Ford supplier lock out?

[jpd80]

Just heard on Seven news, a key supplier for Ford is in dispute with their land lord and has been apparently locked out of the premises.
The news reporter said that Ford has less than two days parts supplies...

Anyone able to elaborate more on the story and give us more info?

[Archilino]

Around 100 workers are locked out of the Campbelfield factory supplier CMI after a disgruntled landlord changed the locks over an estimated $150,000 of unpaid rent.

[Buntz]

Ford may have to pay the bill, then get 150k worth of stock in exchange.

[JPFS1]

It's a shambles. $116K of unpaid rent, going into Administration, as always, it's up to Ford to bail them out with the money they don't have.

[mik]

i`d be pretty annoyed with 150k owed.

[jpd80]

What does CMI supply?

[MrEL]

Originally Posted by jpd80

What does CMI supply?

Suspension arms apparantly..

[JPFS1]

Seatbelt and airbag systems, door and boot parts, brake pad bracket parts, and a few other little things.

[block58]

From heraldsun.com.au

FORD'S Geelong and Broadmeadows plants could stand down almost 1800 workers as early as Thursday because of the collapse of a key parts supplier.

Around 100 workers are already locked out of the Campbellfield factory of supplier CMI after a disgruntled landlord changed the locks over an estimated $150,000 of unpaid rent.

The plant makes suspension arms for Ford’s Falcon and Territory range but the car manufacturer only has two days’ worth of parts because of its “just in time” delivery policy.

Ford confirmed this afternoon that it had enough parts until Thursday afternoon but it could not guarantee workers shifts beyond that date until new parts were found.

Australian Manufacturing Workers Union assistant secretary Leigh Diehm said the flow on effects from the shutdown of CMI would be major.

“They only supply to Ford and because they have a ‘just in time’ delivery policy to save on warehousing they don’t have much stock,” he said.

“I would think they only had two days’ stock and that included today.”

Ford could begin standing down workers as soon as Thursday, given that the factories would already be closed on Wednesday because of the ANZAC day public holiday.

Mr Diehm said the State Government needed to urgently step in to avoid a major jobs disaster.

He said there were almost 4000 workers that would be affected at Ford’s Geelong and Broadmeadows plants, but the company clarified this afternoon that only 1800 would be stood down on half pay.

“The Victorian State Government has been doing nothing. There are between 3000 and 4000 workers at the Broadmeadows and Geelong plants, where does that leave us in the next few weeks,” Mr Diehm said.

“This is a very sad situation.”

Workers will hold a meeting at CMI’s Campbellfield plant at 7am tomorrow to discuss their future.

The landlord refused to reopen CMI’s Campbellfield plant despite an emergency Fair Work Australia hearing on Saturday.

Ford spokeswoman Sinead McAlary the company had been in discussions with CMI about the supply of parts.

“We are okay until mid to late Thursday but we are waiting to see what happens at this stage,” she said.

“The plants could be stood down by the end of Thursday and that would go on until we get new parts.”

[svo supporter]

Surely there is more to this story than meets the eye.....Seriously $150,000 in rent owing.....What landlord lets things get that far behind? None I'd be aware of.

[jpd80]

Is it any wonder why Ford keeps sourcing more parts from overseas via "One Ford" supplier network.
How many times will Ford have to pick up the tab for suppliers falling over before they say enough...

[Smoke Pursuit]

Originally Posted by jpd80

Is it any wonder why Ford keeps sourcing more parts from overseas via "One Ford" supplier network.
How many times will Ford have to pick up the tab for suppliers falling over before they say enough...

Its not the suppliers fault entirely... Gotta remember Ford are not ordering the same amount of stock they use to, with down days etc how do they expect their suppliers to survive. Its a nasty cycle.

[Smoke Pursuit]

Originally Posted by svo supporter

Surely there is more to this story than meets the eye.....Seriously $150,000 in rent owing.....What landlord lets things get that far behind? None I'd be aware of.

Plenty of business men work on handshake deals, there's a real possibility that the landlord is trying to help the supplier through its rough patch, simply because the industrial / commercial rent scene is pretty quiet. Better off trying to work with a tenant then end up with an empty property. Looks like they couldn't trade out of it.

[jpd80]

Originally Posted by DASH GT

Its not the suppliers fault entirely... Gotta remember Ford are not ordering the same amount of stock they use to, with down days etc how do they expect their suppliers to survive. Its a nasty cycle.

Well, I think JPFS1 summed it up perfectly:

Originally Posted by JPFS1

It's a shambles. $116K of unpaid rent, going into Administration, as always, it's up to Ford to bail them out with the money they don't have.

[MAD]

Looks like the world has turned nearly full circle.
Auto manufacturers will be back to making all their own stuff again. Hope they haven't sold all of their old equipment.

In a continuous pursuit of profit, it seems like the pressure to please the shareholder is returning the companies back to square one. Who'd of thought that greed would not pay off in the end.

