Ford supplier lock out?

[redman]

Originally Posted by BroadyFord

Ford may be forced into shutdown


http://www.theage.com.au/national/fo...423-1xhfx.html

VICTORIA'S car manufacturing industry is facing a fresh crisis with a crucial components supplier to Ford likely to go into administration today - forcing the car maker to start standing down hundreds of staff from Thursday.

.....

The caption under the picture of the Ford logo has the words "Ford is likely to go into administration". It should have something like "A key supplier of" in front of the sentence. Typical slack editing from Fairfax.

[fat289]

Originally Posted by washoutbeach

I dont think the real reasons are emerging.

The landlord has repossessed the property allegedly due to non-payment of rent.

Exactly why CMI hasn't paid the rent on the property is unknown. It may or may not have the money. It might be holding it back as its in a dispute with the landlord. It my have used the funds elsewhere, legally, illegally-its hard to say. It might be due to a downturn in sales-GFC and everything They build other things.

But its a big step for the landlord as well as if he's legally wrong, he may be liable for ongoing losses.

Of course the bigger problem for Ford Australia is whether it can position itself globally and/or whether it can increase domestic sales that will sustain local production.

If it were profitable, If I was boss of Ford Australia. Id look carefully at how the general is managing to sell its vehicles to the USA. If it made sense, I would look at recruiting their people who made this happen and get them working for us.

Then Id be looking to make the Falcon standard only in LPG and make it much lighter and a bit smaller, because as the world economy recovers, they are talking about petrol at $2.50 a litre in less than five years from now and there will be a strong fleet market for these cheap running cars.

I would pretty much do all kinds of things to enable customers to personalise the car even more than they do now.

Worth another thread!

Gas is not a cheap option anymore 88.9 cpl here atm !!!

[aussie muscle]

i presume ford would've done something like "Let the company close, buy it's assets, set up their own company"

[Loonar]

With a nod to all the previous posts, i am, unfortunately one of C.M.I's employees, based in Toowoomba, at their foundry. Best not be saying too much, only that, we've been working with a sword dangling over us for several years now, never quite knowing when it's going to fall.... sympathies to those affected....

[BrisVegas]

Originally Posted by Loonar

With a nod to all the previous posts, i am, unfortunately one of C.M.I's employees, based in Toowoomba, at their foundry. Best not be saying too much, only that, we've been working with a sword dangling over us for several years now, never quite knowing when it's going to fall.... sympathies to those affected....

all the best mate, hope there is a good outcome for you guys and for Ford if possible.

[TMC]

The "Just in time" delivery policy will only work if the supplier can provide continual supply. Not even Ford themselves can do that. That's just asking for trouble. Although you don't want to hold large inventories of every component conceivable, you need "emergency" stocks just in case that rainy day comes.

I used to work for a company that manufactured medical equipment, and we relied on parts coming from Canada, Asia and Germany. If we never kept emergency stock and just ordered as we needed it, we would have a lot of downtime in production. The fact is even with emergency stock we still ran out when things really hit the fan with our overseas suppliers, which did happen from time to time.

It's a frustrating business manufacturing in this country.

[Mr Hardware]

A JIT policy is fine, just so long as there isn't a single point of failure in the supply chain.

[TMC]

Originally Posted by aussie muscle

i presume ford would've done something like "Let the company close, buy it's assets, set up their own company"

It all depends on Ford global's policy, but if Ford did that to everyone, they'd become a jack of all trades master of none. They probably used to make their own components but outsourced to save money. Many companies do that now. Unfortunately it creates problems like this. Risky!!

[Joe5619]

Originally Posted by TMC

The "Just in time" delivery policy will only work if the supplier can provide continual supply. Not even Ford themselves can do that. That's just asking for trouble. Although you don't want to hold large inventories of every component conceivable, you need "emergency" stocks just in case that rainy day comes.

I used to work for a company that manufactured medical equipment, and we relied on parts coming from Canada, Asia and Germany. If we never kept emergency stock and just ordered as we needed it, we would have a lot of downtime in production. The fact is even with emergency stock we still ran out when things really hit the fan with our overseas suppliers, which did happen from time to time.

It's a frustrating business manufacturing in this country.

But that is with a supplier overseas, not one down the road!!

[SB076]

Hope it gets resolved soon.

I doubt Ford would take over CMI. In the past Ford manufactured everything on site. Now they just focus on building cars, they bring a lot of the components in from suppliers and assemble.

