Ford, Toyota production safe as ACL bailed out

A POTENTIAL production shutdown at Ford and Toyota has been averted with a $7 million federal government grant ensuring engine component-maker ACL keeps its doors open.

Industry minister Senator Kim Carr announced on Monday that ACL Bearings, which produces bearings in Launceston and gaskets in Brisbane, would receive the Automotive Industry Structural Adjustment Program grant to ensure it met a $3 million loan deadline due today.

The federal government previously approved a $4 million assistance package for the component producer, but required security from the Tasmanian government.

The Tasmanian government would only lend money to ACL if its directors personally guaranteed the money, something two out of three ACL directors were not prepared to do.

Yesterday, Senator Carr announced the new deal with conditions, including ACL being required to meet a series of milestones such as making an investment in its restructuring from its own resources.

GoAuto understands Ford and Toyota are also helping the company with a confidential assistance package.

Senator Carr said 5000 people would have faced losing their jobs as a consequence of an ACL closure.

He said it was important that ACL, which has recorded losses of $11.5 million and $8.7 million in the past two financial years, be given a chance to stay afloat.

“This is a decision in the national interest. If ACL had collapsed, Ford and Toyota would have been in very difficult circumstances,” he said.

“Thousands of workers would have been stood down and production lines would have halted. There would also have been serious flow-on implications for other parts-makers who supply Ford and Toyota.” ACL Launceston workers had already been working four-day weeks, which represents a 20 per cent pay cut, to give the company every chance to survive. This arrangement will continue as the company restructures over the next three years.

ACL chairman Ivan James said the company would be transformed under a 14-point plan that included investment in new tooling and product development.

“This is a chance, a once-in-a-lifetime chance for many of our people to reinvent the company and prepare it for its future,” he told the ABC.