Crippled Australian Supplier Could Take GM And Ford Down

Bertel Schmitt
by Bertel Schmitt
crippled australian supplier could take gm and ford down

The demise of a large Australian auto parts supplier threatens to bring Australian units of Ford and GM to their knees as early as next week. Management is working feverishly on keeping the doors open, while complaining about “lack of support from key players in the industry,” Reuters says.

Autodom, a top Australian parts supplier, has been hit hard by high local production and labor costs. Manufacturing lines cannot be quickly scaled back, CEO Calvin Stead said. Autodom is Australia’s largest press metal manufacturer, and a key component supplier to Ford and GM Holden.

Despite hefty government subsidies and tariff support, the Australian auto industry is reeling. The high Australian dollar makes imports attractive and exports uncompetitive.

  • Ford buys hundreds of components from Autodom for its Australia-built Falcon sedan and Territory SUV. Ford only has stock until the middle of the coming week.
  • GM Holden said a closure of Autodom could halt production of the Commodore sedan and Cruze compact by next week.
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  • Pastor Glenn Pastor Glenn on Nov 02, 2012

    Interesting enough, GM and Ford apparently have not learned one of the biggest lessons from Toyota, especially. Treat your suppliers the way you'd like to be treated by them. Ensure they can be profitable. Help them instead of pinching all pennies out of them to make them unprofitable. Treat them as if they are partners because they are. I'll give a real example. A friend of mine worked at a car parts plant in the USA and the big 3 treated the company he worked for like a mere hireling - no, more like a slave. Toyota, on the other hand, helped the company out. Treated it like a valued partner. In the time when GM and Chrysler went bust, this particular supplier also went bankrupt. Toyota added work as quickly as possible to this plant - even though the supplier was "not allowed" by bankruptcy law to ASK for additional work, Toyota sent it along to help. Seems to me like the Australian portions of GM and Ford needed to learned from Toyota too.

    • See 3 previous
    • Outback_ute Outback_ute on Nov 04, 2012

      @sunridge place tresmonos - from news reports I think that just means that Toyota has more parts on hand. Perhaps they took a precaution against this happening?

  • Oosh Oosh on Nov 02, 2012

    IIRC current tariffs are 10%, except vehicles with high ground clearance that see 5%, hardly "geneeous" in my book even though id rathwr see them at 0. Plus the FTA agreement with Thailand sees alot of small/mud size made there attract 0. Far more about the nonstop subsidies here.

    • Outback_ute Outback_ute on Nov 04, 2012

      The import tariff on all cars is now 5%, and due to reduce again in 2015

  • CJinSD CJinSD on Nov 02, 2012

    Surely Cruze parts can be imported thanks to the strong Australian dollar and the proximity to the car's Korean homeland.

    • RobertRyan RobertRyan on Nov 02, 2012

      That would be the last of their worries at Holden if a major supplier gets into trouble. Normally, suppliers affect more than one model and in this case it was three manufacturers as well.