The Australian car industry

Australia: Car makers scramble for parts after supplier Autodom shuts down

AUSTRALIA'S three car makers were last night scrambling to find alternative suppliers to fill a hole caused by the collapse of a company that made critical body panels and other parts.

The Australian,

2 November, 2012

Holden, Ford and Toyota may be forced to halt production as early as next week after Autodom shut three factories yesterday, one which employs 160 people at Woodville.

Other Autodom factories are in the outer Melbourne suburbs of Dandenong and Gisborne.

In all, about 400 workers were sent home in the most far-reaching supplier shutdown in Australian automotive history.

The Advertiser understands the stand-off between the car makers and Autodom is unlikely to be resolved, which will lead to inevitable delays.

Holden spokesman Craig Cheetham says it has sufficient stock at its Elizabeth plant to last until next week.

"If there are no further developments then we will (grind to a halt)," he said.

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

"What happens after Wednesday is yet to be determined," she said.

Two of the three car makers claim they were aware of Autodom's imminent collapse, but one brand claims it only found out yesterday morning.

The car makers are furious that Autodom closed down while in the middle of sensitive negotiations. 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.

A division of Autodom, trading as aiAutomotive, also received $6 million from the South Australian Government last year, SA Industry Minister for Manufacturing Tom Koutsantonis said yesterday.

He said there would be no more financial assistance from the State Government but he was confident the business would survive.

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

Autodom's chief executive officer, Calvin Stead, said: "If we don't have a solution by close of business tomorrow (today) then the future of the business is in doubt."

Mr Stead said the Federal Government was likely to be hit with a bill of $10 million to guarantee the redundancy payments of the 400 Autodom workers.

He also estimated the shutdown would cost car makers a further $15 million in receivers payments and having to retool and appoint new suppliers.

A statement from the Federal Minister for Industry and Innovation, Greg Combet, said the Government was concerned for the future job security of the company's workforce.

Mr Stead said Autodom had consolidated seven different businesses at three locations to improve manufacturing efficiencies, but the company still needed more financial support.

Autodom told its workers it would have more information late this afternoon.

Australian Manufacturing Workers Union SA assistant state secretary Colin Feeney said Woodville workers were informed of the closure yesterday morning, and they were shocked and emotional at hearing the news.

He said workers had thought the business had been going well.

"The site here at Woodville was making a profit," he said.

Mr Feeney said Autodom's problems stemmed from its purchase of Victorian-based Dair. aiAutomotive worker Susie Clayton said the decision had shocked the workforce. "It popped up out of the blue," she said.