GM Holden to Dismiss Workers in Australia

General Motors Co.'s Holden unit in Australia plans to eliminate 500 jobs nearly 12% of its workforce by this summer. The company blames the cuts on the strong Australian dollar and intense competition.

The local currency has soared 83% against the yen in less than five years, thus paving the way for a flood of Japanese imports.

Holden Chairman Mike Devereux says exchange rates also have driven up costs at the unit's factories 60% over the past 10 years. As a result Holden is now one of GM's most expensive operations worldwide, he notes.

Australian officials are angry that the company is shedding jobs. State and federal governments committed Au$275 million ($286 million) to Holden last year in exchange for unspecified minimum employment guarantees.