Another motor vehicle component supplier in difficulty

[BroadyFord]

Hundreds stood down as plant shuts doors


http://www.theage.com.au/victoria/hu...101-28lez.html

About 400 auto workers may have lost their jobs at plants in Melbourne and Adelaide.

Autodom Limited — which supplies parts vital to Ford, Holden, Toyota and truck maker Kenworth — has announced it is closing both its factories "indefinitely" while it comes up with a restructuring plan.

It also issued a statement all but demanding the major car companies and state and federal government help it to rebuild — or face the huge costs of it going under.

The company's shares have been suspended on the Australian Securities Exchange after it failed over several months of negotiations to come to an agreement with the auto companies that buy its products.
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Autodom owns DAIR Industries, which makes makes rear bumper assemblies, foot brakes, clutch mechanisms, hood hinges and parking brakes, and employs about 150 people in Dandenong South and another 30 or so in New Gisborne.

A statement issued by Autodom said it had been "forced" to make the difficult decision because car makers had not given it the deal it needed to remain sustainable.

"The closure of the facilities, which collectively employ 400 people, is indefinite," the statement said.

Chief executive Calvin Stead said the business's failure could potentially result in significant direct costs to the car industry and taxpayers.

"We need time and assistance to reorganise ourselves and structurally change the direction in which we are headed," Mr Stead said.

Australia's car industry has slashed the number of cars it builds annually in recent years.

Mr Stead said that, because of this low volume of cars being built, his firm's business could not continue without mutual cooperation between the auto companies and the component sector.

Governments also had "an important role" to play, he said.

Leigh Diehm, the state secretary of the Australian Manufacturing Workers Union, said staff had arrived at the plant from 5.30am. At a 7am meeting they were being stood down.

The stand-down is, technically, until Friday — but the reality is it could be a permanent dismissal.

‘‘They are looking for some money from the federal government to assist in their so-called restructure, and some sort of concessions from the car companies,’’ he said.

Autodom's closure will affect Australia's three main car manufacturers — Holden, Ford and Toyota — but will have the most immediate impact on Ford in Melbourne.

‘‘If the company goes into administration it could be a situation where the car companies could find themselves without a supplier,’’ Mr Diehm said.

However, all three car companies had ‘‘quite a bit of stock in reserve’’, he said, meaning it would take time for the effects to flow through.

Mr Diehm called on the Baillieu government to step in, along with Canberra. "Ted Baillieu needs to be involved.

He's constantly out there with [Manufacturing minister] Richard Dalla Riva in the media saying he supports local manufacturing. Well, what support are they giving here?"

The state opposition’s spokesman on manufacturing, Adem Somyurek, said the Baillieu Government had previously been ‘‘dragged kicking and screaming’’ to support the Victorian automotive industry, and could no longer sit back and watch as people lost their jobs.

‘‘The Baillieu government must start supporting the automotive manufacturing sector in Victoria and the thousands of workers it employs,’’ he said.

Unions, car companies and the state and federal governments have been contacted for comment.

[SB076]

They haven't gone under they have stood down workers and closed doors. They want to met with Govco and their customers

[Nikked]

Misleading thread title is misleading.

[SB076]

Originally Posted by Nikked

Misleading thread title is misleading.

Not entirely its not a good situation and I am sure those that made the decision haven't made it lightly - there are repercussions, but I suggest the company involved is desperate to start communication. Will have to see how it pans out.

[Fiesta_Man69]

Closing a plant indefinitely isn't good news, for anyone, irrespective of how you want to look at it.

[Jim Goose]

High costs

Autodom CEO Calvin Stead said in the statement times were tough for the industry.

"Our company is constrained by high fixed costs that cannot easily be aligned to the pace of the current volume reduction in the local car manufacturing sector," he said.

"We need time and assistance to reorganise ourselves and structurally change the direction in which we are headed.

What's even more alarming is that there will be a ripple effect right throughout the car manufacturing industry in terms of Toyota, Ford, Holden, so there is quite a widespread effect that will ripple through the automotive components and motor vehicle industry
Wayne Hanson

"We have made excellent progress in this regard."

Mr Stead said the car industry in Australia had more than halved its production in less than four years.

"Unfortunately we have no choice but to make this very difficult decision whilst we work together with all stakeholders in the hope that a solution can be found," he said.

"We trust that the car companies and stakeholders will see the benefits of the restructure plan put forward and how their support will allow the company to develop a more robust and sustainable business."

