Melbourne manufacturing company Forecast collapses

Australia’s beleaguered manufacturing sector has lost another company, with Melbourne forging factory Forgecast falling into receivership.

According to ASIC documents, the company was placed in administration in mid-November before being placed in receivership after a secured creditor (believed to be owed around $250,000) lost patience with the business.

The company has not been placed in liquidation and a spokesperson for the receivers BDO says they are talking to a possible buyer.

ASIC document show the company has been through a difficult few years. The company was placed in voluntary administration in 2004 and then came out of administration under a deed of company arrangement later that year.

The state secretary of the Australian Manufacturers Workers Union, Steve Dargavel, says 57 of his members have lost their jobs; the receiver has calculated the amount owed to staff for entitlements is $4.4 million.

Many of the dumped workers have now formed a picket line at the factory.

Dargavel says that while the Federal Government’s entitlement guarantee scheme will give workers 16 weeks redundancy pay, some workers are owed 70 weeks pay.

“Some of them have service in excess of 35 years. There are guys there that this has been their only job in their working life,” he says.

But Dargavel says there is no chance of the company being purchased by a new buyer and revitalised.

“It’s inconceivable that without a very significant amount of investment the business is viable. It’s not quite steam powered, but some of the equipment is belt driven. It’s very tough for workers to compete with that sort of equipment.”

Forgecast’s website lists Ian Beynon as managing director. Forgecast’s corporate office was closed this morning.

Receivers Stephen Dixon and Laurie Fitzgerald from accounting firm BDO said the receivers will continue to work with the AMWU “to ensure the best possible outcome for all involved”.

The company’s history dates back to 1949, although the Forgecast organisation was formed in 1995 through a management buyout from the Email Westinghouse group of companies. Since then, Forgecast has established a new manufacturing facility in Tijuana, Mexico to support its US operations.

The company makes door hardware, automotive components, leisure goods, plumbing fittings, industrial valves and fittings, munitions and aerospace components.