Another car parts manufacturer gone

[RG]

Didn't see this posted anywhere else.

This time it's ACL Bearings.

http://www.theage.com.au/small-busin...0826-eyq1.html

Originally Posted by The Age

Launceston's ACL Bearing Company will be offered for sale as a going concern after the car parts manufacturer went into voluntary administration this morning, threatening vehicle production at Ford and Toyota.

Secured lender Ford Australia moved to put the troubled manufacturer under the control of receiver managers Grant Thornton to ensure its engine production could continue. Toyota is also affected.

There are dozens of people from administrators Korda Mentha, receiver-managers Grant Thornton and unions involved in discussions on behalf of the 200 workers.

Industry Minister Senator Kim Carr said in a statement that the Federal Government would continue to work with all parties to try and avoid disruption for the automotive industry

"ACL is a critical parts supplier to the Australian automotive industry and there is a danger that production at Ford and Toyota will be affected if supply is interrupted.

"Our primary concern is for the welfare of the automotive industry workers in Launceston and across Australia," Senator Carr said.

The troubles at ACL come as Holden plans to axe hundreds of white-collar jobs, most of them in Victoria. Japan's Toyota Motor Corp., the world's biggest carmaker, today said it plans to cut its global capacity by 10 per cent.

Buyers sought

The receiver-managers Grant Thornton will be seeking buyers for ACL.

"Economic conditions have prompted Launceston-based ACL to review its financial position, and it has decided that its business model is no longer viable,'' the statement said.

"Grant Thornton intends that ACL will continue trading and ensure continuity of supply to the automotive industry."

In June this year an industry-led plan for ACL was announced, involving the Government in partnership with Ford, Toyota, the AMWU and the Federation of Automotive Product Manufacturers.

ACL has been provided with $5 million from the Commonwealth towards a $21.7 million, 17-point restructuring plan, which was aimed at securing the companys future.

Uncertain times

Senator Carr said the Government had acted to stabilise not just ACL, but the Australian automotive industry as a whole at a very uncertain time a time when the world was in recession.

"The task now is to focus on the needs of the workers and on maintaining production of the essential components required by Ford and Toyota.

"In the unfortunate event that workers are made redundant, the Government will provide immediate assistance to help them find new jobs including opportunities to retrain if necessary," Senator Carr said.

Federal Industry Minister Kim Carr said in June that ACL was so important to the industry that the support was ''not only warranted, but essential''.

''I take the view that placing a company of this importance under administration left the industry as a whole very vulnerable,'' Senator Carr said at the time.

He said in June that 5,000 people would have faced unemployment across the industry as a flow-on effect of ACL closing.

The Tasmanian Government had previously raised concerns about ACL's long-term viability and was heavily criticised for not bailing out the company earlier this year.

It had offered a $4 million loan on the condition that ACL's three directors give personal guarantees but after weeks of wrangling a deal was never struck.

ACL has reported losses of $11.5 million in 2006-07 and $8.7 million in 2007-08 with a multimillion- dollar loss expected to be announced for the past financial year.

Not good at all. Hopefully a buyer can be found and all employees keep their jobs. Hopefully it doesn't hinder production at Ford either.

[vztrt]

Some more.

http://www.goauto.com.au/mellor/mell...25761E0018F1FA

ACL collapse exposes Ford and Toyota

Car production threatened as receivers race to find buyer for component producer ACL

26 August 2009

By JAMES STANFORD

FORD and Toyota are facing the prospect of a parts shortage after engine bearing and gasket maker Automotive Components Limited (ACL) was placed into voluntary administration this morning.

Production has been secured for the short term while the administrator and receivers try to find a buyer for the Launceston-based company, which also has a plant in Eagle Farm near Brisbane, but will cease if one is not located.

That would mean a production interruption at Ford and possibly also Toyota, while up to 300 people at ACL would lose their jobs.

Asked what would happen if ACL production ceased, Ford Australia spokesperson Sinead McAlary said: “They are the only supplier of these bearings, so our production would be affected.”

Ms McAlary said the company hoped it would not have to switch bearing suppliers.

“Finding an alternative source for these components would be very difficult,” she said.

Ford Australia handed over a “substantial” sum to prop up the ailing component supplier which looked to have averted a shutdown in June when it secured $7 million assistance package from the federal government.

