Component supplier, Autodom, is shutting its South Australia (ai Automotive) and Victoria facilities for an indefinite period.
Autodom has also announced a trading suspension of the company’s’ securities on the ASX as it continues to negotiate a restructure proposal to enable it to restart business at the facilities.
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The company says it has been “forced to take this difficult decision” following a failure, after several months of negotiations, to come to an agreement with key automotive stakeholders that would see the operation be sustainable.
The closure of the facilities, which currently employ 400 people is indefinite while all parties “consider their position,” said the company.
However, Autodom CEO, Calvin Stead, has emphasised his “disappointment at the lack of support” from what he terms “key partners” in the industry, which could result in what he describes as “significant cost burdens” to both government and industry should the business fail completely.
“Our company is constrained by high fixed costs that cannot easily be aligned to the pace of the current volume reduction in the local car manufacturing sector,” Stead said. “We need time and assistance to reorganise ourselves and structurally change the direction in which we are headed
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By GlobalData“We have made excellent progress in this regard.”
Stead added that as the car industry in Australia had more than halved its build rates in “less than four years,” mutual cooperation was needed between the auto companies and component sector, with government also playing a key role.
“Unfortunately we have no choice but to make this very difficult decision while we work together with all stakeholders in the hope a solution can be found,” said Stead. “We trust the car companies and stakeholders will see the benefits of the restructure plan put forward.”
