FORD is to close down its Australian car-making operations until next Wednesday

[superroo]

Originally Posted by Road_Warrior

Why would Ford own the tooling of another company? And if they did, it would be one less problem to overcome if they wanted to take over the operation, not an additional problem.

The car makers pay for the tooling upfront before the model get's released, that way they own the tooling and can switch suppliers as they want (outside of contracts though).

The problem is, if ford already own the most expensive things in the place (next expensive being unpaid rent), what's the incentive to take the debt on?

[HUNTER8]

Originally Posted by superroo

The problem is, if ford already own the most expensive things in the place (next expensive being unpaid rent), what's the incentive to take the debt on?

Don't think that is correct.
CMI Limited (ASX:CMI) today announces that the $17 million vendor loan
advanced by it to CMI Industrial Pty Ltd (Industrial) which was due for repayment on 16 October 2011 has not been repaid. The loan was advanced to Industrial in connection with the sale of CMI's former engineering business as was announced to the market on 18 February 2008.
The loan was originally due for repayment on 16 April 2011 but, as was announced to the market on 18 April 2011, the date for repayment of the loan was extended to 16 October 2011.
(http://media.wotnews.com.au/asxann/01228917.pdf )
Seems rent might have just been a minor issue..........

[Road_Warrior]

Oh snap!

[Stefan]

Originally Posted by Barraxr8

Rubbish !

Manufacturing in this country is struggling, especially component suppliers to the Automotive industry due to reduced volume from the 3 local Automotive manufacturer's.

Ford Australia is profitable and pay's it's bills as required.

I dare say you don't know what you're talking about

Really? This is not Ma and Pa Kettle or Barra XR8 buying a rotten apple at Wollies.

CMI supply suspension parts for Territories, these are currently under recall for ball joints. I'm certain supply contracts would contain damages clauses, ie in the event of a recall the rectification costs can be passed on to the supplier like CMI. This would be enough to with hold payment until rectification or at least the "dispute" is complete.

Might be a coincidence but I doubt it.

[Paxton]

Originally Posted by Stefan

Really? This is not Ma and Pa Kettle or Barra XR8 buying a rotten apple at Wollies.

CMI supply suspension parts for Territories, these are currently under recall for ball joints. I'm certain supply contracts would contain damages clauses, ie in the event of a recall the rectification costs can be passed on to the supplier like CMI. This would be enough to with hold payment until rectification or at least the "dispute" is complete.

Might be a coincidence but I doubt it.

There are a few people here on AFF that I wouldn't question about Ford and their local Operations. Barraxr8 is one of them.

[Dr Smith]

Originally Posted by Stefan

Really? This is not Ma and Pa Kettle or Barra XR8 buying a rotten apple at Wollies.

CMI supply suspension parts for Territories, these are currently under recall for ball joints. I'm certain supply contracts would contain damages clauses, ie in the event of a recall the rectification costs can be passed on to the supplier like CMI. This would be enough to with hold payment until rectification or at least the "dispute" is complete.

Might be a coincidence but I doubt it.

This would be true if the CMI part was faulty or non-spec however this isn't the case and by going to a "compression" style ball joint from SYII onwards was how the problem was rectified. Not CMI's fault in the ball joint case.

[Franco Cozzo]

Originally Posted by Barraxr8

Rubbish !

Manufacturing in this country is struggling, especially component suppliers to the Automotive industry due to reduced volume from the 3 local Automotive manufacturer's.

Ford Australia is profitable and pay's it's bills as required.

I dare say you don't know what you're talking about

We had a meeting this morning, a quite serious one saying we're on our way to losing our contracts to our competitor, because they're putting out a better quality product, and our client is sick of our quality issues.

It all started when we sacked our fabricating business and started getting furniture from China, we spend lots of time re-working it, its making the whole vehicle build take much longer, the car is coming out crappier, we're taking short cuts here and there to save time, cheaping out on the little things, for example its taking our reverse camera monitor, 10 seconds to come on when you select reverse because we opted for the cheapest model and they didn't like that.

