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Ion back in business
Rescue deal saves Ion's financially troubled transmission plant and R& D centre
5 Sep 2005
A CONSORTIUM of Japanese and Australian business interests will spend $48 million to buy out the struggling car-parts maker Ion Group Limited.
The international consortium will acquire Ion’s former transmission plant in Albury (NSW), and the company’s research and development centre in Springvale, Melbourne.
The deal, which is unrelated to the aborted engine block project in Altona that forced Holden to source components overseas, should be finalised in about six weeks.
The Albury plant employs about 750 employees and produces four-speed automatic transmissions for Ford Australia and SsangYong in South Korea.
The chairman of the consortium, Graham Halbish, said Powertrain Products International Pty Ltd (PPI) had signed a contract to acquire the manufacturing plant and the R&D centre.
"Current production is around 134,000 units a year and PPI plans to maintain this volume until the introduction of a new six-speed transmission in September 2006, when production is scheduled to increase to support contracts for the new transmission and expanded markets in Asia for the four-speed," said Mr Halbish.
"We see ongoing research and development as the key to the introduction of new PPI products, and the opportunity for the company to provide considerable flexibility in those future products." Administrators were appointed to the Melbourne-based Ion Group in December 2004 after bankers withdrew support for the company.
Ion had suffered crippling cost overruns and manufacturing delays and, when it went into administration, owed bankers $350 million and trade creditors $120 million.
It had 3000 employees in Australia, New Zealand and the United States.
The consortium represents interests from Australia and Japan.
PPI is predominately Australian-owned and comprises Japsco Ltd (Japan Asia-Pacific Project Support Co Ltd), Motor Trade Finances Australia Pty Ltd and other Melbourne-based investors.
The acquisition of the Albury plant is also supported by the global trading house Marubeni Corp of Japan.
The sale was announced by the administrator of IAS, Colin Nicol of administrators McGrathNicol and Partners.
Ion operations will continue to be managed by general manager Mike Turner and his executive team.
PPI has maintained contact with the NSW Government and the Australian Manufacturing Workers Union throughout negotiations leading up to the acquisition. Both support the acquisition.
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