After shutting its doors last week, administrators have been called in for Autodom, with the high cost of redundancy payments a key reason behind the beleaguered auto component manufacturer’s collapse.
Peter Macks, Robert Naudi and Ian Burford of Macks Advisory were appointed administrators and have taken control of Autodom and its associated companies.
Macks told SmartCompany crippling redundancy payments totalling $18 million had brought the company down.
“It has for some time been burdened with significant employee entitlements in terms of redundancy and the company has been grappling with how to restructure given that and coping with changes in the industry,” he says.
“Autodom had put restructuring proposals to various parties and basically the discussions broke down.”
Macks says the administrators are working through the financial position of Autodom and have started talks with the key players in the automotive industry, the group’s secured creditors, union representatives and the government to assess immediately available options.
“Over the weekend various parties were working pretty hard to secure funding to keep the company in standstill mode.”
Autodom’s major creditors are the National Australia Bank, which is a secured creditor, and the car companies General Motors Holden, Ford and Toyota.
The high cost of redundancy payouts were also a key factor in the collapse of Melbourne car parts manufacturer APV Automotive Components earlier this year.
Harry Hickling, the former managing director of APV Automotive, was reported to have said the unions were to blame for the company’s difficulties and that the company did not have the cash reserves to finance redundancies, with the average negotiated redundancy payout standing at 45 weeks and some employees owed a maximum cap of 100 weeks wages.
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