Darn, we're outta that! Ford of Australia halts work due to supply problem
Ford's Broadmeadows facility has run out of at least one key component for V8 engines, and will have to shut down until its supplier resolves labor issues. The supplier, Coghlan and Russell Engineering, owes employees a boatload of money - in the order of 1.5 million-plus Austrailian dollars. Because of the outstanding payments, workers are holding out until they get the funds they're due, including pension and unemployment stipends. Ford and Delphi had offered to float Coghlan and Russell for a couple of months, but the workers rejected that proposal because the two companies would not cover pensions and unemployment obligations, citing the precedent it would set. The two-month loan would have given C&R time to examine a plan for getting out of trouble, as well as giving the automakers time to explore alternate suppliers. Since an agreement could not be achieved, Ford and possibly GM production will be impacted. Both Holden and Ford have not been having an easy time of it in Australia lately. As hot as we are for their cars -- the boot-stomping Falcon and hotly anticipated Zeta platform -- both Holden and Ford have had to lay off workers. Coghlan and Russell is not the only supplier in dire straits, either. A fastener supplier threatened to shut Holden and Ford production down back in August by going bankrupt. Brake supplier PBR stepped in at the last minute and has been propping up that company, keeping production lines moving. If there's not enough parts now, we can only imagine the clamor that would ensue should supply fail just as US sales of the Oz-developed platforms gets underway.
Thanks for the tip, Simon
[Source: GoAuto]
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Reader Comments (Page 1 of 1)
F451 11:25AM (4/19/2007)
As Bill Ford said, " I had no plan B."
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P to the C 11:32AM (4/19/2007)
It's good to see that draining suppliers dry is not a US only phenomenon.
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Don 4:35PM (4/19/2007)
They must have some serious problems if they can't cough up a paltry $1.5 million in compensation.
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naggs 6:38PM (4/19/2007)
this is what happens when you squeeze your suppliers into the margins. you dont see toyota with these kinds of problems because they have good long term relationships with their suppliers.
i suppose everything is easier when your running in the black...
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jeff 7:32PM (4/19/2007)
The problem is largely because of spiraling fuel prices here (up to $1.50AU per litre from 90c a year ago), which has caused a massive downshift in the large car market. Ford and Holden can reduce production and layoff workers because they have larger margins but the small suppliers are squeezed so tight that when orders are reduced, they are not equipped with enough cash to cover the situation. It's already happened here at least twice, and will probably continue as long as more people buy corollas and mazda 3s instead of falcons and commodores
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Kenn 11:48PM (4/19/2007)
The fact is Toyota Australia builds more cars in Australia than both Holden & Ford. Still Toyota don’t seem to have these supplier problems. I think Toyota Aurion might over take the Ford Falcon pretty soon. Toyota is discounting the base model Aurion by upto $4000.00.
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Barney 12:52AM (4/20/2007)
I can relate to what Jeff posted in the 5th comment. Canada is facing the same increases and about par with Australian price per litre. Pickups are disappearing from streets and showing up in driveways. Holidays will be spent at home by more people and small cars are already the norm.
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Hamud 7:07AM (4/20/2007)
Fanboys are really a joke around here, a Ford Supplier shows some signs of problems and there they come to pick on Ford's fault...
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