The company's website says aiAutomotive supplies metal pressings, sub-assemblies and painting and parts coating for customers including Holden, Toyota and Ford.

Autodom said it had export customers in the United States, China, Brazil and the Middle East.

Holden said it was disappointed and was assessing the likely impact, with a hope of minimising any effects on its production.

South Australian Premier Jay Weatherill said his Government was working with aiAutomotive to ensure it had a future.

"There's been significant Government funding that has been provided, there's been significant concessions that have been given to the company in terms of repaying loans that they may have to Government, all in a bid to ensure that they continue to be a successful company," he said.

Deputy SA Opposition Leader Steven Marshall said he was worried for the future of car production.

"The automotive supply chain in South Australia has approximately one week's stock in the pipeline. Once this is exhausted, this closure has the potential to affect production across the supply chain, including Holden," he said.

"This issue highlights the problem with the Labor Government's package to Holden. The $275 million deal did not include support for the wider automotive supply chain."

http://www.abc.net.au/news/2012-11-0...0-jobs/4345702

[Road_Warrior]

Originally Posted by SB076

Not entirely its not a good situation and I am sure those that made the decision haven't made it lightly - there are repercussions, but I suggest the company involved is desperate to start communication. Will have to see how it pans out.

Yes but the supplier clearly has not "gone under", it needs to enter a restructing phase and is requesting industry and government assistance to do it. It realises there is a problem with its operations and is taking steps to make changes. As you say its not a good situation, but its still not as bad as being put into administration, or even liquidation.

But Nikked is correct, the thread title is misleading, unsurprisingly.

[Sinead Phipps]

Here is our statement on the actions taken by Autodom this morning:

We are disappointed by the actions Autodom have taken this morning. Ford has provided significant assistance to Autodom in recent times, including increased piece prices and improved payment terms, as well as providing support in their efforts to diversify their business. We are currently assessing the likely impact on our production if this situation continues.

[BroadyFord]

^^ Thanks Sinead, this is obviously a concern.

History repeating itself by the looks of things...

Collapse of car supplier Autodom could grind industry to a halt


http://www.heraldsun.com.au/news/col...-1226508318823

AUSTRALIA'S three local car makers Ford, Holden and Toyota could grind to a halt as early as next week because of the collapse of a major parts supplier this morning.

Autodom, which makes body panels, hinges and other metal parts at three factories - in the Adelaide suburb of Woodville and the outer Melbourne suburbs of Dandenong and Gisborne - shuttered its factories this morning and put 400 people out of work after claiming it didn't get enough financial support from car makers.

A statement from Autodom said its closure followed ''a failure, after several months of negotiations, to come to an agreement with (local car manufacturers)''.

It is the most far-reaching automotive supplier shutdown to date, given that it affects the ability of all three brands to make vehicles.

Previous supplier shutdowns have usually affected only one brand - or there have been enough parts to carry them through a transition.

Holden spokesman Craig Cheetham says it has sufficient stock to last ''until some point next week''.

''If there are no further developments then we will (grind to a halt),'' he told news.com.au.

''Autodom supplies parts for all General Motors Holden vehicles made in Australia.''

Ford Australia spokeswoman Sinead Phipps says the company has enough parts for the next two days and has two scheduled rostered days off next Monday and Tuesday.

''What happens after Wednesday is yet to be determined,'' she told news.com.au, conceding the Ford factory could be forced to shut down temporarily until it finds a replacement supplier.

Two of the three car makers claim they were aware of Autodom's imminent collapse, but one brand claims it was left in the dark and only found out this morning.

The car makers are also furious that Autodom is closing down despite recent offers of financial assistance.

Toyota, Holden and Ford all claimed to have offered financial assistance to Autodom in the form of paying more for parts and/or improving their terms of payment - and helping the company reorganise its business.

''[Autodom's closure] is extremely disappointing and unfortunate but it is their decision,'' says Phipps.

Toyota, the largest producer of vehicles in Australia, and which takes 260 parts from Autodim, says it has enough components to keep the factory running ''in the short term'' - but admits it is working feverishly to find replacement suppliers in Australia and overseas.

Toyota is the least exposed of the three local car makers because it makes an identical Camry in six other factories around the world, and could source missing parts from suppliers in Thailand and Japan or beyond.

One industry source, who wished to remain anonymous, said Autodom’s precarious situation ''wasn’t properly conveyed to us''.

Late this morning there was speculation among the car makers that the Autodom statement was merely a ruthless ambit claim to get more financial support.

''This could still go either way,'' the source said.