As for JIT its considered worlds best practise - good for cash flow. it can work well and often does, although situations like this will cause problems. There is usually a buffer stock, however it doesnt take long to exhaust that. JIT is all about getting as much cost out of the process as possible. Every sq meter of floorspace costs money, therefore every sq meter needs to generate a return (obviously not all of it does) Stock sitting there is cash just lying around,

For JIT to work well you need good levels of communication.

[Dr Smith]

Originally Posted by mik

i`d be pretty annoyed with 150k owed.

As would all of us. However as a landlord once under administration I'm sure rent payments of some sort would start again, actually it has to if the administrators are to control the company or close it down. Some pragmatism needs to take over here. If not the landlord will get nothing on top of the $150k already lost so let the factory start up again, try and get something working with the administrators and hopefully Ford can also avoid shutting down their production.

[Polyal]

Originally Posted by Mr Hardware

A JIT policy is fine, just so long as there isn't a single point of failure in the supply chain.

Im not a big fan of JIT, even before this, sure you dont want to have alot of stock laying around but surely you would keep say 2 weeks of common parts ready for something like this, or a natural disaster that say stops a supplier.

You are at their mercy, including unions if they want to crack the sads and get a point heard.

Hopefully its sorted soon.

[Stefan]

Is it a coincidence that the supplier supplies/supplied Territory suspension parts....has Ford not paid the supplier due to the ball joint recall?

Probably alot more to this story than meets the eye....

[davenl5l]

Originally Posted by BroadyFord

Ford may be forced into shutdown


http://www.theage.com.au/national/fo...423-1xhfx.html

VICTORIA'S car manufacturing industry is facing a fresh crisis with a crucial components supplier to Ford likely to go into administration today - forcing the car maker to start standing down hundreds of staff from Thursday.

It comes as 350 workers sacked by Toyota last week plan to gather in protest at its Altona plant this morning, with their union expected to accuse the car maker in the Federal Court of targeting shop stewards and health and safety representatives when deciding who to fire.

CMI Industrial makes suspension components that are supplied to Ford. Yesterday, just as Ford was launching its new four-cylinder Falcon, CMI appeared all but certain to go into administration this afternoon, leaving about 200 employees in limbo.

It will also leave Ford unable to source key parts for its Falcons, Falcon utes and Territory vehicles.

''Our stock is OK through at least most of Thursday,'' Ford spokeswoman Sinead Phipps said yesterday. But she warned that if CMI could not continue supplies, Ford would have to halt production until a solution was found.

A shutdown would involve Ford's Geelong and Broadmeadows plants, with workers likely to be put on half-pay. Ms Phipps said she expected the situation to be resolved soon.

Ford is understood to have injected money into CMI in the past but is now unwilling to bail out the company unless substantial restructuring occurs.

Since December, CMI has failed to pay all the rent on its Campbellfield plant. On Friday, the landlord changed the locks on the plant's gates and demanded $116,000 in unpaid rent. It left about 100 workers locked out.

CMI has four factories in Victoria, at Campbellfield, Footscray, Ballarat and Horsham. It also has a factory in Toowoomba, Queensland. It employs at least 200 people nationally.

Steve Dargavel, state secretary of the Australian Manufacturing Workers Union, said his members simply wanted the
landlord at Campbellfield to end the lockout so they could return to work. He said CMI had been under financial pressure for some time.

The company has had a restructuring proposal before the state government for several weeks, which would require hundreds of thousands of taxpayer dollars to be pitched in.

Manufacturing Minister Richard Dalla-Riva confirmed the government had been talking to CMI about its financial difficulties. He said the government was ready to assist the company in restructuring.

But opposition manufacturing spokesman Adem Somyurek said the government was not acting, and the car sector was paying the price for its lack of direction. ''The government's hands-off-the-wheel approach is just not working,'' he said.

The AMWU's lawyers, Maurice Blackburn, are today expected to file documents in the Federal Court accusing Toyota of targeting union officials in last week's forced redundancies. Toyota selected workers for redundancy by ranking them out of five across nine criteria.

The union will allege ''adverse action'' was taken by Toyota, because of the number of shop stewards and health and safety representatives forced to take packages. A Toyota spokeswoman said she could not comment until documents had been filed in court.

The federal Fair Work Act allows employees to take action against an employer who they believe unfairly targeted them because they were union representatives.

