if his party would abandon financial support for the carmaker if the analysis showed it was not worthwhile.
He also would not say if he thought the already promised $50 million should be withheld from Holden.
“The simple fact of the matter is we have got to save this sector,”he said.
“It would be absolutely catastrophic if this company closes in South Australia.
“The flow-on effects would be devastating.”
Earlier, Premier Weatherill vowed not to hand over $50 million in light of Holden’s decision to axe local workers.
Holden plant workers on the afternoon shift gather to hear the news of redundancies at the plant. Picture: Tait Schmaal
In a series of radio interviews this morning, Mr Weatherill revealed the only “contract” governing the deal is an “exchange of correspondence” with the General Motors headquarters in Detroit.
“We won’t be handing over our $50 million – we have made that clear and now there is an important discussion that needs to be had about the future,” he said on ABC radio.
“This was always about ensuring the long term future of Holden.”
However, Mr Weatherill said he did not want to “throw the baby out with the bathwater” by blocking funds which would help Holden transition into General Motors’ global supply chain and protect the remaining workforce, noting it was easier to build an advanced manufacturing base from existing operators than from “ashes”.
He also warned closure of Holden would be catastrophic with 16,000 job losses in the northern suburbs from the ripple effect.
Mr Weatherill conceded he had nothing in writing that Holden would maintain existing job numbers in exchange for government financial support.
However, he stressed the exchange of correspondence with General Motors included minimum job numbers and that laying off 400 workers at Elizabeth by August would breach it.
He declined to name the minimum job figure that Holden was supposed to maintain.
“There was detailed correspondence to Detroit where they set out in clear terms the offer and we set out in clear terms our acceptance of that propostion,” he said.
“If they insist there is no contact, there is no obligation to hand over the $50 million.”
Mr Marshall ridiculed the negotiations, saying: “The simple fact is there is no signed contract – how can the Premier make a commitment to hand over $50 million of our money without a signed contract?” he said.
Also earlier today, SA Unions said Holden was guilty of shocking corporate behaviour after its decision to axe 400 Adelaide workers.
State secretary Janet Giles says Holden should be forced to comply with the terms of the agreement it signed with the SA government to protect jobs.
“The union movement fully supported the package of assistance at the time it was announced, because we agreed it was an important move to secure South Australian jobs in manufacturing,” she said in a statement.
“It will have ripple effects right across the South Australian manufacturing sector, which has already lost so many jobs in the past few years,” she said.
“Every South Australian will be shocked about this kind of corporate behaviour.
“Holden took money from South Australian taxpayers and then just tore up the agreement.”
The Victorian government has declared Holden won’t see a dollar if it breaks the taxpayer-backed funding deal struck last year.
Prime Minister Julia Gillard announced the $275 million rescue deal for the car maker, including $215 million in federal money. A further $50 million was to come from South Australia and $10 million from Victoria.
Stunned Holden workers stormed out of the Elizabeth plant today after they were told 400 of its 2150 assembly line jobs will be cut by August. Another 100 jobs will go in Victoria.
Betrayed after a handshake – Holden chairman Mike Devereux, left, watches as General Motors Chairman Dan Akerson shakes hands with South Australia Premier Jay Weatherill in Detroit in January. Picture: Tony Ding
Holden’s shock announcement provoked a furious response yesterday from Mr Weatherill, who said the company had reneged on an agreement to maintain job numbers at the plant in exchange for $50 million in State Government assistance.
Holden’s restructure involves a “re-rating” of the Elizabeth production line from 400 Commodore and Cruze models each day to 335, costing 400 SA jobs and also cutting 100 engineering jobs in the Victorian product development workforce.
Premier puts Holden’s $50m funding in doubt
It is Holden’s biggest round of job cuts since the global financial crisis.
Mr Weatherill said he only learned that voluntary separation packages would be offered shortly before workers were told early yesterday afternoon.
“In my view, an agreement has been breached,” Mr Weatherill said.
“It wasn’t just an agreement with (Holden chairman and managing director Mike) Devereux, it was an agreement with the chief executive of General Motors Holden, Mr Dan Akerson. It was an agreement that I shook my hand with that man on.”
Plenty of help for axed workers
GM Holden chairman and managing director Mike Devereux announces that 400 jobs will go at Holden’s Elizabeth plant. Picture: Tait Schmaal
“I’m talking about the nature of the agreement Holden reached with us in the full knowledge of all the possible circumstances that could occur in the world of automobiles,” Mr Weatherill said.
“There were minimum employment levels (in the agreement with government). This decision today would breach those agreements.
“I’m insisting that corporate citizens behave with integrity and keep their agreements. I’ll be reflecting on our options … having only learned about this matter today.”
Action must follow Jay’s tough talk
Victorian Premier Denis Napthine says no money has been paid out yet by his state and Holden won’t receive a dollar unless it sticks by the terms of the agreement.
“We expect Holden to adhere to the principles of the agreement that’s been struck,” he said.