''But if they're trying to get money, this is not the way to do it.''

Autodom chief executive officer Calvin Stead was yet to return our calls as this article was published.

[dimka100]

Why does this have an extortion smell all over it? I don't really think the public will react positively to a business claiming to drag others down with it due to it's own failures.

[Buntz]

Businesses all over Australia are finding times tough.

[stang65]

Thread title should be changed as they supply components to other manufacturers as well maybe change to Australian auto supplier in trouble.

[BroadyFord]

Don't forget this is the same company whose worker's recently won 104 weeks redundancy pay - after picketing the Dandenong site.

Unions strike again!

[Nikked]

Originally Posted by stang65

Thread title should be changed as they supply components to other manufacturers as well maybe change to Australian auto supplier in trouble.

My point exactly!

[TheSneakiness]

Got nothing else better to do than trash Ford at every little inane opportunity?

[Franco Cozzo]

No good, the place in New Gisborne is local to me and one of my friends works (or worked, now) there.

Originally Posted by BroadyFord

Don't forget this is the same company whose worker's recently won 104 weeks redundancy pay - after picketing the Dandenong site.

Unions strike again!

Yeah, because management never make any fatal mistakes when it comes to running the business, right? Its not all the union's fault, sure I guess making the company pay out more to its staff wouldn't have helped the situation but it wasn't their fault it went under.

[svo supporter]

The company has closed temporarily due to financial difficulties....It's not gone for good, unlike what has been written in the title thread (as NIKKED initally said)

They supply parts for Toyota, Ford, Holden and Mitsubishi (I think that's what was said on the radio)..

They are in negotiations to see what solution can come about in keeping their doors open to keep the supply up.

Holden have enough supplies to keep them going until sometime next week....Nothing was mentioned about the other companies...Perhaps other members can shed light in this area.

Hopefully some workable soultion can come up to keep some Aussies employed....

[bobthebilda]

This company was discussed (in FF) just a few months ago (posting below). What would be a crying shame for alot of the workers is that government money was given to this company (who has for many years been close to death), to buy up other companies, thus affecting the entitlements of a much larger pool of workers. Last time I checked the SA government was owed approx $8 million by this company.

31-08-12 , 08:58 PM # 47
bobthebilda
Posts: 838 Re: Supplier dispute threatening Ford and Holden production
---
Interesting to note that the company in question (its controlling company anyhow- Autodom) has just released its latest profit results. It had sales of approx. $90 million to the various car manufacturers, but suffered a $4 million dollar loss for the year. The results show it has nett assets of 700 thousand dollars, but strangely had minus $52,000 in cash. The accounts dont show a pretty picture that this company is a going concern, and we may be looking at further issues in the near future for the car manufacturers.

[Buntz]

Originally Posted by Sinead Phipps

Here is our statement on the actions taken by Autodom this morning:

We are disappointed by the actions Autodom have taken this morning. Ford has provided significant assistance to Autodom in recent times, including increased piece prices and improved payment terms, as well as providing support in their efforts to diversify their business. We are currently assessing the likely impact on our production if this situation continues.

Sounds like they are beyond help Sinead.

[Joe5619]

Hopefully they find a solution quickly

[Geez Louise]

I read this today and can not for the life of me understand why this company is closing it's doors.

All 3 - Ford, Holden and Toyota have been in talks with the company and sounds like this company wanted more than what was on offer. What more could the car companies do?

Something just doesn't sound right to me. Why not take a bail out package when it has been offered?? or have I read it wrong?

Cheers
Col

[Road_Warrior]

Originally Posted by Rapid_Axe

Got nothing else better to do than trash Ford at every little inane opportunity?

Ignore the troll, he only turns up here to post about how Ford is dead/dying/going to die/should be dying/yippee Ford is dying

Originally Posted by Geez Louise

I read this today and can not for the life of me understand why this company is closing it's doors.

All 3 - Ford, Holden and Toyota have been in talks with the company and sounds like this company wanted more than what was on offer. What more could the car companies do?

Something just doesn't sound right to me. Why not take a bail out package when it has been offered?? or have I read it wrong?

Cheers
Col

GoAuto have quoted both Ford and Holden now and both have "expressed disappointment" in the actions and statements made by this company today and yesterday. There is more to this than meets the eye and I think the management of this company is taking the ****.

[xtremerus]

When you screw a supplier down to the lowest unit price possible, any down turn in sales/production means the supplier will go belly up.
The very fine line between operating and closing down.

