General Motors cuts down work force in Australia

General Motors cuts down work force in Australia

General Motors is already feeling the heat from the Japanese competition in the domestic market in United States. Now, the effects are showing in its outsourced plants. While, the company is working hard on recovering from a slump in the Indian market with increased marketing budget, the Australian unit is not so lucky. GM has announced that they would be cutting 1,400 jobs, or 15 percent of its workforce in the Holden Unit.

The company is losing business to cheaper imports and also the weakening dollar compared to the Australian currency. They are also planning to cut down on daily production of vehicles in the unit by about a fifth to 620 vehicles. The latest decision comes just after a month before the planned closure of Mitsubishi Motors Corp.’s South Australian engine plant. That event would result in loss of 650 jobs.

A senior market analyst Rajeev Gupta spoke about this decision by the company: “The Koreans and the Japanese are hurting all automakers that aren’t Asian-based. Asians have the advantage of lower costs and they’re also probably more innovative.” The competition from Toyota, Mitsubishi and Mazda has led to decrease in market share for the company and it has to take these cost cutting measures to save its position in the country.