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Rules for Planning Large Fleet Production

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Rules for Planning Large Fleet Production The Australian Automotive Manufacturing Industry- Reform is the Norm Outline • The Australian automotive manufacturing industry • Reform over the past 20 years • GM Holden today • New reform agenda • Summary 2 The Australian Automotive Manufacturing Industry • important role in the development of the Australian economy • one of the largest sources of employment • one of Australia’s most significant export industries • intensive developer and user of advanced technologies • the largest sector in manufacturing 3 Global Vehicle Sales- Current 70 60 50 40 30 20 10 2005: 64.7 mil. 0 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 Global Car Parc: 750 mil. 4 The Australian Automotive Market 1100000 1000000 900000 July 2000 - GST 800000 700000 600000 500000 400000 300000 200000 Annual Market Size (Units) 100000 0 1970 1975 1980 1985 1990 1995 2000 2005 5 The Australian Automotive Manufacturing Industry • The Australian automotive industry developed with considerable govt support • Features of this highly protected industry • Tariffs • Quotas on imports • Low productivity • Poor quality • Too many manufacturers focussed on the small Australian market • Low levels of technology • As a result, the industry’s lack of global competitiveness required structural change 6 Reform over the past 20 years • The Passenger Motor Vehicle Plan • A set of policies designed to reduce the industry’s dependence on state support and improve productivity • Quotas on imports abolished • Tariff reduction plan • 1985- 57.5% • 1992- 35% • Now at 10% • Export facilitation scheme 7 Reform over the past 20 years Award Restructuring • changes to job structures in order to achieve a more flexible and better skilled workforce • shift to wages based on nationally consistent skill levels • reduction from 240 pay classifications to 3 for non trade and 6 for trade employees 8 Reform over the past 20 years • Central to the implementation of this award structure was the introduction of new arrangements for the training of the workforce • training and skill formation became bargaining currency • formal training for the so- called ‘unskilled sector’ • broadly based trade training which would allow for multi skilling and reduce demarcations 9 Reform over the past 20 years Enterprise Bargaining • EBA embraced in the early 1990s and 5 agreements negotiated to date • opportunity to negotiate further enhancements to improve flexibility and productivity •used as the vehicle to implement lean manufacturing principles 10 GM Holden today What does our business look like today? • Holden still an iconic brand • Today we employ approximately 8,200 people • GM’s investment in Australia to support growth is significant • A$6.1 billion over 10 years • A$2.0 billion between 2002 and 2006 • Now fully integrated into the global organisation 11 GM Holden today Vehicle Manufacturing • 4,500 employees • 140,000+ cars per year over two shifts • 620 cars a day – a new car every 76 seconds • 152,000 cars built in 2005 •$532 million investment in plant upgrade for VE/WM just completed • Vehicle exports to every continent except for Antarctica- 60,000 in 2005 12 Holden Vehicle Exports 1992-2005 60000 50000 40000 30000 Vehicles Exported Vehicles 20000 10000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 13 GM Holden today Engine Manufacturing • 1,200 employees • 315,670 engines produced in 2005 • Engine Manufacture: • Family II 4 cylinder • Global V6 • $435 million investment in Global V6 plant • Component Manufacture: • Iron castings • Brake and suspension components • Australia’s largest exporter of automotive components • South Africa, Korea, China, Thailand, Europe 14 GM Holden today • Now fully integrated into the global organisation GME GMNA Think globally, act locally GMAP GMLAAM 15 GM Holden today A global business Each business unit managed by the global function as opposed to the country GMNA GME GMAP GM LAAM GMAC Product Development Manufacturing/LR Sales/Service/Marketing Quality Powertrain Human Resources Legal/Public Policy Purchasing/Supply Chain Global Processes R&D/Strategic Planning Finance Communications IS&S 16 GM Holden today Global Engineering & Design Centres • significant role in GM’s global products •engineering and design centre strategy • now providing intellectual property as part of GMs global •1200 Engineering and Design staff • largest private sector R&D spend in Australia 17 GM Holden today A global business Global Architectural Development Teams 18 New Reform Agenda Workchoices Business seems to be taking 1 of 3 approaches • Business as Usual • Wait and See • Rush to Reform 19 New Reform Agenda Considerations Regardless of the level and