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Supplier collapse could grind industry to a halt

Only two of the three car makers claim they were aware of Autodom’s imminent collapse.

The stoppage could be sparked by the collapse of a major parts supplier this morning.

Autodom, which makes body panels, hinges and other metal parts at three factories – in the Adelaide suburb of Woodville and the outer Melbourne suburbs of Dandenong and Gisbon – shuttered its factories this morning and put 400 people out of work after claiming it didn’t get enough financial support from car makers.

A statement from Autodom said its closure followed “a failure, after several months of negotiations, to come to an agreement with [local car manufacturers]”. It is the most far-reaching automotive supplier shutdown to date, given that it affects the ability of all three brands to make vehicles.

Previous supplier shutdowns have usually affected only one brand – or there have been enough parts to carry them through a transition. Holden spokesman Craig Cheetham says it has sufficient stock to last “until some point next week”. “If there are no further developments then we will [grind to a halt],” he told News.com.au. “Autodom supplies parts for all General Motors Holden vehicles made in Australia.”

Ford Australia spokeswoman Sinead Phipps says the company has enough parts for the next two days and has two scheduled rostered days off next Monday and Tuesday. “What happens after Wednesday is yet to be determined,” she told News.com.au, conceding the Ford factory could be forced to shut down temporarily until it finds a replacement supplier.

Two of the three car makers claim they were aware of Autodom’s imminent collapse, but one brand claims it was left in the dark and only found out this morning. The car makers are also furious that Autodom is closing down despite recent offers of financial assistance.

Toyota, Holden and Ford all claimed to have offered financial assistance to Autodom in the form of paying more for parts and/or improving their terms of payment – and helping the company reorganise its business. “[Autodom’s closure] is extremely disappointing and unfortunate but it is their decision,” says Phipps.

Toyota, the largest producer of vehicles in Australia, and which takes 260 parts from Autodim, says it has enough components to keep the factory running “in the short term” – but admits it is working feverishly to find replacement suppliers in Australia and overseas. Toyota is the least exposed of the three local car makers because it makes an identical Camry in six other factories around the world, and could source missing parts from suppliers in Thailand and Japan or beyond.

One industry source, who wished to remain anonymous, said Autodom’s precarious situation “wasn’t properly conveyed to us”. Late this morning there was speculation among the car makers that the Autodom statement was merely a ruthless ambit claim to get more financial support. “This could still go either way,” the source said. “But if they’re trying to get money, this is not the way to do it.”

Autodom chief executive officer Calvin Stead was yet to return our calls as this article was published.