GM Holden, Ford Bail Out Key Australian Parts Supplier

Australia’s struggling auto industry dodges another bullet, as GM Holden and Ford pay to reopen parts-maker Autodom and keep local production moving.

The two U.S. subsidiaries, along with Toyota, get parts from Autodom. The supplier announced last week it was closing its factories after failing to win a price increase for its parts.

Autodom said several months of negotiations failed to gain an agreement with key automotive customers that would make the supplier sustainable and allow it to diversify into new markets.

About 400 Autodom workers will return to work at the company’s three plants, with  Reuters reporting Ford and GM Holden have agreed to underwrite the supplier’s A$6.5 million ($6.8 million) debt.

The agency says neither Ford nor GM Holden are to become owners of Autodom, Australia's largest press-metal manufacturer and supplier of complex metal and plastic components including rear-bumper assemblies, brakes, clutch mechanisms, hood hinges, parking brakes and jacks.

Both Ford and GM Holden say the shutdown did not disrupt their production schedules. But GM Holden says it is nevertheless pleased the Autodom situation is moving toward resolution.

“Holden's involvement in the process recognizes the importance of the domestic supply chain to the automotive sector, and the multiplier effect on employment that an Australian auto industry has on the broader economy,” the auto maker says in a statement.

“We can now move forward and work with the receivers to ensure minimal disruption to our workforce and our manufacturing operations while a more secure future for the Autodom companies is established.”

Mack Advisory took the supplier into voluntary administration, and it then was placed into receivership with McGrathNicol.

The Agenewspaper reports talks involving the administrators, Autodom, the auto makers and banks brokered the deal to get the plants reopened.

The Australian Manufacturing Workers Union accused the Victoria state government of playing politics over the Autodom crisis after Manufacturing Minister Richard Dalla-Riva issued a news release blaming unions for hurting the automotive sector.

AMWU Victorian branch Assistant State Secretary Leigh Diehm says the government should be showing leadership, but instead opted to play the blame game. “The AMWU have repeatedly said that now is not the time to be pointing fingers,” he says in a statement.

The union says it wants the state government to start putting their efforts toward protecting the broader manufacturing industry. “Despite its…repeated commitment to local manufacturing, we are yet to see a plan,” Diehm says.

He tells reporters Autodom workers have been told they will get full pay for last week, despite being laid off during the shutdown.