Parts-maker CMI loses battle for survival

AUSTRALIAN car-makers are set to initiate fall-back plans for parts supply after struggling component manufacturer CMI Industries lost its battle for survival yesterday after months in receivership.

Two CMI factories are set to be closed by administrators in October after a buyer could not be found for the Cambellfield and West Footscray factories in Victoria, throwing 119 workers out of a job.

One of the affected carmakers, Ford Australia, told GoAuto today that it did not expect disruption of Falcon and Territory production at its Broadmeadows plant, just up the road from the CMI factory that makes suspension parts for the vehicles.

Ford brand communications manager Neil McDonald said supply would not wind down until about October, by when Ford planned to have another supplier in place.

He said he could not discuss which other supplier might step into the breech and whether they were an overseas or Australian manufacturer, as such arrangements were commercial-in-confidence.

The parlous financial state of CMI came to light in May when the 80 workers at the Campbellfield plant were locked out by an unpaid landlord, forcing Ford Australia to production for two working days.

Ford-appointed receivers McGrathNichol tried to reorganise the operation , laying off workers to cut costs, but the company went into liquidation within a couple of weeks.

Ultimately, the company was put into liquidation, but administrators held out some hope that another company would come along and buy the assets to keep the operation going.

Existing contracts will keep CMI production going until the end of October, when 67 remaining employees at Campbellfield and 52 employees at West Footscray will be made redundant.

The collapse of CMI is just another disappointment for the Australian automotive industry, which suffered a blow only last week when Ford said it would shed 440 workers due to slowing sales of its locally produced vehicles.

Bosch, Autoliv and a number of other suppliers have also cut staff as they struggled to compete with cheap imports.

CMI's Ballarat plant is likely to survive, with liquidators negotiating a sale with a potential buyer.