* Autodom in restructuring talks with key stakeholders
* Sept vehicle sales gains fail to offset production cuts
* Gov monitoring situation, but says it's a commercial issue
By Rob Taylor
CANBERRA, Nov 2 The closure of Australia's
Autodom Ltd, a top Australian auto parts supplier,
could shut down production at local units of Ford and General
Motors by next week and executives are working frantically to
save the company.
Autodom, a $2.1 million supplier of parts to local units of
Ford, Toyota and the General Motors Holden unit
of GM, has indefinitely closed its plants in two
Australian cities amid a halving of car production in the wake
of the global financial slowdown.
Australia's automotive industry, based mainly in southern
Victoria and South Australia states, is a major contributor to
Australia's manufacturing base with three manufacturers
exporting $3.3 billion worth of vehicles a year with the aid of
around 160 component makers.
But despite hefty government subsidies and tariff support
worth around A$2.5 billion ($2.60 billion) a year, the industry
has struggled to maintain manufacturing jobs, with the
Australian arm of Japan's Mitsubishi Motors Corp
closing its car plants in 2008.
The Australian dollar has also traded at record highs
above parity with the U.S. dollar over the past year, putting a
strain on manufacturing exports.
Autodom chief executive Calvin Stead said his company, which
employs around 400 people, had been hard hit by high local
production and labour costs and manufacturing lines that could
not be quickly scaled back.
"We need time and assistance to reorganise ourselves," Stead
said in a statement, adding he was disappointed by the lack of
support for his company from key players in the industry.
A shutdown of the company's operations was expected to halt
production at Ford and GM Holden as soon as next week.
Autodom, which supplies complex metal and plastic components to
carmakers, is Australia's largest press metal manufacturer.
Ford, which buys hundreds of components from Autodom for its
locally-built "Falcon" sedan and "Territory" SUV vehicles, was
likely to be most affected by the shutdown.
"We are currently assessing what effect it will have on our
production," Ford Australia spokeswoman Sinead Phipps told local
media. "We are okay until the middle of next week, but if it's
not resolved it could potentially affect our production then."
A spokesman for Australia's Industry Minister Greg Combet
said Autodom was negotiating a restructuring proposal with its
key automotive stakeholders that could see the plants reopen.
"The government is monitoring the situation and is liaising
with the motor vehicle producers. However this is a commercial
issue between Autodom and its stakeholders," he said.
GM Holden said the closure could also halt production of
large "Commodore" sedans and smaller "Cruze" vehicles by next
week, with spokesman Craig Cheetham telling caradvice.com.au
that Autodom produced "critical components".
GM Holden, a division of U.S. manufacturer General Motors,
in February cut 140 jobs from its Adelaide car plant as part of
a scaling back of jobs, a week after Toyota cut 350 jobs at its
Sales of new motor vehicles in Australia surged by the most
in 14 months in September to reach an all-time high, a sign
consumers have more confidence to splash out on big-ticket items
even while being cost-conscious on retail spending.
New vehicle sales rose by a seasonally adjusted 4.7 percent
in September to 98,701, following an upwardly revised 4.3
percent rise in August. Sales were up a hefty 14.4 percent
compared to September last year.