Ford Australia to Temporarily Close Plants as Key Supplier Goes Into Receivership

Ford Australia is closing two production plants in the state of Victoria for about a week after administrators are appointed for parts-maker CMI Industrial.

The shutdown comes just as the auto maker is launching its new 4-cyl. Falcon sedan. CMI’s problems leave missing key parts for the Falcon pickup and Territory SUV as well.

Insolvency-specialists McGrathNicol says in a statement it was named as receiver and manager by a secured creditor after CMI Industrial was placed into voluntary administration by its director.

CMI Industrial makes seatbelt restraints, airbags, brake-pad backing plates, suspension components, intake and exhaust manifolds and door- and trunk-hinged parts.

The Australian company operates a distribution center in Columbia, SC, supplying brake components to U.S. auto makers including Ford and General Motors through Tier 1 suppliers.

The Age newspaper in Melbourne says Ford will not resume production until at least next Wednesday. About 1,800 workers at Ford’s Geelong engine facility and Broadmeadows vehicle plant are affected.

Workers will stand down Friday and again on Tuesday of next week, with a rostered day off scheduled for Monday.

Ford tells reporters it likely will take CMI administrators several days to stabilize the business and resume production, and it will take 24 hours after that before parts are available.

Workers at the parts plant have been locked out for four days after the owner of the building changed the locks when CMI failed to pay its full rent since December.

CMI’s Australian Mfg. Workers Union shop steward Keith Thomas tells the newspaper some workers at the factory have been on a 4-day workweek for the past three years because of money shortages at the company.

AMWU spokesman Leigh Diehm says CMI Industrial has a solid financial future once it works through its money problems.

Keith Crawford of McGrathNicol says the receivers will be in close contact with employees and unions, customers and suppliers to ensure minimal disruption to operations.

“Our objective is to work constructively with CMI Industrial’s key stakeholders over coming days to stabilize operations in order to facilitate a thorough assessment of each business unit’s financial position and prospects and to prepare viable business units for sale,” Crawford says in the statement.