Vital car parts maker in trouble

[benoxr]

Car industry anxiously awaits ACL's fate
26/08/2009 5:52:35 PM
Australia's car industry faces an anxious wait to see if a vital car parts maker survives being placed under administration.
The likes of Ford and Toyota rely on a constant supply of engine bearings and gaskets from Tasmania's Automotive Components Limited (ACL) to maintain production.
Federal Industry Minister Kim Carr says the fate of ACL will affect the capacity of the Australian car industry and tens of thousands of jobs.
"This is an issue of national importance," he told ABC radio.
ACL creditor Ford called the receivers in on ACL less than two months after the federal government announced a $7 million ACL bailout.
About $5 million of the funds was banked by the company before the receivers arrived on Wednesday.
Senator Carr says he is awaiting a briefing from the receivers to find out what happened to the $5 million.
He said the government acted at the time to stabilise not just ACL but the Australian car industry as a whole at a very uncertain economic time.
"Doing nothing was not an option given the strategic importance of ACL to the broader industry," Senator Carr said.
Tasmania Treasurer Michael Aird said the $5 million had been spent retiring debt to GE Finance just so ACL could get to administration.
Despite the handout, millions of dollars of entitlements for ACL's 320 workers in Launceston and Brisbane remain unsecured, Mr Aird said.
Tasmania withdrew a $4 million loan offer to ACL in June after its directors refused to personally guarantee to pay it back.
Federal Chamber of Automotive Industries chief executive Andrew McKellar said components supplied by ACL were crucial to the industry.
"The jobs of thousands of automotive workers will be secured by ensuring that supplies from ACL are not interrupted," he said in a statement.
Greg Keith and Matt Byrnes of Grant Thornton Melbourne have been appointed receivers and managers of ACL and will try to sell it as a going concern.
They say it will be business as usual for ACL for about a month during their discovery process.
ACL is a critical parts supplier to the Australian car industry and there is a danger that production at Ford and Toyota will be affected if supply is interrupted.