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New threat to Commodore

VE online: Ajax supplies many fasteners for Holden's new Commodore.

Major vehicle parts supplier goes bust, leaving Ford and Holden production in doubt

Holden logo30 Nov 2006

By NEIL MCDONALD

FORD and Holden's end-of-year sales race for its large cars is looking increasingly in doubt as a supplier dispute threatens production.

Both are now actively seeking an alternative supplier – in Australia or overseas – to replace Ajax Engineered Fasteners in Braeside, Melbourne, which closed its doors earlier this week and is now in receivership.

As GoAutoNews closed for publication, the dispute between workers staging a sit-in at the factory and the company and receivers KordaMentha was entering its third day.

Ford Australia spokesperson Sinead McAlary said Ford had been "looking at other options", which included sourcing components from another Australian supplier or obtaining the components overseas.

GM Holden spokesman Jason Laird said it was also seeking alternative suppliers, and was hopeful of finding a local supplier in preference to one from overseas, which could be more expensive for the company.

"We've been forced into this position and we're looking at the situation now," he said. "Where possible we will be sourcing locally."Although Ford did not envisage any production slowdown or halt while the dispute is sorted, Holden was less confident.

"We will be moving heaven and earth to ensure there is no downtime," Mr Laird said.

Holden has been working to resolve the issue with Ajax for the past 18 months.

"We're paying well above the odds for the parts and providing them with extra money to continue trading and keep their doors open," Mr Laird said.

"We didn't quite make half-way, through no fault of ours."Both the Ford and Holden internal customer groups are clearly at the end of their tether over the on-going issues with Ajax, one of the latest smaller components suppliers to come under the spotlight locally.

"The administrator has asked for another $5 million just to deliver the parts they've already committed to delivering," Ms McAlary said. "It's a demand we can't and shouldn't meet either for the sake of our own business and the precedence it sets."Back in August, both car companies had delved deep in a multi-million-dollar bailout of the company but specific details were never revealed.

Ms McAlary said Ford had been committed to remain with Ajax until March next year "and we had no plans to change that but the appointment of a receiver has changed that for us".

Earlier this week, 189 Ajax workers were stood down and subsequently staged a sit-in at the factory to secure their entitlements as receivers moved in to liquidate the company's assets to pay out $4.5 million to Allen Capital, the company's owners.

Ajax supplies various nuts and bolts to Ford and Holden for use in their engine, driveline, vehicle assembly and brake systems. Apart from the 121 components for various Holdens, it also supplies a crucial bolt for Holden's Family II export engines.

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