ACL, which recorded losses of $11.5 million and $8.7 million in the past two financial years, had come up with a new plan for survival after meeting a $3 million loan deadline days after securing the government bailout.

It has since reviewed its financial situation and decided that its business model is no longer financially viable.

In June, the federal government stated that its bailout had saved 5000 jobs that would have been lost as a result of the ACL closure.

Ford Australia’s financial contribution to ACL meant it became a secured lender and therefore had the right to appoint a receiver.

It chose Greg Keith and Matt Byrnes of Grant Thornton of Melbourne, who intend to keep the factories running to avoid a component shortage.

“The receivers intend to continue to trade ACL and ensure continuity of supply to the automotive industry while they consider all available options for the business,” said a company statement.

Federal industry minister Senator Kim Carr said the government would work with Ford, Toyota, unions, receivers and administrators to avoid disruption to the automotive industry.

“Our primary concern is for the welfare of the automotive industry workers in Launceston and across Australia,” Senator Carr said. He said the receivers were committed to keeping the plant running for now.

“Grant Thornton will not be taking a short-term view of the matter and will conduct an ongoing review of ACL. Grant Thornton intends that ACL will continue trading and ensure continuity of supply to the automotive industry.”

However Mr Carr indicated that ACL jobs were not secure.

“In the unfortunate event that workers are made redundant, the government will provide immediate assistance to help them find new jobs – including opportunities to retrain if necessary,” Senator Carr said.

When the government agreed to help ACL in June, Senator Carr said: “This is a decision in the national interest. If ACL had collapsed, Ford and Toyota would have been in very difficult circumstances.

“Thousands of workers would have been stood down and production lines would have halted. There would also have been serious flow-on implications for other parts-makers who supply Ford and Toyota.”

Federal Chamber of Automotive Industries chief executive Andrew McKellar said he hoped the receivers and administrator would be able to come up with a positive result for ACL.

“Today’s action will provide a ‘fresh set of eyes’ to assist in securing the long-term future of the company,” he said.

Mr McKellar said the FCAI welcomed the quick action to keep component manufacturer ACL trading.

“A reliable supply chain is vital to the success of the Australian automotive industry,” he said.

“Components supplied by ACL are crucial to the industry and swift action has been taken to ensure the company continues to trade.”

ACL Launceston workers have already been working four-day weeks, which represented a 20 per cent pay cut, to give the company every chance to survive.

ACL emerged from a 1986 buy-out of various automotive component businesses owned by proud Australian motoring brand Repco.

[platinumXR]

Stands to reason I suppose, another good, viable and recognized Aussie manufacturer run into the ground by bad management. All going down hill since National Parts carked it...buggered if I know how that happened there either...I was told they were turning over 12Mil profit's per annum then...puff...gone :

[vztrt]

Ford threat as supplier collapses

http://www.theage.com.au/national/fo...0827-ezxb.html

Ford threat as supplier collapses
Andrew Darby, Hobart
August 27, 2009

PRODUCTION at Ford's giant Broadmeadows plant is under threat after the collapse of a Tasmanian parts supplier that produces a unique bearing.

Ford spokeswoman Sinead McAlary said if ACL Bearings went under it could seriously affect Ford's ability to make cars, but she would not speculate on the possibility of job losses.

Ford is taking an active role in the supplier's future, and yesterday, as the sole secured creditor, appointed receiver-managers after ACL directors placed the company into administration. Ford had earlier bailed out the company with a loan.

Ms McAlary said ACL was its only supplier of the bearing, and the company had not been able to find an alternative source. ''It would be extremely difficult for us to find an alternative supplier, which is obviously why we've assisted the company,'' she said.

Nearly 400 jobs are under threat at ACL, which has operations in Launceston and Queensland. It has received $5 million from the Federal Government since June, but Industry Minister Kim Carr said a further $2 million will now not be paid.

Senator Carr said the receiver-managers wanted ACL to keep trading and ensure continuity of supply to the car industry. They will also seek buyers for the company.

[csv8]

Whats the bearing for ? cann't IT be sourced from USA?

[madmelon]

That doesn't bode well for Repco either as virtually all our gaskets are ACL and so are most stocked engine bearings and head bolts.

How do companies doing so well for such a long time suddenly just roll over and die?

[InfernoSR]

Oh shyte... i better tell my manager this in the morning... I work for a local Toyota dealership in Spare Parts... and have used ACL parts many many times...

[Wally]

Originally Posted by madmelon

.

