There are still three years before General Motors pulls the pin on its South Australian operations, but plans to soften the blow remain stuck in first gear. By Max Opray.

GMH auto workers Holden out for a miracle

Completed Commodores wait for delivery outside Holden’s Elizabeth plant in South Australia.
Completed Commodores wait for delivery outside Holden’s Elizabeth plant in South Australia.

With its shuttered shop windows, nation-leading urban poverty indicators, and overwhelming reliance on Holden owner General Motors, Elizabeth is the trans-Pacific mirror of Detroit in more ways than one.

Sprawling north of Adelaide, the bold postwar vision for this place as a workers’ utopia today seems a sick joke: according to the federal Department of Employment, an incredible 32.4 per cent of the working-age population here is unemployed, the highest jobless rate in urban Australia.

Detroit, that modern byword for civic collapse, might be suffering similar problems after losing much of its famous car industry, but there’s a disquieting point of difference between America’s Motor City and its antipodean outpost. Where the home city of General Motors has already been through the worst of it, the company’s Holden-monikered operations in Elizabeth haven’t actually closed yet – and they most certainly will. Last Wednesday marked one year since Holden announced automotive manufacturing will move offshore in 2017. If Elizabeth is in trouble with an automotive sector, how bad will things get without one?

After Holden declared it was fleeing Australia’s high operating costs, Toyota didn’t take long to follow suit, all but ensuring a car industry collapse that is projected to directly kill off 50,000 jobs, mostly concentrated around the communities north of Adelaide and the western reaches of Melbourne. This is very bad news for the economies of South Australia and Victoria in general, but for Elizabeth the loss represents nothing less than an existential threat, with the impact to be felt well beyond the car industry.

More than one-third of the 450 Adelaide northern suburbs businesses that responded to the Stretton Centre’s Workplace Futures Survey said they could be forced to close down when Holden leaves, while a South Australian senate inquiry has heard the closure could see Elizabeth and surrounds experience even higher rates of youth suicide, domestic violence and general crime.

The slender silver lining is that Holden gave advance warning of four years: a unique opportunity, perhaps, to set up the industries of the future. So with one-quarter of this time now gone, what have governments and Holden been doing to prevent this oncoming Elizabethan tragedy? 

In Holden’s case, the answer is about what would be expected from a for-profit corporation. The focus has been on protecting the brand, from the breathtaking doublethink of the Here to Stay marketing campaign right through to banning workers from talking with the media about how their workplace has been slated for execution. Holden SA/WA corporate affairs manager Sophie Milic tells me the company has spent much of the past year researching how best to help their employees move forward, but that a communication plan to explain what is happening has not been finalised just yet.

Central to the effort will be an on-site GM Holden transition centre, which the Australian Manufacturing Workers Union (AMWU) state secretary, John Camillo, describes as a place workers will be able to go to research other job opportunities. He tells me that the final workplace agreement with Holden has been agreed to by 80 per cent of workers, and that the deal has been approved by the Fair Work Commission.

“The next question for workers is: where is the next job?” he says.

“The federal Coalition indicated that these people in the auto industry will find good jobs and better jobs, but where?”

Camillo blames the Abbott government for forcing Holden’s hand in the first place by opposing the financial support to the automotive industry being provided by their Labor predecessors. He says that since then, there’s been plenty of contact from Holden and the Labor South Australian government to discuss how to help workers survive beyond the collapse, but that the federal Coalition hasn’t so much as called him.

There were compelling reasons both for and against ending the vast subsidies propping up Australia’s automotive industry, but the Abbott government looks set to pay a heavy political price for choosing to do so. Already, the issue has played a pivotal role in Labor securing two state election victories this year in the most heavily affected regions: South Australia in March and Victoria last month.

The Abbott government has during the past 12 months committed $100 million towards a $155 million Growth Fund for automotive workers that encompasses a skills and training program, careers advice, and the supporting of investment into non-automotive manufacturing and other sectors.

Critics, including the Weatherill government in South Australia, have pointed out that the commitment is dwarfed by the $900 million in cuts to car industry assistance that the Abbott government is trying to push through the senate. As the Automotive Transformation Scheme was created by the former federal Labor government before Holden and Toyota announced their plans to withdraw in 2017 (the scheme is scheduled to continue until 2021), Minister for Industry Ian Macfarlane argues that it needs to be trimmed.

The cuts passed the lower house but are yet to be put to a hostile senate, where Labor and a number of crossbench senators, including Motoring Enthusiast Party senator Ricky Muir, have launched an inquiry into the entire automotive sector.

As for the Weatherill government, which fought and won an election promising to look after Holden workers, Automotive Transformation Minister Susan Close says the past year has been spent “sitting down with suppliers and workers to make sure we have the best possible assistance”.

She points to the establishment of a taskforce and a $7.3 million transition program, with 15 training organisations selected to deliver skills development to auto workers. Close also noted that the Labor government has contributed to the Commonwealth effort, including $12 million to the next generation investment program for manufacturer grants. She cites opportunities for employment in growth areas such as food and beverage, health and sustainable building products.

Funding is also available from both federal and state government programs to help auto component suppliers diversify, but back at the AMWU, John Camillo is uncertain about how many will take up the opportunity.

“My understanding is that some of the big multinational suppliers will close up shop and follow the automotive industry wherever it goes around the world; they won’t stay and try to diversify,” he says.

“The opportunity is there, though, for the second- and third-tier suppliers; with government funding, they could try to diversify and go into defence or mining.”

The reality is, however, with the mining slowdown and South Australia’s grasp on the next submarine contract looking shaky at best, it is uncertain whether the defence and resources sectors are even going to sustain their current outputs in South Australia, let alone provide extra work for new entrants.

Camillo cites the $10 billion LAND 400-vehicle contract, which South Australia is bidding for, as a potential new source of business for these suppliers, and says the vehicles could even be manufactured in the old Holden facility.

This, of course, is dependent on what Holden decides to do with the building and whether the contract goes to South Australia at all. Through his veneer of optimism, Camillo continually returns to that underlying fear: are there really going to be enough jobs?

“It’s no good training 100 people to become, say, forklift drivers, if there’s three forklift jobs in South Australia,” he says.

“It’s a waste of resources to train someone to be something if there’s no employment at the end of it.”

For South Australia and Victoria in general, but most particularly Elizabeth itself, this is the problem: auto workers are being offered job search help and training up to their eyeballs from all levels of government and Holden itself, but what isn’t evident is a plan to develop industries of a large enough scale that all these new skills can actually be put to use.

As it is, reskilling a flood of soon-to-be jobseekers in a place where one in three is already unemployed is tantamount to rearranging deckchairs on the Titanic. Plenty of time remains, but the vessel is taking on water and there aren’t anywhere near enough lifeboats. If a rescue plan isn’t hatched soon, those aboard the good ship Elizabeth will most assuredly sink without trace.

This article was first published in the print edition of The Saturday Paper on December 13, 2014 as "Holden out for a miracle".

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Max Opray is Schwartz Media’s morning editor and a freelance writer.

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