The doors on the cabinets have massive gaps in them because they arent made properly, they rattle when you drive, there are 4 or 5 different shades of white on the furniture inside the vehicle and their powercoating is crap.

We've lost 50% of the contract to our competitor, who are delivering MUCH better quality vehicles and they manufacture all their furniture here in Australia, they actually support the little manufacturing workshops etc.

We're in manufacturing, which is basically the Titanic here in Victoria and instead of supporting Australians who are also in the manufacturing industry, we're supporting the Chinese who are sending us a crap product, which in the end cost us a lot of business. It would have been cheaper to be supporting our own people, even if it did cost more for labour and materials, because we'd still have the majority of not all of the contract.

We spend more time re-working crap from China, which would have been alright in the first place if we made it here. In the end it still looks like *** anyways.

Death by KPI, cheap out on everything, looks great on paper, unfortunately its backfired big time and they're playing the blame game now.

If we lose the contract, its game over for us in Victoria, might see us on the news too.

[olds]

This problem has only arisen from ford outsourcing parts manufacturing . If they want to be assured of supply they should make the parts in house . But then of coarse they would have to pay decent wages and we cant have that now can we . You have to laugh at these large companies they want everything for nothing , wont pay their bills for 120 days the sook when there is quality issues and lack of supply and its all their own making.

[GasoLane]

The main blame for this should lie squarely with Ford (and all other multinational companies) that decided a while ago that they can cut down on storage space by using the "Just In Time" system.

This basically means that Ford/GMH/Coles/Woolworths etc store nothing on their premises but get deliveries on a daily basis.

If the supplier has a malfunction everything comes to a grinding halt thanks to some bean counters wanting to make bottom line look better.

[Fordman1]

Originally Posted by Big Damo

We had a meeting this morning, a quite serious one saying we're on our way to losing our contracts to our competitor, because they're putting out a better quality product, and our client is sick of our quality issues.

It all started when we sacked our fabricating business and started getting furniture from China, we spend lots of time re-working it, its making the whole vehicle build take much longer, the car is coming out crappier, we're taking short cuts here and there to save time, cheaping out on the little things, for example its taking our reverse camera monitor, 10 seconds to come on when you select reverse because we opted for the cheapest model and they didn't like that.

The doors on the cabinets have massive gaps in them because they arent made properly, they rattle when you drive, there are 4 or 5 different shades of white on the furniture inside the vehicle and their powercoating is crap.

We've lost 50% of the contract to our competitor, who are delivering MUCH better quality vehicles and they manufacture all their furniture here in Australia, they actually support the little manufacturing workshops etc.

We're in manufacturing, which is basically the Titanic here in Victoria and instead of supporting Australians who are also in the manufacturing industry, we're supporting the Chinese who are sending us a crap product, which in the end cost us a lot of business. It would have been cheaper to be supporting our own people, even if it did cost more for labour and materials, because we'd still have the majority of not all of the contract.

We spend more time re-working crap from China, which would have been alright in the first place if we made it here. In the end it still looks like *** anyways.

Death by KPI, cheap out on everything, looks great on paper, unfortunately its backfired big time and they're playing the blame game now.

If we lose the contract, its game over for us in Victoria, might see us on the news too.

I hear what you're saying, I've seen a lot of it where I am.

Some "bright spark" in purchasing decides money can be saved by sourcing from China instead of from the long term local supplier.

The parts come in Ok, but the "total cost" of landing the newly sourced parts ends up costing more than before

Manufacturing really is a "mugs game" here in Oz.

IMO it is dead (or maybe on life support for a few years before if finally expires) !!

Don't blame the "big guys", they are trying to "stay alive" also.

[spud027]

real shame to see..

[turbodewd]

This thread reminds me of the Toyota philosophy:

Quality first, profits later.

American philosophy is about lowest cost.

They both manage to sell products of course...but if you sell an inferior product for a cheap price once...you will lose the customer on the 2nd purchase.

Its so easy in this world - copy best practise:

Apple
McDonalds
Coca Cola
Toyota

[Joe5619]

Originally Posted by GasOLane

The main blame for this should lie squarely with Ford (and all other multinational companies) that decided a while ago that they can cut down on storage space by using the "Just In Time" system.

