Car parts maker collapses as unions deny blocking restructuring deal

Receivers were called in yesterday to take control of APV Automotive Components in Melbourne that supplies fuel fillers, rear suspension parts and other parts to Toyota, Ford and General Motors.

Stephen Longley and Nicholas Martin of PPB Advisory were appointed as receivers and are meeting with the company’s 126 employees at the North Coburg factory today.

Longley said the receivers were holding urgent discussions with customers, employees, the Australian Manufacturing Workers Union (AMWU) and suppliers to try and restructure the business with the objective of resuming operations as soon as possible.

“In the meantime, it has been necessary for the receivers to stand down without paying the company’s employees as there are not sufficient funds for us to meet payroll or other operating costs,” Longley said in a statement.

Last year APV ran a $2 million loss on revenue of about $18 million.

The appointment of receivers has led to bitter disputes between employees, the company and the union with the AMWU accusing the company of trying to blame it for APV’s demise.

The AMWU’s Paul Difelice called for patience regarding the concerns about the closure at APV.

“The union, recievers and the company owners are working together to find a solution, and we’re confident that in time, an outcome that keeps the plant open can be reached,” Difelice said in a statement.  

“We’ve had an issue where the APV Automotive was attempting to cut workers entitlements in half. This issue is about eight months old and will require time to resolve.” 

Difelice said the APV workers were currently paid $18/hour and were prepared to forgo a wage rise as part of the agreement and had also had eight ‘down days’ without pay recently to ensure the companies continual operation.

“These workers are committed to making the company work, as are the union,” said Difelice.

“We are confident from our meeting with receivers that all that can be done to keep these jobs will be done.

“Our intention from here is to have a little patience and explore what options are available with car companies to ensure that we can protect jobs and ensure we keep the skills these workers have in the local industry.”

Richard Reilly, chief executive at the Federation of Automotive Products Manufacturers, told SmartCompany the APV’s failure was linked to the reduction in the volume of Australian made vehicles which had flowed through to the company with a lack of demand for components from the car companies.

Reilly refused to comment on reports that the primary reason for APV’s receivership was the company’s inability to get the workforce to agree to a deal on 25 voluntary redundancies out of a 126 strong workforce.

“I am not going to comment on the relationship between the company and the union, it is not my role to do that,” says Reilly.

“It appears they could not come to an agreement about redundancy issues.”

“We are all aware of the problems in the industry at the moment, the globalisation of the industry, the need to diversify and the need to be competitive throughout the world because it is a global industry, but that does not make it any easier.”

Reilly says it is unclear at this stage whether other component manufacturers are also likely to close.

“Hopefully the receiver [at APV] will be able to trade out of this particular circumstance at the moment, it is uncertain whether other companies will be in the same position going forward.”

Reilly says he does not agree with claims that the Government was to blame for funding large companies while small suppliers are struggling.

“Without the car companies we have not got a components sector and that is pretty clear,” says Reilly.

“We are supportive of government investment within the industry to the larger manufacturers and the components sector as well.”