Futuris feels the pinch
BY TERRY MARTIN | 16th Dec 2008
Human resources bulletins obtained by GoAuto reveal that Futuris Automotive has made the staff cuts at its Port Melbourne head office, design and technical centre and its South Australian operations.
Two separate bulletins issued last week revealed that 17 permanent positions across a broad range of mainly white-collar positions were being cut at Port Melbourne and another 45 in South Australia.
The latter included notification that 13 senior staff members, many of them in management, would be leaving the company over the course of this month and during January.
A bulletin dated November 13 also revealed that 25 employees, 12 of them contractors, “no longer have a role in the business” at the Port Melbourne site.
“The business is currently experiencing significant operational and financial challenges: lower vehicle production volumes in Australia resulting in reduced revenue a number of future customer programs have been either delayed or cancelled (and) the global and local market environment continues to change,” said Futuris Automotive Global HR executive general manager Dannielle Kitchen in the November 13 bulletin.
“We have already implemented significant cost-reduction initiatives and have deferred the need for permanent employment reductions for as long as possible. Regrettably, we have now reached that point.” On December 8, Group HR manager Rita Lambros cited the same reasons for the further round of cuts at Port Melbourne, adding: “We have identified the need to reshape our business to match the market environment. Regrettably, these changes have led to additional job losses.” GoAuto contacted Futuris Automotive this week but was advised that senior management were unavailable for comment.
Futuris Automotive Interiors is 100 per cent owned by agribusiness giant Futuris Corporation and is part of the Futuris Automotive Group, which includes a 35 per cent shareholding of Air International Thermal Systems.
Futuris’ automotive interiors business employs around 1400 people and designs, engineers and manufactures a wide range of products, such as seating, interior trim and controls. Its client list includes GM, Ford, Toyota, Chery, JAC, Mitsubishi and Daimler.
On December 1, Futuris Corporation downgraded its profit guidance for the current financial year and announced a significant restructure involving the sale of around $350 million in assets and a name change to Elders Ltd.
The company expects to make an underlying loss after tax of $8.7 million for the first half of the financial year, with underlying profit after tax lowered to $60.2 million for the full year, compared with $84.2 million last year.
Included in these results is an expected $4.3 million loss in earnings before interest and taxes (EBIT) for the first half of this financial year for Futuris Automotive – down from $7.4 million in earnings for the same period last year – and $2.4 million in earnings for the full year, compared with $22.4 million last financial year.
The deepening global financial crisis also hit another Australian car supplier last week – Victorian brake pad manufacturer FMP Group (Australia), which announced that it was shedding 50 jobs at its Ballarat operations.
“It’s been caused by the global economic environment. The conditions are unprecedented,” interim managing director Graeme Dixon told AAP. “It has been tough here for a while. Our staff have been well aware of that. Trading and business conditions have been difficult.
“We want to maintain a viable operation going forward. We have a good skills base. We want this business to continue to be a viable part of Ballarat.” FMP employs around 350 workers and supplies brake products to Ford, Holden and Toyota. It also exports to the US.
Overseas, BorgWarner Inc said it expected to complete 2900 job cuts from its global workforce by the end of this year and that it had cut production for extended periods in North America and Europe. Meanwhile, the Wall Street Journal reported that Continental was attempting to negotiate with creditors over restructuring the debt – some $13.5 billion euros ($A27.2 billion) – it incurred to purchase the VDO automotive electronics business from Siemens.
BorgWarner and Continental are among several leading components manufacturers – including Bosch, Delphi, Faurecia, Schaeffler and Valeo – which are reducing production over the holiday period.
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