How do companies doing so well for such a long time suddenly just roll over and die?

Corporate companies tend to be little different to family wealth:- first generation creativity, second generation stasis and thrid generation entropy= "shirtsleeves to shirtsleeves in three generations".

[aussiblue]

Very sad news as in addition to being the main maker of bearings and gaskets used in Oz Fords, in many ways ACL is the real Repco of the Repco Brabham fame.


http://www.acl.com.au/

ACL traces its past to 1922 when Geoff Russell began manufacturing engine parts for Australia's emerging automotive industry. This business became the foundation for Repco Ltd. The ACL Group started as a management buyout company when it acquired a group of businesses from Repco Ltd in 1986. The name "Automotive Components Limited" and the Trade mark "ACL" were first used by a former listed public company of that name in 1951. The "original" ACL was acquired by Repco in 1965. The Group is an amalgamation of 27 businesses over a period of 86 years. The ACL Group now has sales of $65m per annum and employs 400 people.

[FERG_51]

This is not good. Very sad.

[aussiblue]

It seems like doing the right thing and expanding into the US might have been their undoing:

http://livenews.com.au/business/with...09/8/27/217522

.Thursday, 27 August 2009 4:47 PM 0 comments | Have your say With Ford a customer how can you fail? Easy, says ACL boss



Movement in the value of the dollar alone and raw materials cost movements can wipe us out, because we have a fixed price for products to the car companies.

ACL chairman Ivan James

How can a car parts business with a needy customer like Ford fail, especially after banking nearly $10 million in recent government handouts and industry help?

"Very easily," says Ivan James, the ousted chairman of Tasmania's Automotive Components Limited (ACL), a parts maker that plays a crucial role in supplying the Australian car industry.

The likes of Ford, Toyota and GM-Holden rely on a constant supply of engine bearings and gaskets from ACL to maintain production and tens of thousands of jobs.

But Mr James told AAP on Thursday that ACL's export-dependent business saw its returns shrink as the Australian dollar gained in value and sales volume fell, while fixed costs remained high.

ACL went into administration on Wednesday, and its major creditor Ford called in the receivers.

Australia's car industry now faces an anxious wait to see if the vital engine bearings and gaskets maker will survive.

It's understood that Toyota and Holden have been able to organise alternate suppliers, but Ford remains ACL's biggest customer.

ACL's failure after banking $7 million in two separate federal government handouts, a favourable $2 million loan from Ford and a $330,000 injection from the Tasmanian government has left many wondering what went wrong.

Mr James explains: "ACL is a reasonable-sized business, and Ford and Toyota's demands are a critical but relatively small part of the overall operation.

"About 55 per cent of our turnover is export, and most of it is in US dollars.

"Movement in the value of the dollar alone and raw materials cost movements can wipe us out, because we have a fixed price for products to the car companies.

"We don't get raw material price increases recovered, and we got declining value from our exports.

"Our volumes fell, from the onset of the global financial crisis to now, to roughly 45 per cent below previous levels, with a high level of fixed costs and a fixed workforce.

"We were in a declining market which stripped out contribution margin and cash.

"Fixed costs continued, including wages, but we couldn't reduce the size of the workforce because we couldn't fund the high industry severance benefits.

"When this happened then we were on a hiding to nothing."

ACL doesn't have the $30 million it will need to pay its 320 workers in Launceston and Brisbane their severance entitlements if they lose their jobs.

The federal government will pick up that tab if the company is wound up, under its GEERS scheme.

It gave ACL $2 million in May last year and $5 million in July this year.

Tasmania Treasurer Michael Aird will meet the receivers on Friday to see how the state can help them.

His relationship with Mr James is marked by open animosity.

Tasmania withdrew a $4 million loan offer to ACL in June when its directors refused to personally guarantee repayment, after the state gave the company $330,000 in May last year.

"We will work to do whatever we can as part of (a stakeholders') package to ensure the ongoing viability of ACL," Mr Aird told parliament on Thursday.

"This is an opportunity to work with receiver managers to ensure that ACL have ongoing sustainable business."

Mr James admits he's failed the company and its staff.

He says he is now working without pay to help to assist the administrators and receivers.

He was on $1 a week for the three months to the end of June to help the company secure new funding and repay a critical loan, he said.

From July to Wednesday he had voluntarily received only 85 per cent of his contractual salary, he said.

