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Harley buys Castalloy

Back in motion: Castalloy supplies Harley-Davidson's wheels and hubs.

Harley-Davidson emerges to rescue Ion's troubled Castalloy plant in South Australia

General News logo30 Aug 2006

By NEIL MCDONALD

HARLEY-Davidson Inc has agreed to buy the majority of the assets of its Australian supplier of cast motorcycle wheels and hubs, Castalloy.

The Milwaukee motorcycle manufacturer said it planned to establish an entity called New Castalloy as a wholly-owned manufacturing operation, which is expected to employ about 300 people at the North Plympton, Adelaide site.

The deal should be finalised by the end of next month. Harley-Davidson named Donald Gogan managing director of New Castalloy.

Castalloy was a money-spinner when it became the foundation for the Ion casting and transmission group in 2000, but was losing $20 million a year by late 2004.

The Ion plant at suburban North Plympton has been in the hands of administrators since the group got into financial difficulties in December 2004.

Since then 400 jobs have been lost with the closure of an Ion plant at Wingfield in Adelaide while another 200 jobs were axed at the company's Albury plant in NSW.

The deal will make Castalloy part of one of the world's most highly valued automotive groups.

When Castalloy went into administration, Harley started searching the world for an alternative supplier, but came up empty.

The price for the takeover has not been revealed.

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