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Australian parts-maker ACL to close

What's next?: Australia's only transmission plant, Drivetrain Systems International, is looking at an empty order book when its only current contract expires in October 2014.

Local parts-maker ACL closes in 2014, and DSI transmissions seeks new contracts

General News logo2 Aug 2013

By IAN PORTER

TWO more Australian-based components-makers are facing closure amidst the continued struggle of Australia’s car industry and industrial base.

In Tasmania, the country’s only manufacturer of engine bearings, ACL Bearing company (in receivership), has finally lost its long battle for survival, with receivers Grant Thornton announcing the plant would be closed in June 2014.

And in Albury, the country’s only transmission plant, Drivetrain Systems International, is also looking at an empty order book when its only current contract expires in October 2014.

Both companies rely heavily on exports, but disadvantageous exchange rates due to the high Australian dollar over the past three years have bitten deep.

On June 30, ACL’s receiver, Matt Byrnes of Grant Thornton, told the 136 staff that ACL would cease manufacture in June 2014. ACL has been in receivership since 2009.

Grant Thornton had put the whole company up for sale earlier this year and Mr Byrnes said it had attracted “strong interest” from overseas.

However, no offers were received for the business as a going concern.

“We will now negotiate with the parties in relation to he assets only and we can do that in the wind-down phase,” he told The Examiner in Launceston.

He said he believed the reluctance to bid for the company was due to the company’s location in Tasmania and the high Australian dollar.

There was also an issue with limited shipping services out of the state.

Mr Byrnes said ACL was not so much affected by the recent Ford decision to close its factories in 2016 or the general decline in large car sales, as around 80 per cent of its production was exported.

ACL was spun out of the failed Repco group in 1986 when senior managers bought ACL from the new owners of Repco.

Products included engine bearings, battery terminals, valve seat inserts, timing pulleys and sprockets, gaskets and a range of parts for water pumps, oil pumps and brake systems.

In June last year, ACL received a prestigious design excellence award from the Metal Powder Industries Federation in the US for a part it supplies to Futuris Automotive for use in steering columns.

The award was made for a powder metallurgy sinter-brazed spacer tube that has been used in the Ford Falcon’s steering assembly since 2008.

The component performs several roles, including providing positive steering column adjustment, supporting the tilt adjustment components and giving adequate energy absorption and impact resistance that complies with ADR requirements.

The outlook for Drivetrain Systems International is not so black and white, but the company’s only contract is set to expire in October next year.

The contract is with SsangYong and is for the supply of six-speed automatic transmissions for SsangYong’s Korando sport utility vehicle.

DSI became a subsidiary of the Zhejiang Geely group in 2009 and was, until then, one of a handful of independent transmission manufacturers in the world.

Geely also owns Volvo Cars, which it bought from Ford Motor Company in 2010.

DSI was available because its major customer, SsangYong, had itself run into financial trouble, causing a temporary halt in production at DSI, which led to it being placed in receivership.

The purchase by Geely was seen as a reprieve because Geely was preparing the Korando for market and it needed an automatic transmission for that model.

There are approximately 200 people working at the DSI plant. In its prime, there were 1250 people making transmissions for Ford, Holden and Nissan.

Union representative Sean Morgan told the Border Mail that workers were concerned about the apparent lack of work when the SsangYong contract expires.

“The company has put proposals to China to keep the current workforce with a few plans of what they want to try and do.

“If they are approved, they will keep the workers – if they don’t they won’t.

Past experience tells me we won’t hear anything from China for another four weeks.”

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