This basically means that Ford/GMH/Coles/Woolworths etc store nothing on their premises but get deliveries on a daily basis.

If the supplier has a malfunction everything comes to a grinding halt thanks to some bean counters wanting to make bottom line look better.

When was the last time this happened?? I can’t remember myself. Those bean counters have saved Ford MILLION & MILLIONS of dollars by not holding wasted un-need stock. Ford has so many down days coming up that will now just be cancelled, means this down period will cost for NOTHING.. I repeat, this will cost Ford NOTHING. So the bean counters have saved money for years by not storing waste & this has costed themselves nothing right now.. The only people having problems with this is people who do not understand the savings that are being made by JIT!!! The saveing those bean counters are making might just be the only thing keeping Ford profitable for all we know!!

[HUNTER8]

Originally Posted by turbodewd

This thread reminds me of the Toyota philosophy:

Quality first, profits later.

American philosophy is about lowest cost.

They both manage to sell products of course...but if you sell an inferior product for a cheap price once...you will lose the customer on the 2nd purchase.

Its so easy in this world - copy best practise:

Apple
McDonalds
Coca Cola
Toyota

Glad you quoted Toyota as best practice.
You do understand that the JIT system is also know as the "Toyota Production System"??

[Charliewool]

Originally Posted by turbodewd

This thread reminds me of the Toyota philosophy:

Quality first, profits later.

American philosophy is about lowest cost.

They both manage to sell products of course...but if you sell an inferior product for a cheap price once...you will lose the customer on the 2nd purchase.

Its so easy in this world - copy best practise:

Apple
McDonalds
Coca Cola
Toyota

How true!... Reminds me of the old adage...

"The bitter taste of poor quality lingers long after the sweet taste of low price is forgotten"

[Gobes32]

The japanese invented "just in time", and it works. If Ford kept going the way they used to, they would have gone bust years ago. Henry Ford may have invented the production line, but the japanese turned it into a work of art.

[Racecraft]

Originally Posted by Gobes32

The japanese invented "just in time", and it works. If Ford kept going the way they used to, they would have gone bust years ago. Henry Ford may have invented the production line, but the japanese turned it into a work of art.

and in theory it is a beauty.... add in we are 20 times as large and on an island in the middle of nowhere....the system fails logistically... we can't ship the parts and recieve parts "same day"

[Road_Warrior]

Originally Posted by GasOLane

The main blame for this should lie squarely with Ford (and all other multinational companies) that decided a while ago that they can cut down on storage space by using the "Just In Time" system.

This basically means that Ford/GMH/Coles/Woolworths etc store nothing on their premises but get deliveries on a daily basis.

If the supplier has a malfunction everything comes to a grinding halt thanks to some bean counters wanting to make bottom line look better.

Why is it Ford's fault of a 3rd party supplier can't operate its business profitably? There are too many middle men and middle businesses in this whole "supply chain" deal adding their profits and unit costs for every set of hands each part goes through.

[Polyal]

Originally Posted by Racecraft

and in theory it is a beauty.... add in we are 20 times as large and on an island in the middle of nowhere....the system fails logistically... we can't ship the parts and recieve parts "same day"

agreed, we are just not that flexible...and then you add in the fact these parts are FoA unique...I dont think they should stock months worth, but atleast have a week back up.

Guess thats why they get paid the big bucks

[Bossxr8]

Originally Posted by Stefan

Really? This is not Ma and Pa Kettle or Barra XR8 buying a rotten apple at Wollies.

CMI supply suspension parts for Territories, these are currently under recall for ball joints. I'm certain supply contracts would contain damages clauses, ie in the event of a recall the rectification costs can be passed on to the supplier like CMI. This would be enough to with hold payment until rectification or at least the "dispute" is complete.

Might be a coincidence but I doubt it.

They don't make the ball joints AFAIK, and it was Fords design fault that caused the ball joint failures, not the quality of the ball joints themselves, so its irrelevant anyway.

