Crisis at auto component companies

VICTORIA’S component industry suffered two knockout blows last week with announcements that two Melbourne-base component makers would axe more than 600 workers.

Both companies plan to wind back local operations and move jobs to Asia in what has been described by unions as a slap in the face for local component manufacturing.

About 100 workers at windshield wiper maker Trico, in Springvale, walked off the job last Thursday after the company confirmed 160 workers face the sack as it transfers operations to China.

In another blow, respected seatbelt and airbag manufacturer Autoliv said it would shed 500 jobs, more than half its workforce, at its Broadmeadows factory over 18 months as it transfer production to South Korea.

Autoliv estimated the job losses would cost the company about $5 million. The costs will be recognised gradually, with an expected start in the current quarter. Less than $1 million will be related to asset write-offs, it said.

Apart from Autoliv’s Broadmeadows factory, another 65 jobs at a subsidiary, seatbelt textile maker VOA Webco, are also in jeopardy.

The company will soon start talks on the viability of the Thomastown plant but cost pressures and "a lack of critical volume" was likely to force its closure.

"No final decision has been made, however, it is anticipated that competitive cost pressures and lack of critical volume will force the closure of the Australian plant within 18 months," Autoliv said in a statement.

The Victorian secretary for the Australian Manufacturing Workers’ Union, Dave Oliver, said the Trico workers were devastated and angry, and wanted to look at the company’s business plans.

"This company has not bothered to consult with the workers or the union, despite the fact that the Australian CEO put a recommendation to shut the plant over six months ago to the US owner," Mr Oliver said.

"These jobs going to China is another example of the failure of the Australian government to put in place policies that promote Australian jobs and Australian manufacturing.

"The other villains in this are the major car companies, who have received support from the Australian taxpayer, and who are now sourcing auto-components from overseas rather than investing in Australian local industry." Trico managing director John Cummings told media outlets job cuts were needed if the company was to continue operations in Australia. He said the company had lost several significant contracts and faced ongoing price pressures.

Autoliv also said it had no choice but to restructure and cut jobs to ensure its ongoing viability.

Currently it employs more than 34,000 people worldwide, operates 80 plants in more than 20 countries and makes about 80 million seatbelt systems annually as well as airbag systems.

Autoliv first told its workforce of 880 two years ago that it would need to slash 430 jobs by the end of 2006. Last Thursday’s announcement is another 70 on top of that figure.

About 120 jobs will be lost in the middle of next year, at the end of a supply contract for Holden.