It wasn't all bad news in the state's automotive industry yesterday. Parts manufacturer APV Automotive Components in Coburg went into receivership earlier this month. Yesterday, receivers PPB Advisory announced the company would trade on, with 34 of its 126 staff taking voluntary redundancies.

instead of a bailout ford should just buy up the company cheap restructure it themselves call it a ford plant & be done with it

[jpd80]

Originally Posted by davenl5l

instead of a bailout ford should just buy up the company cheap restructure it themselves call it a ford plant & be done with it

Ford has supported this supplier in the past but now insist on major restructuring before they invest a dime..
It would be crazy to loan them money if they are indeed teetering on the edge and asking the Vic government for support..

[TMC]

Ford should loan them $150000 and get CMI to work the debt off by a discount on parts price to Ford. In the meantime the real problem should be fixed by CMI and Ford should try not to put all its eggs in one basket. Not easy of course in this country where manufacturing is on the decline. There maybe no one else.

[Cúl-Báire]

Originally Posted by davenl5l

instead of a bailout ford should just buy up the company cheap restructure it themselves call it a ford plant & be done with it

Not that simple in reality unfortuantly, with auditing, investment risk profiling, financing approval, etc.. needing to be proformed along with board approval and so on likely to take months!

[Franco Cozzo]

Example, we use JIT at work, we know when all our work comes in the door as its all contracted, we know when the vans will show up.

We run out of consumables all the time, like cable ties, nuts, bolts, electrical tape, solder, wires, split tubing etc because they don't want to hold many in stock which holds up the build.

We run out of cable ties, we can't put the loom in the van.

We ran out of wiring looms, there is a big lead time because they come from China, the build stops.

We recieve cable ties, but no loom.

They messed up an order sent the wrong LED lights to us, just blue ones, so the rear light pods are going up on the car, without any reverse cameras, and LED lights on them, once that rear light pod is on the car, it becomes difficult to put the lights on straight, costing time.

We've run out of light bars, so they put the front pod on the roof, which is now going to make it extremely difficult to mount the light bar to it as its on the car.

We ran out of floors to put in the vans.

We get floors, but we run out of body filler and hardener to bog them up with.

A supplier has issues getting components for our CANBUS modules which runs the entire system, the build stops.

It clearly isn't being run right for us.

We know we've got X amount of cars coming, we know when the vans will turn up at our workshop, we know exactly how many looms we need, how much of X, Y and Z items, why can't we hold the very important things in stock and maybe an extra few?

Not only that, but a lot of things have to have some preparation before they can go onto the vehicle, if you're ordering things as the vans come into the workshop, you're not allowing for preparation time, we had one batch go through where we had everything on hand, there was a team of guys preparing everything, so the cars came in and they actually went out BEFORE the deadline, not 250 hours + afterwards.

We probably spend more than 50% of our time trying to work around not having anything, trying to be organised into doing other work that could be done, which ends up causing hassles later on down the trackm costing more time.

When those parts do come in eventually we get pumped and pumped to hurry up, then the end product is not acceptable, so the customer knocks it back, then you spend more time fixing it up.

Then you have cost cutting measures, cutting corners here and there, one of the customers said the competitors vehicles are actually now better quality after their complete restructure.

[svo supporter]

Originally Posted by TMC

Ford should loan them $150000 and get CMI to work the debt off by a discount on parts price to Ford. In the meantime the real problem should be fixed by CMI and Ford should try not to put all its eggs in one basket. Not easy of course in this country where manufacturing is on the decline. There maybe no one else.

Unfortunately the suppliers are squeezed financially by the car manufacturers, so their cars can can be sold as cheap as possible to compete with the imports. So question begs, where is the discount going to come from? Employees wages, as that's really the own option, but not a real good one.

[svo supporter]

Originally Posted by Mr Hardware

A JIT policy is fine, just so long as there isn't a single point of failure in the supply chain.

Got that right. No system is perfect and having free floor space in the manufacturing plant, means more area to be utilized with production.

So yes I agree with this statement

[TMC]

Originally Posted by svo supporter

Unfortunately the suppliers are squeezed financially by the car manufacturers, so their cars can can be sold as cheap as possible to compete with the imports. So question begs, where is the discount going to come from? Employees wages, as that's really the own option, but not a real good one.

Then they're in trouble. I sympathise with them. I've been in a similar situation. I worked for a previous employer that was a manufacturer as I mentioned before and our client was effectively the government. They squeezed us on all sides. We worked for peanuts. We shut shop. The business had been running since 1948 and shut in 2008.

It's a very cruel world.