Why do some people feel the need to try to find ridiculous reasons to blame Ford because an outside supplier can't pay their bills. Ford pays theirs, and they have given money to CMI in the past to help keep them going, so why should they keep doing it unless they have a proper plan to keep the business a profitable and going concern. Ford has forked out millions in the past couple of years to keep some of their suppliers in business, APV for one to keep the supply of LPG tanks coming in.

Thats why Ford baulked at giving them money again, they wanted the recievers to come in and restructure the business to keep it viable, rather than just throwing more cash at a poor business model that isn't working.

And then they critisize Ford for using JIT and that they should do what Toyota do cause its a better system, when it was actually Toyota that created JIT, and Ford has based most of their production principals of Toyotas.

[Polyal]

Everyone (well I believe) in auto uses JIT, but I find it hard to believe that all this nonsense, along with down days for it, staff pay at 50% with nothing being made/sold is cheaper than stocking vital parts that are outsourced.

Like I said, you dont stock a months worth, just a few days or a week, atleast then you have some flexibility.

From an outsiders point of view, because I am not an accountant nor overly care, it seems odd that all can stop because of something like this.

So IMO its bad planning somewhere along the line, it couldnt have been a surprise.

[Chopped]

http://www.abc.net.au/news/2012-04-2...ction=business

"Settlement allows Ford supplier to reopen doors
Updated April 27, 2012 19:26:23

The receivers of parts-maker and Ford supplier CMI have brokered an out-of-court settlement with the plant's landlord, so they can take possession of the building.

The receivers took the court action to force the company's landlord to open the company's factory in Campbellfield, Victoria.

Workers had been locked out of the CMI plant all week over a rental dispute.

Ford was forced to halt production at its Geelong and Broadmeadows plants when it ran out of parts from the supplier on Thursday.

CMI provides suspension parts to Ford, and the car maker has had to stand down 1,800 employees as a result of the closure.

CMI's receiver says the manufacturer will not be resuming production until Monday morning.

CMI will need to be operating for at least 24 hours before Ford can reopen, leaving operations at the Ford plant on hold until Wednesday."

[Jason[98.EL]]

Originally Posted by Chopped

http://www.abc.net.au/news/2012-04-2...ction=business

"Settlement allows Ford supplier to reopen doors

The receivers of parts-maker and Ford supplier CMI have brokered an out-of-court settlement with the plant's landlord, so they can take possession of the building.

The receivers took the court action to force the company's landlord to open the company's factory in Campbellfield, Victoria.

Workers had been locked out of the CMI plant all week over a rental dispute.

Ford was forced to halt production at its Geelong and Broadmeadows plants when it ran out of parts from the supplier on Thursday.

CMI provides suspension parts to Ford, and the car maker has had to stand down 1,800 employees as a result of the closure.

CMI's receiver says the manufacturer will not be resuming production until Monday morning.

CMI will need to be operating for at least 24 hours before Ford can reopen, leaving operations at the Ford plant on hold until Wednesday."

thats great news

I heard it on the news earlier but only caught the end of it so was not sure if I heard right

[Jason[98.EL]]

.more on it here

Originally Posted by ninemsn

Victoria's stalled car-making industry has won a reprieve with a key Ford parts supplier set to resume operations on Monday after the factory's landlord agreed to hand over the keys.

About 80 workers who've been locked out of CMI Industrial's Campbellfield factory for the past week can return to work, after receivers for the company convinced the site's landlord, Garshaw Pty Ltd, to reopen the factory ahead of a Federal Court hearing in Melbourne on Friday.

Garshaw changed the locks at the site a week ago, claiming CMI owed more than $116,000 in unpaid rent.

Ford has been forced to stand down 1800 workers until Wednesday as a result, after it ran out of suspension arms it relies on CSI to provide for its cars.

Administrators and receivers took control of the cash-strapped CMI Industrial on Thursday, and after initial talks with the landlord failed, launched Federal Court action on Friday in a bid to gain access to the site.

But a deal struck at the eleventh hour between lawyers for the landlord and the receivers saw the scheduled court hearing adjourned.

Ford welcomed the news on Friday, saying the deal would ensure its 1800 workers could return to work on Wednesday as hoped.

