Holden is to cease production of four-cylinder engines at its Melbourne plant in a move unions say will cost 500 full-time jobs.
The company today announced it would stop producing its Family II four-cylinder engine at its Fisherman's Bend plant.
Full details of the Family II announcement were due to be released this afternoon.
Unions represented at the plant said 500 workers would lose their jobs.
Australian Manufacturing Workers Union car division federal secretary Ian Jones said the decision would cause workers and their families “significant hardship” in a shrinking local automotive industry.
He expected production of the four-cylinder engines would not finish until the end of next year, allowing some time to try to negotiate new jobs.
But the union and workers were disappointed Holden had made the decision before the current inquiry into the industry's competitiveness, headed by former Victorian premier Steve Bracks, was finalised next month.
“It's particularly disappointing to us as a union and to our membership, given we're in the midst of an automotive industry inquiry headed by Steve Bracks and supported by the Prime Minister Kevin Rudd,” Mr Jones said.
He said workers had been aware their jobs were on the line for some time and the union had unsuccessfully been trying to work with Holden to try and find a replacement product it could make in Melbourne.
The four-cylinder engines, which are not used in Australian vehicles, have been exported to South Korea for Daewoo cars.
“We have been working with Holden for a long time to see if there was potential for a new product,” he said.
“They certainly have capacity for new product.”
Mr Jones had hoped some workers could be redeployed in Holden's “highly successful” V6 engine production.
But he said in the long term, moving towards building more environmentally sustainable vehicles was the way to renew the industry.
Ford last year announced it would axe up to 600 jobs at its Geelong plant from 2010.
Holden axed 600 jobs in Adelaide last year and Mitsubishi cut 100 jobs in Adelaide in February.
Mr Jones said the industry was going through a “very difficult period”.
“You would have to be blind not to see that,” he said.
But he vowed the industry would survive and become stronger, as long as a national plan was formed for its development.