“We haven’t paid any money to Holden and we won’t pay money to Holden if they don’t adhere to the principles agree to.”
However, Mr Devereux denied that the agreement had been breached, or that it contained job guarantees.
Holden employees watch the unveiling of the VF SS Commodore sports sedan at the Elizabeth plant in February. They now face an uncertain future with more job cuts looming. Picture: Mark Brake
“We are yet to put pen to paper,” he said.
The $50 million in State Government assistance is part of a larger package involving the Federal Government.
In March last year, Mr Weatherill and Prime Minister Julia Gillard announced a $275 million rescue package for Holden to keep the Elizabeth plant operating until at least 2022.
Mr Devereux gave no clear indication that Holden’s Elizabeth plant was secure into the future.
He said he was “gutted” to tell workers at the northern suburbs plant that jobs would be lost.
Billions handed out to Aussie car makers
“This is a very difficult decision because people and their families are involved. These are hard-working Australian men and women and we will be doing everything in our power to help them make informed decisions about their future,” Mr Devereux said.
“To protect the long-term future of Holden we have been forced to take these actions
“But to protect the long-term future of Holden we have been forced to take these actions and this restructure will better align Holden with projected future volume and workload.”
In February, Holden production workers reacted angrily when a plan to reduce their production line tasks was revealed, saying the change would likely lead to a higher rate of injury as they performed the same tasks for longer each day.
Holden executives then gave no indication there could be job cuts but Mr Devereux yesterday said the company had started to consider the need for job cuts as far back as last July.
Workers leaving the Elizabeth plant after being told the news had little to say.
“It was very terrible, a lot of people were wiping tears out of their eyes,” one worker said.
A lot of people were wiping tears out of their eyes
Another worker stuck waiting at the pedestrian crossing erupted in anger: “Doesn’t anything bloody work around here?”
Australian Manufacturing Workers Union state secretary John Camillo said shop stewards believed the 400 voluntary separation packages would be achieved without the need for forced redundancies, but he personally felt some workers would be forced out of their jobs.
“This Friday we will meet to discuss the numbers but I don’t think they’ll get the 400 they are looking for,” he said.
Industry and Innovation Minister Greg Combet’s spokesman confirmed the Federal Government did not tie its support to the car industry to minimum employment levels.
Analysis: Holden had little choice
“Our support is designed to help auto makers remain viable and competitive in a tough economic environment,” the spokesman said.
Most of the work done on the new Commodore has been completed, ahead of its June launch.
The announcement comes just one week after Holden released figures that showed it had received $2.17 billion in government funding over the past 12 years, roughly twice as much as Ford ($1.1 billion) and Toyota ($1.2 billion) received over the same period.
The 500 job losses announced this afternoon follow 180 job cuts at Elizabeth in November 2012, and a further 40 at the Port Melbourne engine plant in March 2012.
The latest job cuts are yet another grim reality facing the Australian car industry as it struggles to compete with cheap imported cars aided by the strong Australian dollar.
Holden said the job cuts were due to a reduction in demand for its locally made Cruze small car “led by the high Australian dollar”.
Gallery: Holden through the ages
Holden says it has committed to local car manufacturing until 2022, while Toyota is negotiating for the next-generation Camry it plans to build to 2024. Ford is yet to apply for government assistance for a locally made car beyond the 2016 deadline set for the Falcon sedan and Territory SUV.
THE FUNDING BREAKDOWN
From the Federal Government
$1.5bn – Automotive Assistance 2001 to 2010 Automotive Competitive and Investment Scheme
$12.5m – 2001 Strategic Investment Incentive for the training of automotive industry employees and the development of industry relevant technology (Engine Plant)
$6.7m – 2006 Safety Enhancement Project
$150m – 2011 to 2012 Automotive Transformation Scheme
$189m – 2008 to 2012 Green Car Innovation Fund Grants
$3m – 2010 to 2011 Automotive Supply Chain Development Program
$1,864,107,018 – Subtotal automotive programs assistance
$215m – Not yet paid. 2012 New Generation Co-Investment Grant.
$2,079,107,018 – Total Automotive Programs Assistance
$78,640,619 – General assistance 2001 to 2012 under Tradex scheme where importers gain exemption on customs duties and GST on goods to be re-exported.
$17,199,894 – Vocational education training programs.
$2,174,947,53 – Total of benefits paid, gained or pledged January 1, 2001, to December 31, 2012.
From the South Australian Government
$30 million – Attracting production of Holden Cruze to Elizabeth.
$5 million – Labour adjustment following the downsizing of vehicle operations (closure of third shift).
$1 million – GM Holden secondary employment activity to assist workers to find employment while on reduced shifts.
$2.2 million – Safety enhancement project.
$38.2m – Total grants paid
$50 million – pledged but not paid for the new generation vehicle. Due in 2016-17 and 2017-18 financial years.
$88.2m – Total paid or pledged.
‘World-class’ VF Commodore launched
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