[robbo/region15]

I spent 15 out of 30 years working @ New Gisborne.Since 2008 it changed hands 3 times,had 4 manufacturing managers,etc etc etc.Key people left -but were never replaced,you have a culture there of people waiting for a pay out,but then a few of them would struggle to find work,age related,distance to willingly travel.
Bear in mind each ai dair site,whether Gisborne,Dandenong, or Woodville are independant of each other.If one was to close ,doesnt mean they all would.Interesting times,as Gisborne has only Auto products to produce.....I will watch from the UK ,with interest.

[bobthebilda]

Administrators appointed.

http://www.news.com.au/breaking-news...-1226510183313

STRICKEN car parts company Autodom, which supplies components to Australia's major carmakers, has appointed an administrator to see if it has a future.
Autodom, which shut its doors last Thursday, issued a statement on Sunday saying that Macks Advisory will be taking over the running of the group, which is made up of seven companies based in Victoria and South Australia.
Peter Macks said the administrators are now working through the financial positions of the group and will talk with key players in the car industry, secured creditors, union representatives and government to assess available options.
"As voluntary administrators, we have taken control of the assets of the companies and begun the task of assessing the positions of each company," Mr Macks said.
More than 400 Autodom workers in Victoria and South Australia have been stood down.
The risk now is that Holden and Ford will run out of parts by the middle of this week, with Toyota saying it could last until Christmas.
Earlier this year, Holden received a $275 million federal and state government assistance package to develop two new cars in Australia to ensure the future of its local manufacturing operations to at least 2022.

.

[Yellow_Festiva]

When I was waking up to the 6:30 news on the radio I heard there are another 6 or 7 parts suppliers heading towards the same fate.

I really hope this isn't the case, and if it is I hope Ford has a backup plan to source those parts elsewhere.

Just heard the news again. "Autodom is 1 of 7". Don't know if that means 7 separate companies or Autodom has 7 associated subsidiaries.

[Jason[98.EL]]

Originally Posted by Yellow_Festiva

When I was waking up to the 6:30 news on the radio I heard there are another 6 or 7 parts suppliers heading towards the same fate.

I really hope this isn't the case, and if it is I hope Ford has a backup plan to source those parts elsewhere.

I believe that they are all part of the Autodom group which have been placed in administration so could very well be 6 or 7 go the way of the dodo

I wonder if the 3 manufacturers have a plan to source the parts from somewhere else I really hope so

not good for all those that work there

Jason

[Chippa666]

This is bad enough to now reduce Fords producing by a 1/3, reduce Kenworths production by more than half and as a result bring in redundancies where I work as we supply Ford and Kenworth with parts.
It filters down to every other business that supplies the manufacturers, hurting them and resulting in job losses and eventually shut downs. I don't hold out much hope for the company I work for now. I know its been in trouble for a while with everything that's been happening lately and this is going to hurt us even more. Once Ford stops production of the Falcon the company I work for will probably go too, even though we supply to other manufacturers, there just won't be enough work and profit left to keep the company going here in Australia!
Ford Won't find any other manufacturers for these parts as the ones that are left can't build what Ford need for the price they want to pay. That is one of the main reasons why alot of the manufacturers are shutting down. When a contract is signed with Ford, the first year you need to supply X amount of stock at X price. But every year after that the cost of the product needs to drop by a certain percentage ( even if the cost of materials goes up). So by the end alot of manufacturers are making a product at cost or below due to the constant rise of materials. Yet to get the contract in the first place you need to undercut everyone else and hope that materials with drop in cost.
With Ford sales dropping with the falcon, they can't afford to sign new contracts at a higher price, and with production being reduced several times already, we might see the end of the falcon sooner than we thought. It's sad, but that's the way of the world.
I think the manufacturing industry in Australia is just about dead.

[mr smith]

Falcon wont make '16. The viscious circle is speeding up, manufacturers and suppliers go under, more job losses, less confidence, less sales, more cuts, more go under.
Koshie showed a graph this morning that showed mining and finance are now our two biggest economic drivers, we are in trouble as these are two industries that can and do go pop real fast.

[mac_man_luke]

Originally Posted by mr smith

Falcon wont make '16. The viscious circle is speeding up, manufacturers and suppliers go under, more job losses, less confidence, less sales, more cuts, more go under.
Koshie showed a graph this morning that showed mining and finance are now our two biggest economic drivers, we are in trouble as these are two industries that can and do go pop real fast.

Why would they bother with a new falcon in '14 if it was not going to make at least 16' - you would think they would plan to run a model for at least 4+ years