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November 24, 2015

Australian OEM supplier starts equipment sale process early

The world's third largest brake supplier is to put production equipment currently used to supply doomed Australian OEMs on to the global market after local car production ends in 2017.

The world’s third largest brake supplier is to put production equipment currently used to supply doomed Australian OEMs on to the global market after local car production ends in 2017.

GoAutoNews said Chassis Brakes International (CBI) would auction machinery used to make steering knuckles and other parts for Ford and Toyota in Melbourne. An auction house has been commissioned to sell two knuckle machining cells and other machining and manufacturing equipment, for delivery after Ford stops production in 2016 and Toyota closes its local operation in 2017.

The report said it was expected disc brake manufacturing operations at the East Bentleigh site, which supplies all three local automakers (GM’s Holden is the third), would be relocated within CBI’s global operations when local car production ceases. Its network spans Europe, Latin America and Asia.

CBI booked revenue of EUR812m in 2014, with 40% of the business located in Europe and 60% in Asia-Pacific, including Australia, and South America.

GoAutoNews said the private equity owner of CBI, KPS Capital, decided to start the sales process early, two years before the end of production, after discussions with the auctioneers. “If someone was to be setting up to take on (production) lines such as these, they would need time for planning and chasing a contract to make those parts,” an auctioneer said. “Hence the reason why CBI, on our advice, has decided to advertise those assets early. By putting them to market early, they will potentially find a buyer that is prepared to venture into that industry and take on the lines, land a contract, relocate them, set them up and be ready to go.”

The equipment is expected to generate interest around the world.

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