[Romulus]

Originally Posted by TMC

Ford should loan them $150000 and get CMI to work the debt off by a discount on parts price to Ford. In the meantime the real problem should be fixed by CMI and Ford should try not to put all its eggs in one basket. Not easy of course in this country where manufacturing is on the decline. There maybe no one else.

Begs the question though if the government can throw $245 million at Holden surely the government can throw $0.150 million at CMI.......

[TMC]

Originally Posted by F6 Concorde

Begs the question though if the government can throw $245 million at Holden surely the government should through $0.150 million at CMI.......

That's probably their only hope. But from experience, unless you are a BIG company, the government does not step in to unnaturally control "market forces". I don't agree with that approach BTW. Someone needs to bail them out. For the sake of a measly $150000, numerous employees can be kept off social security. It sounds like CMI has other issues though, namely profitability.

[Romulus]

I think the government should be compelled to act; it gave GM-H a massive lifeline by means of a $245 million donation. They may as well give Ford the $0.150 million as a grant, Ford can then pay CMI.

The federal government cannot afford the political fall-out if Ford starts to lay off workers due to production issues.

[burnz]

Originally Posted by F6 Concorde

I think the government should be compelled to act; it gave GM-H a massive lifeline by means of a $245 million donation. They may as well give Ford the $0.150 million as a grant, Ford can then pay CMI.

The federal government cannot afford the political fall-out if Ford starts to lay off workers due to production issues.

what lifeline did holden get?

will govco get its money back from CMI??

[TMC]

Originally Posted by burnz

what lifeline did holden get?

will govco get its money back from CMI??

Maybe not, but they've more to lose if they don't hand it over to CMI.

[Shonky.]

Just because the reported outstanding amount is $150,000 doesn't mean that is all that is needed to get back into the black

[burnz]

Originally Posted by shonkymofo

Just because the reported outstanding amount is $150,000 doesn't mean that is all that is needed to get back into the black

thats a point, only 150k for rent.
holiday pay, super, tax, suplier who supplie's them.. ect ect...

[Road_Warrior]

Originally Posted by Big Damo

Example, we use JIT at work, we know when all our work comes in the door as its all contracted, we know when the vans will show up.

We run out of consumables all the time, like cable ties, nuts, bolts, electrical tape, solder, wires, split tubing etc because they don't want to hold many in stock which holds up the build.

We run out of cable ties, we can't put the loom in the van.

We ran out of wiring looms, there is a big lead time because they come from China, the build stops.

We recieve cable ties, but no loom.

They messed up an order sent the wrong LED lights to us, just blue ones, so the rear light pods are going up on the car, without any reverse cameras, and LED lights on them, once that rear light pod is on the car, it becomes difficult to put the lights on straight, costing time.

We've run out of light bars, so they put the front pod on the roof, which is now going to make it extremely difficult to mount the light bar to it as its on the car.

We ran out of floors to put in the vans.

We get floors, but we run out of body filler and hardener to bog them up with.

A supplier has issues getting components for our CANBUS modules which runs the entire system, the build stops.

It clearly isn't being run right for us.

We know we've got X amount of cars coming, we know when the vans will turn up at our workshop, we know exactly how many looms we need, how much of X, Y and Z items, why can't we hold the very important things in stock and maybe an extra few?

Not only that, but a lot of things have to have some preparation before they can go onto the vehicle, if you're ordering things as the vans come into the workshop, you're not allowing for preparation time, we had one batch go through where we had everything on hand, there was a team of guys preparing everything, so the cars came in and they actually went out BEFORE the deadline, not 250 hours + afterwards.

We probably spend more than 50% of our time trying to work around not having anything, trying to be organised into doing other work that could be done, which ends up causing hassles later on down the trackm costing more time.

When those parts do come in eventually we get pumped and pumped to hurry up, then the end product is not acceptable, so the customer knocks it back, then you spend more time fixing it up.

Then you have cost cutting measures, cutting corners here and there, one of the customers said the competitors vehicles are actually now better quality after their complete restructure.

Sounds like the management of your organisation couldnt organise a bunfight in a bakery if they can't even get their own inventory levels right. Sounds like a management change is in order.

[svo supporter]

Good chance some independant company will advise on a restructure of the business to make it a profitable proposition, so Ford don't have to stop production for too long.

If that doesn't happen, surely Ford will find another supplier to keep the ball rolling.

Of couse this is all speculation on my behalf, so time will tell what actually happens