Parts Shortage May Force Ford Australia to Halt Production

CMI Industrial’s landlord has locked the plant in suburban Melbourne due to unpaid rent, and the company reportedly is rumored to be on the verge of bankruptcy.

Alan Harman, Correspondent

April 24, 2012

2 Min Read
Ford to stop operations at Broadmeadowsrsquo plant Thursday
Ford to stop operations at Broadmeadows’ plant Thursday.

Ford Australia reportedly is facing a production halt by Thursday because of a problem with a parts supplier.

CMI Industrial makes seatbelt restraints, airbags, brake-pad backing plates, suspension components, inlet and exhaust manifolds and door- and trunk-hinge parts.

The crisis arose when CMI Industrial’s landlord changed the locks on the plant's gates and demanded the unpaid rent. Some 100 workers have not been able to gain access to the factory in suburban Melbourne and the company is rumored to be on the verge of going into administration (bankruptcy).

The Age newspaper says a notice posted outside CMI’s offices says the company has an unpaid rent bill of A$116,446 ($119,733).

The parts problem comes just as Ford is launching its new 4-cyl. Falcon sedan. If CMI goes into administration and halts production, it will leave Ford missing key parts for its Falcon sedan and pickup and Territory SUV.

The auto maker tells the Age it has enough parts to continue production until Thursday, but once supply runs out it will be forced to begin standing down workers.

A Ford spokesman tells The Age if CMI resumes operations early enough on that day, the auto maker may be able to avoid a shutdown.

However, “if it’s late morning onwards, then it’s probably hard to get (CMI) going again and get parts out in time for Friday,” she says. “We’ve done everything we can. We’re waiting to see what CMI can do.”

Any Ford shutdown would involve 1,800 blue-collar workers at its Geelong and Broadmeadows plants, with employees likely to be put on half-pay. “If we get to that stage, we will pull forward annual leave days or other scheduled down days so employees still get paid,” the spokeswoman says.

The Age reports Ford previously has injected money into CMI but is unwilling to do so again unless there is substantial restructuring of the company.

Victoria Manufacturing Minister Richard Dalla-Riva tells the newspaper the state government has been talking to CMI about its financial difficulties and is ready to assist the company in restructuring.

The CMI website says it operates a U.S. distribution center based in Columbia, SC. Parts manufactured for export include brake components to the U.S. automotive sector and truck and trailer brake drums, hubs and wheel assemblies to the North American heavy-transport sector.

Ford and General Motors through Tier 1 suppliers use CMI Industrial manufactured brake components on their vehicles, the company says.

CMI has seven plants – five in Australia and two in New Zealand – manufacturing pressed metal components, machinery and assembly and firing and forging. Customers include Australia's leading auto makers and distributors to the automotive industry.

About the Author(s)

Alan Harman

Correspondent, WardsAuto

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