"It's obviously good news.... What it means for us is we'll definitely be sending staff back to work on Wednesday," Ford spokeswoman Sinead Phipps said.

Receivers have been handed the keys and alarm codes to the factory, and planned to enter the site on Friday evening to begin taking stock of the company.

The Australian Manufacturing Workers Union's Leigh Diehm said the plant's workers would be relieved, and that all were likely to return at 7am Monday.

"They'll be happy with the result from today. There's still a long way to go yet obviously. We need to have further discussions and the company is still in administration," Mr Diehm told reporters outside court.

"But I'm sure with this result at least workers will be able to get back to work at the latest by Monday and they'll be happy with that result."

CMI Industrial's future remains unclear, with the AMWU saying receivers had already indicated they would likely need to slash some of its 400-strong Australian workforce and liquidate assets to save the company.

Counsel for receiver McGrathNicol, Philip Crutchfield SC, and Barrister Phil Corbett, for the landlord, stalled court proceedings for more than an hour and a half as they asked Federal Court Justice Christopher Jessup to stand the matter down to give them time to negotiate a deal.

When the hearing resumed, Justice Jessup was told Garshaw had agreed to allow access to the factory, and adjourned the matter until a date to be confirmed.

more to come on it though by the looks

[Bossxr8]

Originally Posted by Polyal

Everyone (well I believe) in auto uses JIT, but I find it hard to believe that all this nonsense, along with down days for it, staff pay at 50% with nothing being made/sold is cheaper than stocking vital parts that are outsourced.

Like I said, you dont stock a months worth, just a few days or a week, atleast then you have some flexibility.

From an outsiders point of view, because I am not an accountant nor overly care, it seems odd that all can stop because of something like this.

So IMO its bad planning somewhere along the line, it couldnt have been a surprise.

I think they must have supply levels higher than you think, because CMI did not make any parts since last week, yet Ford only ran out on Thursday, which means they had at least 3 days supply in advance, if not more.

Ford had been monitoring the situation since last week.

[GasoLane]

Originally Posted by Joe5619

Those bean counters have saved Ford MILLION & MILLIONS of dollars by not holding wasted un-need stock. Ford has so many down days coming up that will now just be cancelled, means this down period will cost for NOTHING.. I repeat, this will cost Ford NOTHING.

I'm sure the 1,800 people sitting at home (without pay?) will think of this when trying to pay their bills.

[gtxb67]

Originally Posted by GasOLane

I'm sure the 1,800 people sitting at home (without pay?) will think of this when trying to pay their bills.

true, but without cost saving measure in place, they might have lost their jobs a long time ago anyway

[Bossxr8]

Originally Posted by GasOLane

I'm sure the 1,800 people sitting at home (without pay?) will think of this when trying to pay their bills.

Ford could not care less what happens to the production workers, but if something like this was to happen to management and they lost money you can gaurantee there would be hell to pay.

They didn't even bother giving even the slightest update what was happening to the workers until the last minute, everything else they had to watch the news to find out. The company is a mere shadow of what it used to be, and has significantly changed for the worse.

[Joe5619]

Originally Posted by GasOLane

I'm sure the 1,800 people sitting at home (without pay?) will think of this when trying to pay their bills.

You dont get it!! These day downs have just replaced ones that where already planned & now cancelled.. So, the workers too have lost NOTHING!!!

It is not a hard to understand, why are people struggling with this??


The bigger issue is why does Ford need so many down days.. This is the real problem!!

[Franco Cozzo]

Originally Posted by Bossxr8

Ford could not care less what happens to the production workers, but if something like this was to happen to management and they lost money you can gaurantee there would be hell to pay.

They didn't even bother giving even the slightest update what was happening to the workers until the last minute, everything else they had to watch the news to find out. The company is a mere shadow of what it used to be, and has significantly changed for the worse.

The issue I have with treating floor staff like crap is that if you demoralise them, they end up with IDGAF attitude towards everything, and pretty much just turn up for the pay check. If you treat them well, it might cost you a few BBQs and some meetings telling everyone you appreciate what they do, but they tend to have a better attitude towards work and you end up with a better product.