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CMI workers go – but not at Ford site

Payout peril: Laying off workers so early in the administration process has raised fears that sacked CMI workers may not receive timely payouts.

Planned layoffs at Ford supplier CMI’s Campbellfield site on hold as orders increase

Ford logo2 May 2012

UPDATED: 08/05/2012 THE receiver of stricken Ford component supplier CMI Industrial, the collapse of which resulted in Ford temporarily halting Falcon and Territory production late last month, announced the lay-off of 44 workers last week.

None of the redundancies took place at CMI’s Campbellfield site that supplies Ford.

The Australian Manufacturing Workers Union (AMWU) told GoAuto that plans to sack 10 employees there have been put on hold due to increased orders.

Ford-appointed receivers McGrathNicol said the redundancies were made at CMI’s Ballarat site, which makes metal clips and fasteners, and its West Footscray metal forging facility.

McGrathNicol’s decision to lay off workers during the administration period, before the company is liquidated, has proved controversial as it can delay Government Employee Entitlements and Redundancy Scheme (GEERS) payments to workers.

At worst, the move could render sacked employees ineligible for the payments if CMI is not eventually liquidated.

A creditors meeting was held this morning, with AMWU representatives and members of CMI staff among the attendees.

Matt Byrnes from administrator Grant Thornton told the ABC that CMI is expected to go into liquidation around May 30 and that a more detailed report will go to creditors in coming weeks.

McGrathNicol receiver Keith Crawford said sacked workers “will be able to make claims through GEERS, if and when the company is put into liquidation”.

AMWU assistant state secretary Leigh Deihm said the union has called on minister for employment and workplace relations Bill Shorten to release the GEERS payments early due to the unusual circumstances as the process could otherwise take up to six months, with potentially serious implications for sacked workers.

“These employees don’t have big bank accounts and obviously cannot afford to be in work one day and out of work the next with no money going along with them,” Mr Deihm told GoAuto.

A spokesman for Mr Shorten said the minister has been in contact with CMI and his office “definitely has been working to bring forward the GEERS payments”.

However, a question remains over what happens to the sacked workers if CMI is not liquidated, which would result in them being ineligible for GEERS.

GoAuto understands the affected workers have received no other form of redundancy payout.

CMI’s slip into receivership happened after the landlord of its Campbellfield site changed the locks over unpaid rent, leaving workers unable to enter for a week while negotiations to release the keys took place.

Ford, which relies on CMI for components needed to build the Falcon and Territory, ran out of parts last Thursday night, forcing it to stop production on Friday and Tuesday, with 1800 workers temporarily stood down and potential knock-on effects for other suppliers who also had to pause or slow production at short notice.

Mr Deihm said the union usually calls on the administrators to put companies into liquidation as soon as practically possible in order to enact the GEERS payment.

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