Economy

Ford could stand down 1,800 employees following supply dispute

Cara Waters /

Ford may stand down 1,800 employees at its two Victorian plants from Thursday after another car parts manufacturer comes close to collapse.

Around 80 employees have been locked out of the Campbellfield factory of supplier CMI after a landlord changed the locks in the middle of the night over an alleged unpaid rent bill of $116,000.

CMI has stopped production until further notice and it is feared it could go into administration, with 250 jobs at risk around the country.

The CMI dispute follows the administration of APV Automotive Components earlier this month.

CMI is a major supplier to Ford and the Australian Manufacturing Workers Union (AMWU) says the carmaker could run out of the parts that CMI supplies by Thursday.

Steve Dargavel, Victorian secretary of the AMWU told SmartCompany the union had tried to resolve the dispute between CMI and the landlord through a Fair Work Australia conference.

“We sought to get a settlement to the rent dispute but it ultimately could not be settled,” says Dargavel.

“We are concerned obviously about the behaviour of the landlord in locking out the workforce and what that means to the industry, particularly as the landlord had other options available to them.”

“The landlord was demanding more money than was owed under the lease which we found difficult to swallow.”

Ford has approached the AMWU to discuss how to conduct workforce stand-downs later in the week.

Dargavel says the impact of any stand downs would be far reaching.

“There are a lot of companies which supply parts to Ford and this will put a lot of pressure on those companies as well so the problem is much larger than Ford,” he says.

The AMWU says Ford is not foreshadowing redundancies; the only issue being discussed is stand-downs.

“Ford is not talking about sacking its workforce and Ford is working with the union to try to minimise the effects on employees and its members,” says Dargavel.

“We don’t have a complaint against Ford, its behaviour stands in stark contrast to Toyota’s.”

“Certainly in relation to the CMI employees the situation is quite concerning. The company is unable to make parts so its cashflow is in jeopardy.”

The concerns over CMI arose as Ford, Toyota and Holden agreed to a deal with the receivers of the failed car part manufacturer APV Automotive Components.

APV resumed production yesterday following 34 redundancies as part of an agreement with the car companies in a bid to avoid disrupting local car production.

Receiver and PPB Advisory partner, Stephen Longley said, “The company is back in business after an urgent restructuring over the last two weeks which involved a combination of obtaining guaranteed order volumes and short-term prices rises from vehicle manufacturers Holden, Ford and Toyota and a successful voluntary redundancy process.

“This outcome has been achieved after extensive discussions and consultation with the company’s key stakeholders including the vehicle manufacturers, employees, the AMWU and suppliers.”

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Cara Waters

Cara Waters is the former editor of SmartCompany. Previously, Cara was a senior reporter at the Financial Times website FT Adviser in London and she also worked for The Sunday Times in London.

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