[svo supporter]

Originally Posted by MAD

Looks like the world has turned nearly full circle.
Auto manufacturers will be back to making all their own stuff again. Hope they haven't sold all of their old equipment.

In a continuous pursuit of profit, it seems like the pressure to please the shareholder is returning the companies back to square one. Who'd of thought that greed would not pay off in the end.

Problem is, the Australian car manufacturing industry is struggling under the weight of cheap imports and components. So our car makers are squeezing the local suppliers to get the parts cheaper, so to reduce the cost of vehicle production.

Unfortunately I have seen a few car component suppliers fold due to this pressure from the manufacturers.

Personally the way I see it is limit the number of imports coming into this country and support the local car manufacturers more.

[Bossxr8]

Ford will have to bail them out till they can find another supplier, solely because its cheaper to bail them out than it is to stop the line running.

[Franco Cozzo]

Here is the downfall of "just in sequence/just in time" inventory control, we run the same system at work and for us it isn't working, its costing us thousands of $$$ in lost productivity because we keep running out of critical parts we need, and we don't know the lead times of parts from our suppliers, which holds up the build wen you can't do anything on them anymore.

[MAD]

Originally Posted by svo supporter

Problem is, the Australian car manufacturing industry is struggling under the weight of cheap imports and components. So our car makers are squeezing the local suppliers to get the parts cheaper, so to reduce the cost of vehicle production.

Unfortunately I have seen a few car component suppliers fold due to this pressure from the manufacturers.

Personally the way I see it is limit the number of imports coming into this country and support the local car manufacturers more.

Those cheaper imports and components wouldn't have got a look in if it wasn't for the dollar signs flashing in the CEO/board's eyes.
They have been allowed to gain massive momentum due to the greed of a few. Now they're reaping what was sown.

[mik]

Originally Posted by Big Damo

Here is the downfall of "just in sequence/just in time" inventory control, we run the same system at work and for us it isn't working, its costing us thousands of $$$ in lost productivity because we keep running out of critical parts we need, and we don't know the lead times of parts from our suppliers, which holds up the build wen you can't do anything on them anymore.

i did a couple of semi loads for toyota, some years ago, parts are shipped in only a matter of hours before being used on the line, it`s a major drama if anything is even an hour late, it`s hard to see how they can manage with this system.

[BHDOGS]

Never fear to the government treasury for a bail out post haste WAYNE SWAN AWAYYYYYYYYYYYYYYYYYYYYYYYYYYYYY

[b0son]

Originally Posted by Big Damo

Here is the downfall of "just in sequence/just in time" inventory control, we run the same system at work and for us it isn't working, its costing us thousands of $$$ in lost productivity because we keep running out of critical parts we need, and we don't know the lead times of parts from our suppliers, which holds up the build wen you can't do anything on them anymore.

Sounds more like poor planning and poor supplier choice (assuming you have alternatives). We've been running JIT for several years with comparatively little out-of-stocks. Our inventory planner is pretty on the ball though, and I have no qualms switching suppliers when required.

[BroadyFord]

Ford may be forced into shutdown


http://www.theage.com.au/national/fo...423-1xhfx.html

VICTORIA'S car manufacturing industry is facing a fresh crisis with a crucial components supplier to Ford likely to go into administration today - forcing the car maker to start standing down hundreds of staff from Thursday.

It comes as 350 workers sacked by Toyota last week plan to gather in protest at its Altona plant this morning, with their union expected to accuse the car maker in the Federal Court of targeting shop stewards and health and safety representatives when deciding who to fire.

CMI Industrial makes suspension components that are supplied to Ford. Yesterday, just as Ford was launching its new four-cylinder Falcon, CMI appeared all but certain to go into administration this afternoon, leaving about 200 employees in limbo.

It will also leave Ford unable to source key parts for its Falcons, Falcon utes and Territory vehicles.

''Our stock is OK through at least most of Thursday,'' Ford spokeswoman Sinead Phipps said yesterday. But she warned that if CMI could not continue supplies, Ford would have to halt production until a solution was found.

A shutdown would involve Ford's Geelong and Broadmeadows plants, with workers likely to be put on half-pay. Ms Phipps said she expected the situation to be resolved soon.

Ford is understood to have injected money into CMI in the past but is now unwilling to bail out the company unless substantial restructuring occurs.

Since December, CMI has failed to pay all the rent on its Campbellfield plant. On Friday, the landlord changed the locks on the plant's gates and demanded $116,000 in unpaid rent. It left about 100 workers locked out.

CMI has four factories in Victoria, at Campbellfield, Footscray, Ballarat and Horsham. It also has a factory in Toowoomba, Queensland. It employs at least 200 people nationally.

Steve Dargavel, state secretary of the Australian Manufacturing Workers Union, said his members simply wanted the
landlord at Campbellfield to end the lockout so they could return to work. He said CMI had been under financial pressure for some time.

The company has had a restructuring proposal before the state government for several weeks, which would require hundreds of thousands of taxpayer dollars to be pitched in.

