Australia’s ailing car industry has taken another blow, with Albury manufacturer Drivetrain International Systems falling into receivership with debts of $30 million to $40 million.
Production has been suspended for a week, with the company’s 400 workers stood down. Receivers and manager Stephen Longley from PricewaterhouseCooopers will assess the company’s financial position and attempt to sell the business as a going concern.
Production is expected to resume next week in a reduced form.
The Australian Manufacturing Workers Union expects at least 200 workers will lose their jobs, and are concerned there may not be enough money to pay workers’ entitlements, which are believed to be around $25 million for the entire 400-strong workforce.
DSI has been hit hard by the collapse of Korean car marker SsangYong, not long after DSI had invested heavily in tooling to support its contract with the Korean giant. Customers in India and Russia have also cut back in recent months as the global car industry has stalled.
Ironically, this is not the first time the workers at DSI have been faced with the prospect of losing their jobs. The company was originally part of automotive group Ion, which collapsed in 2004.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