Mr James, as a director, is entitled to a bonus, agreed to in 1991, equal to twice his annual salary.

But that unsecured liability is unlikely to be paid in the wash-up.

As a director of the company, Mr James is not eligible for any severance benefits from GEERS.

He says he has also not received any payments for unpaid annual leave or unpaid long-service leave.

Industry Minister Kim Carr says economic conditions overwhelmed ACL.

"It decided that its business model is no longer viable," he says.

Senator Carr says the fate of ACL and its capacity to secure supply to the auto industry is an issue of national importance.

Some observers think new management at ACL has been needed for a long time.

Federal Chamber of Automotive Industries chief executive Andrew McKellar says administration will provide a fresh set of eyes to work out the company's long-term future.

The jobs of thousands of automotive workers will be secured by ensuring that supplies from ACL are not interrupted, he says.

There is a danger that production at Ford and Toyota will be disrupted if the supply of ACL parts dries up.

Greg Keith and Matt Byrnes of Grant Thornton have been appointed receivers and managers of ACL and will try to sell it as a going concern.

They say it will be business as usual for ACL for about a month while they investigate the company's affairs.

ACL also owns ACL Gasket Company in Brisbane, ACL Distribution Inc in Grand Rapids, Michigan and Automotive Components NZ in Auckland.

[aussiblue]

No mention on theie US site yet of their troubles http://www.aclperformance.com.au/us/indexus.html
lots on their oz site though http://www.acl.com.au/

[mik]

very sad to see another high profile Aussie company going down the gurgler :(.

[vztrt]

ACL Bearings back to work

http://www.goauto.com.au/mellor/mell...2576230025D70B

Production as usual at Toyota and Ford as parts maker seeks aid and new owner

31 August 2009

By MARTON PETTENDY

PRODUCTION stoppages at Toyota and Ford’s Australian manufacturing operations have been averted by a return to work by Tasmanian automotive components supplier ACL, buoyed by the likelihood of government assistance and prospects for a new owner.

The company, which owns factories in Launceston and Brisbane employing up to 300 workers, was placed into voluntary administration last Wednesday (August 26), when receiver and manager Grant Thornton was appointed by Ford Australia, a secured lender to the company.

Grant Thornton co-director Matt Byrnes this week told GoAuto that both the Tasmanian and Australian governments would support ACL financially while the company was restructured and a new owner sought.

“The important thing that has happened over the last few days is we’ve had meetings and discussions with both state and federal government and they’ve expressed their keen interest in assisting ACL through this process,” said Mr Byrnes.

“We haven’t got down to nuts and bolts of what that assistance might look like, but we’ve certainly had high-level discussion in which both state and federal levels of government have indicated their support and their desire to assist ACL.

“We’re due to have further discussions with state and federal ministers over the next two weeks.”

Mr Byrnes said production at ACL was now back in full swing, with supply lines to both Ford and Toyota fully reinstated.

“Other than on day one, there hasn’t been any stop work. We’ve got the support of the workers and the union and we’re continuing to receive and meet orders,” he said, adding that a new owner had yet to be sought for ACL.

“We’ve had interest from a number of parties, but ACL is not saleable in its current form so really our focus is to review it and to assess how we can get it into a viable form – and then we can have meaningful talks with those interested parties.

“We’re not rushing to locate buyers as you might often see in cases like this. That will happen once we’ve managed to review and restructure ACL.”

Mr Byrnes said the restructuring process would take a number of weeks.

“As you often see in circumstances like this where an external administrator comes in and seeks a wind-down scenario, but that’s not the case here.

“It’s not a short-term approach. We are looking at a more orderly approach to ACL’s position and as part of that we’re conducting a comprehensive review of all aspects of the ACL group.

“Following that obviously we’ll be looking at what decisions need to be made to ensure that ACL can continue viably into the future,” said Mr Byrnes.

[MaTTe]

this has been going on for ages, i hadn't read any of the articles, but noone in perth has been able to supply acl race pistons or rings, nor head haskets. we have plenty of pistons, but without the rings they're all rubbish.. we first found out about2-3 months back..
now we have to use the precision pistons and hastings rings, unfortunately the hastings rings are wider so they dont fit the acl pistons, however the precision pistons are lighter.. so there's an advantage there, but the costs of each motor are increased..

we can only hope things start to recover quickly..

[terri tx]

Hopefully it survives, their are many families that depend on it not to menton ford