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Holden and Ford unite to back Autodom

Business as usual: Holden’s Elizabeth plant is open today, and will have sufficient supply of Autodom parts to avoid production delays.

Receiver appointed for Autodom as Holden and Ford co-underwrite $6.5 million debt

General News logo6 Nov 2012

GM HOLDEN and Ford have put rivalry aside to take joint responsibility for the debts of stricken parts supplier Autodom in order to avoid substantial disruptions at their respective assembly lines in South Australia and Victoria.

The two car-makers will act as guarantors on the parts-maker’s debt of about $6.5 million and underwrite the company for an indefinite period as newly appointed receivers from McGrathNicol seek to restructure and organise the sale of the business.

GoAuto understands the company – which took over a number of smaller Australian parts-makers over the past six years – is likely to be broken up into separate operations.

Autodom stood down 400 workers and halted production at its aiAutomotive plant near Adelaide and Dair Industries operations near Melbourne last Thursday, citing the high fixed costs and volume reductions in the local manufacturing sector.

It was subsequently placed into voluntary administration on Saturday.

Holden director of external communications Craig Cheetham told GoAuto today that the company will primarily underwrite the aiAutomotive plant in Woodville from which it sources components such as bulkhead crossbeams and rear sub-assemblies.

Ford Australia is expected to take a similar role with Autodom’s Victorian operations that produce parts such as such as rear bumper assemblies, foot brakes, clutch mechanisms, hood hinges, parking brakes and car jacks.

Autodom this week secured funding from the National Australia Bank, and the Australian Workers Union told ABC News that workers at both the aiAutomotive plant in Woodville and Dair plants in Dandenong South and Gisborne will return to work first thing Wednesday morning.

Production resumed today at Holden’s Elizabeth plant near Adelaide – which builds the Commodore and assembles the Cruze – while workers at Ford’s assembly line in the outer-Melbourne suburb of Broadmeadows have been told to report for duty from Wednesday.

Both companies faced production delays if an immediate resolution could not be found, since many components are delivered on a ‘just-in-time’ basis.

Mr Cheetham said Holden decided to back the Woodville operations through the restructure because keeping the plant in business was crucial to maintaining production at Elizabeth.

“We don’t necessarily want to have long-term responsibility for aiAutomotive,” he said. “But to ensure supply of parts continues, that the supply chain is in reasonably good health and that we are able to keep the employees in work, we’ve taken the necessary steps to ensure continuity”.

He also said the collaboration between historic rivals GM Holden and Ford Australia was a sign that the two companies were able to put the greater good – the continued supply of parts for both – ahead of anything else.

“What it shows in that context is that, when the chips are down and we have to do something for the greater good of the industry, obviously it’s of mutual benefit to do so, and our purchasing, legal and finance teams all worked hand-in-glove to bring us to the conclusion that it’s reached.” Toyota Australia, which also uses Autodom components in the manufacture of the Camry and Aurion at its Altona plant near Melbourne, was at less risk of production delays as it had a greater stockpile of parts.

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