extent of legislative reform in this area, there are 3 key considerations • Unions like any organisation are organic in nature ie. will grow and adapt to their environment accordingly • Likewise, other stakeholders (eg. AIRC) will re-invent themselves as necessary to continue to have a meaningful role • Employees are the key – how do we engage with them? •Attract • Retain • Maintain • Motivate 20 Summary • Survival of the automotive industry in Australia and companies like GM Holden now not only depends on our ability to remain internationally competitive and respond to the global market pressures • Also depends on our capacity to contribute fully as part of a global organisation 21 Summary Growth in Emerging Markets Europe: 25.3 million (+22%) US: 25.5 million (+47%) China: 15.8 million (+587%) Japan: 5.3 million India: 4 million (-10%) (+150%) Brazil: 6.4 million (+121%) Australia: 1.2 million (+50%) 22 Summary Reducing Tariffs 800 40.0% f/c 700 35.0% Note: 2010 = 5% 600 30.0% 500 25.0% 400 20.0% Tariff Rate Tariff 300 15.0% Annual Volumes (000) 200 10.0% 100 5.0% 0 0.0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Imports Domestic Exports Tariff Rate 23 Summary Australia- an open market 24 Summary Large Passenger Vehicle Market 250000 200000 150000 100000 50000 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Small Large Compact & Medium SUV Source: VFacts 25 8080 Assembly 5050 Die & Stamping Summary Global Capacity 4747 Powertrain 12 Trollhättan,Trollhättan, SwedenSweden Complete Knock Down (CKD) 37 LaLansnsiinngg CrCraafftt CeCentnteerr,, MMII Joint Venture (JV) Bay City, MI Trollhättan,Trollhättan, SwedenSweden Bay City, MI rd Eisenach, Germany 11 3 Party (3P) LaLansnsiinngg DeDellttaa TTwwpp,, MMII Eisenach, Germany OsOshahawwaa TTrrucuckk,, ONONTT 66 Not Currently Building STSW,STSW, MIMI Saginaw , MI Gothenburg,Gothenburg, Sweden Sweden Saginaw , MI Windsor,Windsor, ONTONT LaLansnsiinngg GrGraanndd RiRivveerr,, MMII RüRüsselssselshheeiim,m, GGeerrmmananyy 55 Approved Future Plant Oshawa 1 & 2, ONT Oshawa 1 & 2, ONT KaiserslauKaiserslautteernrn,, GGeerrmmananyy SSaaginaginaww MMCCO,O, MMII Soedertaelje,Soedertaelje, Sweden Sweden Lansing, MI Rüsselsheim, Germany Lansing, MI Romulus, MI Trans Rüsselsheim, Germany Romulus, MI Trans Kaiserslautern, Germany Gunsan, S. Korea JV Changwon, S. Korea JV OsOshahawwaa,, ONONTT Kaiserslautern, Germany Gunsan, S. Korea Changwon, S. Korea JanesvilleJanesville 11 && 3,3, WIWI Lansing Regional. MI FFlliinntt 11 && 3,3, MMII GrGraandnd BlaBlanncc,, MMII RüRüsselssselshheeim,im, G Geermrmananyy Lansing Regional. MI Romulus, MI Eng Romulus, MI Eng AAnnttwweerrpp,, BBeelglgiuiumm Bochum, Germany Gunsan,Gunsan, S.S. KoreaKorea JV Changwon,Changwon, S.S. KoreaKorea JV StSt.. CatCathharinarines,es, OONNTT Bochum, Germany Indianapolis, IN Indianapolis, IN Lansing Tooling, MI Flint, MI Gliwice, Poland Lansing Tooling, MI Flint, MI Gliwice, Poland Gunsan, Korea Willow Run, MI Antwerp, Belgium Gunsan, Korea Changwon,Changwon, KoreaKorea JV Orion,Orion, MIMI Willow Run, MI Antwerp, Belgium BocBochhum,um, GerGermmanyany CCAAMMI,I, OONNTT JV Indianapolis,Indianapolis, ININ Lansing C, MI Lansing C, MI FFllintint,, MMII NN&&SS Gliwice,Gliwice, PolandPoland BoryBoryonong,g, Kor Koreeaa JV WiWixxoomm,, MIMI IBC, Luton, UK Bochum, Germany Livonia, MI IBC, Luton, UK Bochum, Germany Livonia, MI CCAAMMII-I-Innggeersoll,rsoll, OONNTT JV Mishawaka,Mishawaka, ININ 3P Lansing M, MI Lansing M, MI Pontiac East, MI Bupyeong 1 & 2, S.Korea 3P Pontiac East, MI BialaBiala (Bielsko), (Bielsko), Poland Poland JV Bupyeong 1 & 2, S.Korea LutonLuton IIBBCC,, UUKK AAMMTT SouthSouth LLyyonon,, MMII Marion, IN Pittsburgh, PA Marion, IN Pontiac, MI Pittsburgh, PA Tychy, Poland JV Bupyeong, S. Korea 3P Pontiac, MI Tychy, Poland SShheennyayanngg 2,2, CChhininaa Bupyeong, S. Korea BeBeddfforord,d, MMII Muncie,Muncie, ININ WaWarrerren,n, MIMI Fort Wayne, IN Tonawanda, NY Fort Wayne, IN Tonawanda, NY SShheennyayanngg 1,1, CChhininaa JV BuBupypyeoeonngg,, S.S. KoreaKorea JV ZAO Avtotor Kaliningrad, Russia 3P GrGraandnd RaRapipidsds,, MMII ZAO Avtotor Kaliningrad, Russia EllesmereEllesmere Port,Port, UKUK Detroit-Hamtramck, MI Detroit-Hamtramck, MI Messena, NY Bupyeong, Korea JV FFaairfirfax,ax, KSKS Messena, NY Bupyeong, Korea CJSC,CJSC, Zaporozhzhye,Zaporozhzhye, UkraineUkraine 3P EllesmereEllesmere Port,Port, UKUK Baltimore, MD FFaairfirfax,ax, KSKS Baltimore, MD LiLinnddeenn,, NJNJ AvtoVAZ,AvtoVAZ, Togliatti,Togliatti, RussiaRussia JV Renault, Batilly, France 3P Baltimore,Baltimore, MDMD Renault, Batilly, France NUMMI-Fremont,NUMMI-Fremont, CACA JV Wilmington, DE Szentgotthard,Szentgotthard, Hungary Hungary Yantai/Dong Qingdao, China JV Wilmington, DE Yantai/Dong JV Qingdao, China Yue, China HeuliezHeuliez,, CerizCerizaayy,, FranceFrance
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