Holden Boss Defends Pay Deal For Holden’s “Long Term Future”

While yet to be signed off and ratified, Holden boss Mike Devereux has defended and clarified the detail of what appears to be a generous pay deal on the table for Holden employees.   

A story broken by the Australian newspaper detailed pay increases purported to be in the order of 18.3 to 22.3 percent over three years - “guaranteed” and "spectacular" according to the Australian’s AMWU sources (Australian Manufacturing Workers Union). 

As reported, the new deal also contained bonuses, improved leave provisions and new entitlements for Holden's 4000 strong workforce.

In a phone hook-up this afternoon, Mr Devereux and Human Resources Director Mark Polglaze, defended the offer by Holden and set about correcting the reported detail at the centre of the EBA negotiations. 

The report (of the pay increases) "doesn't reflect the agreement we’ve made," Mr Polglaze said. "The core of the agreement is nine percent base pay increases over a three-year period.

"That is sub-National average wage rises, sub-CPI increases and sub-auto industry comparison," he said.

Holden has also offered a variable pay component of up to two percent, but tied to the company’s financial performance, quality of vehicles and productivity improvements.

The offer, Mr Devereux said, “… goes a long way towards (securing the long-term future) for this industry.”

The one-off bonus payments, according to Mr Polglaze, “recognised the hardship that our employees experienced throughout the global financial crisis. Our employees experienced somewhere between 25 and 43 percent reduction in their pay, largely on a voluntary basis.”

"We want everyone thinking for the long term in terms of Holden's viability and success," Mr Devereux said. "We think we have a smart deal."

It is, he said, to do with rewarding success; "rewarding our workforce when we make our goals together".

"So when we win on those items (productivity, quality and profitability), we pay the workers more money, when we don’t win on those items, we don’t pay the workers more money."

"We will not sign a deal that's not in the long-term interests of the company in this country."

Holden has clearly been wrong-footed by the breaking of the story. It also must be wondering at the motivation of the AMWU and the Federation of Vehicle Industry Unions in circulating through its ranks such detail – and in such gloating terms - about the progress of enterprise bargaining negotiations with Holden.

Having broken at a time when Holden is also deep in negotiation with the Federal Government for significant co-investment in vehicle manufacturing in Australia, it's potentially damaging for Holden as it creates the perception that taxpayers will be funding paypacket increases for GM employees.  

Coalition workplace spokesman Eric Abetz weighed into the argument on precisely that point, telling the Australian, "...taxpayers are entitled to ask whether they are getting value for money and whether the company is genuinely engaged in transforming itself to stand alone.”

And perceptions are like genies, they're hard to get back in the bottle once they escape.  

While it might not have been the day in the big chair he expected, on the matter of Federal co-investment and assistance for the local vehicle building industry, Mr Devereux had an opportunity to make his thoughts clear.

Pointing to the hundreds of millions of dollars of investment needed for the auto industry in this country, and the role of co-investment regimes in other vehicle manufacturing countries, Mr Devereux said, “Australia has to play the game, or it (vehicle manufacturiing) simply won’t exist.”

That comment will certainly have been heard in other quarters.

Tim O’Brien

- TMR Managing Editor and Industry Analyst