Australian Car Industry Crisis
August 21, 2006 by Alborz Fallah
The likes of Holden, Ford, Toyota and even Mitsubishi may be forced to stand down thousands of workers in the next few days as talks fail over Ajax rescue bid. Ford Australia employs around 4,000 workers in Victoria said today that it might be forced to stand down its workers once componets form Ajax run out.
Holden, based at Elizabeth in South Australia and Port Melbourne in Victoria, admitted that it only has enough supply to last only until the end of the week and afterwards nearly 5,000 staff might be asked to take a holiday while talks continue over Ajax’s future.
Ajax, based in Melbourne’s south-east, is currently under administration and car companies have been in talks since last week to try to keep the component maker in business with a $2 million rescue package. The embattled company is a division of Global Engineered Fasteners (GEF) and makes the specialised nuts and bolts supplied to car makers on the so-called just-in-time system.
The whole idea is that car suppliers don’t keep stock of these parts as they are always readily available. However things are not looking too great with constant supply problems in the last few weeks.
“We are still OK until the close of business on Wednesday,” Ford spokeswoman Sinead McAlary said today. “After Wednesday we will need to look at standing down our workforce at Broadmeadows and Geelong.”
Some 200 Ajax staff have so far been working as of Friday without any pay but as of today the staff gave up as talks failed. The factories furnaces have been set to shut down, with a 1 week turn over to shut down and start up.
“It’s frustrating that we still haven’t reached a resolution,” Holden Spokesman said.
It seems like the only way Ajax will keep on operating is if car companies are willing to pay more for parts. Victorian secretary of the Australian Workers’ Union, Cesar Melhem, said
“It is like someone who needs a lifesaving device. If you need it, you don’t ask how much it is,” Mr Melhem said.
Prime Minister John Howard said that the government is willing to wait it out and see if the car companies will foot the bill before any intervention from the tax payers.
“The first thing to do is to let the industry see what it can do,” Mr Howard said.
All in all the future of car manufacturers in Australia is not looking very bright. Once Ajax supplies stop, many new car models will be hit with delays. Holden’s new VE Commodore which has only just gone on sale will be in short demand as fleet buyers who had toughed it out waiting in the last 2 months might have to wait even longer.
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