Manufacturing Minister Richard Dalla-Riva confirmed the government had been talking to CMI about its financial difficulties. He said the government was ready to assist the company in restructuring.

But opposition manufacturing spokesman Adem Somyurek said the government was not acting, and the car sector was paying the price for its lack of direction. ''The government's hands-off-the-wheel approach is just not working,'' he said.

The AMWU's lawyers, Maurice Blackburn, are today expected to file documents in the Federal Court accusing Toyota of targeting union officials in last week's forced redundancies. Toyota selected workers for redundancy by ranking them out of five across nine criteria.

The union will allege ''adverse action'' was taken by Toyota, because of the number of shop stewards and health and safety representatives forced to take packages. A Toyota spokeswoman said she could not comment until documents had been filed in court.

The federal Fair Work Act allows employees to take action against an employer who they believe unfairly targeted them because they were union representatives.

It wasn't all bad news in the state's automotive industry yesterday. Parts manufacturer APV Automotive Components in Coburg went into receivership earlier this month. Yesterday, receivers PPB Advisory announced the company would trade on, with 34 of its 126 staff taking voluntary redundancies.

[jpd80]

Thanks for the post BroadyFord, seems like the devil in the detail:

A shutdown would involve Ford's Geelong and Broadmeadows plants,
with workers likely to be put on half-pay. Ms Phipps said she expected the
situation to be resolved soon.

Ford is understood to have injected money into CMI in the past but is now
unwilling to bail out the company unless substantial restructuring occurs.

Since December, CMI has failed to pay all the rent on its Campbellfield plant.
On Friday, the landlord changed the locks on the plant's gates and demanded
$116,000 in unpaid rent. It left about 100 workers locked out.

CMI has four factories in Victoria, at Campbellfield, Footscray, Ballarat and Horsham.
It also has a factory in Toowoomba, Queensland. It employs at least 200 people nationally.

[washoutbeach]

I dont think the real reasons are emerging.

The landlord has repossessed the property allegedly due to non-payment of rent.

Exactly why CMI hasn't paid the rent on the property is unknown. It may or may not have the money. It might be holding it back as its in a dispute with the landlord. It my have used the funds elsewhere, legally, illegally-its hard to say. It might be due to a downturn in sales-GFC and everything They build other things.

But its a big step for the landlord as well as if he's legally wrong, he may be liable for ongoing losses.

Of course the bigger problem for Ford Australia is whether it can position itself globally and/or whether it can increase domestic sales that will sustain local production.

If it were profitable, If I was boss of Ford Australia. Id look carefully at how the general is managing to sell its vehicles to the USA. If it made sense, I would look at recruiting their people who made this happen and get them working for us.

Then Id be looking to make the Falcon standard only in LPG and make it much lighter and a bit smaller, because as the world economy recovers, they are talking about petrol at $2.50 a litre in less than five years from now and there will be a strong fleet market for these cheap running cars.

I would pretty much do all kinds of things to enable customers to personalise the car even more than they do now.

Worth another thread!

[b0son]

Originally Posted by washoutbeach

It my have used the funds elsewhere, legally

If they're paying some creditors at the expense of others, they're trading insolvent. You dont do that legally.

[jpd80]

Originally Posted by b0son

If they're paying some creditors at the expense of others, they're trading insolvent. You dont do that legally.

If you read between the lines, they could already be under regulation/receivership as exampled by this:

The company has had a restructuring proposal before the state government for several weeks, which would require hundreds of thousands of taxpayer dollars to be pitched in.

[jpd80]

Originally Posted by washoutbeach

If it were profitable, If I was boss of Ford Australia. Id look carefully at how the general is managing to sell its vehicles to the USA. If it made sense, I would look at recruiting their people who made this happen and get them working for us.

Pontiac G8 lost over $200 million because it was wound up early due to the demise of Pontiac.
Caprice PPV is not setting the world on fire due to severe logistics problems..

The time to launch Commodore SS as a Chevy Lumina SS in the states was five years ago,
I'm sorry but i think GM has lost the moment and the market has moved on..

[drpopper]

Strangely my cousin who is a car salesman at a Chevorlet/ Cadillac dealership in North Carolina USA tells me they are getting a lot of inquiry and sales for the Caprice PPV vehicle from the general public and have been selling them to the general public for quite a few months. He also reckons the GFC is pretty much over in the USA with sales going up each month back to almost pre GFC levels.

[wrongwaynorris]

Originally Posted by svo supporter

Problem is, the Australian car manufacturing industry is struggling under the weight of cheap imports and components. So our car makers are squeezing the local suppliers to get the parts cheaper, so to reduce the cost of vehicle production.

Unfortunately I have seen a few car component suppliers fold due to this pressure from the manufacturers.

Personally the way I see it is limit the number of imports coming into this country and support the local car manufacturers more.

We had the perfect plan until John Button and the inept incompotent Labour government dissmantled it . It was called tarrif protection , you know exactly what Japan does to automotive imports into Japan .