GM Holden Workers Approve Wage Freeze to Save Jobs

GM Holden workers approve a 3-year wage freeze, dodging a threatened plant closure in return.

The Australian Manufacturing Workers’ Union says the vote by 1,700 workers in Adelaide approves changes to their labor contract, including adjustments to shifts and working hours and cancellation of a scheduled 3% pay rise in November.

The AMWU says the package will save GM Holden A$15 million ($13.6 million), but the changes will come into effect only if the General Motors subsidiary commits to building a new generation of vehicles from 2016 to 2022.

GM Holden says the vote took place across several sites over four days in South Australia and Victoria.

“We have a voting process and cadence in place that we are following and plan to announce the results on Friday afternoon, Aug. 16,” the auto maker says in a statement, declining to confirm information released by the union.

AMWU South Australian State Secretary John Camillo says the vote was about job security.

“It’s about keeping the auto industry in Australia, but what has been lost in some reporting is the fact that this package is conditional on Holden’s parent in Detroit guaranteeing they will manufacture the next generation of models at Elizabeth,” he says in a statement.

Under the package, workers will retain a A$1,000 ($908) hardship payment and the opportunity to receive productivity bonuses in each year.

“The union has managed to reduce Holden’s initial demands – including wage cuts and reduction in redundancy provisions – which workers clearly identified as non-negotiable from the outset of talks,” Camillo says.

The AMWU says GM Holden had maintained that if the revamped enterprise agreement was rejected, it likely would cease making cars in Australia – but a final decision either way has been put off until after the Sept. 7 federal election when Tim Lee, GM’s global manufacturing chief, visits from Detroit.

AMWU National Secretary Paul Bastian says the willingness of workers to consider where savings could be made within the company to save jobs still could be undermined with the main opposition coalition parties threatening to strip A$500 million ($454.3 million) in government co-investment should they win the general election next month.

“Throughout negotiations, workers made clear that Holden’s more excessive demands of pay cuts and reductions in redundancy were not negotiable, and the union has been able to modify the company’s position,” Bastian says in a statement.

“It is important to understand that the variation (to the contract) still allows for wage increases to be gained if all parties work towards lifting production levels. But this takes all parties – Holden, government and workers – to lock in the right settings for the industry.”

Bastian says the workers had a very tough decision to make.

“This is about their jobs, their pay, their families,” he says. “But they have also had to consider the implications for the tens of thousands of other workers across the auto sector. It is a horrible position to be put in, and they deserve enormous respect for the burden they have been asked to shoulder.”

It now is time for every other stakeholder to stand up and provide certainty to the sector, Bastian says.

“That means governments and those aspiring to government, the Coalition, providing the certainty of funding needed to keep Holden and the auto sector operational in this country,” he says.