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Auto leaders broker industry-led deal to bolster confidence.



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Ministers for Innovation, Industry, Science and Research

AUTO LEADERS BROKER INDUSTRY-LED DEAL TO BOLSTER CONFIDENCE

Joint release with Jodie Campbell MP, Federal Member for Bass

A gathering of top level automotive industry leaders has today brokered a solution to bolster confidence in the nation's automotive industry and to keep Tasmanian company ACL Bearings in business.

Innovation Minister Senator Kim Carr said:

"The Federal Government, along with senior representatives from Ford and Toyota, workers and the Australian Manufacturing Workers Union, the Federation of Automotive Products Manufacturers and ACL management have been working overtime to reach a solution for ACL bearings and the broader industry.

"ACL has been facing insolvency as a result of the global recession.

"This is a decision in the national interest. If ACL had collapsed, Ford and Toyota would have been in very difficult circumstances. Thousands of workers would have been stood down and production lines would have halted.

"There would also have been serious flow-on implications for other parts makers, who supply Ford and Toyota.

"The Federal Government has previously approved a grant of $4 million, that will be extended to $7 million after the company applied for the additional funds, under the Automotive Industry Structural Adjustment Program (AISAP).

"The $7 million will be used for a very significant restructuring initiative to take place over the next 3 years, and is conditional on the company making new investments from its own resources and reaching agreed milestones.

"No jobs are expected to be lost at ACL.

"Ford and Toyota have also made significant concessions as part of the industry-led solution.

"Workers have also made considerable sacrifices to ensure the health of ACL.

"The automotive industry is at the epicentre of the global recession, but Australia's industry is doing much better than most.

Innovation Minister > Senator the Hon Kim Carr

Media Release

Senator the Hon Kim Carr

29 Jun 2009

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"Today's announcement illustrates the critical nature of the nation's 200 parts makers. Keeping them healthy is a central part of the Government's $6.2 billion New Car Plan for a Greener Future.

"Today's announcement is about maintaining critical capacity in an industry that is the cornerstone of manufacturing in Australia.

"This is the kind of result we get when the industry and the Government knuckle down and work together to work on the really tough problems," Senator Carr said.

Member for Bass, Jodie Campbell, said:

"This is a great result for Tasmania and the nation.

"280 Launceston families are breathing a sigh of relief at the news ACL will stay in business.

"I have been working very hard to secure the future of ACL, and am very pleased at the cooperative result that has been achieved today," she said.

Media contact: Catriona Jackson, Minister Carr's Office 0417 142 238 Sophie Murphy, Ms Campbell's Office, 03 6334 7033

Statement by Senator Kim Carr Minister for Innovation, Industry, Science and Research

Outcomes of the industry-government meeting on the future of ACL, Melbourne, 29 June 2009

No manufacturing company operates in isolation. Everyone in the supply chain depends on everyone else.

ACL is an absolutely vital part of the automotive supply chain.

Anyone who doubts that should consider the range of people who have thrown their weight behind this company.

We have Ford and Toyota. We have the Federation of Automotive Products Manufacturers. We have the Australian Industry Group. We have the Australian Manufacturing Workers’ Union. We have the Tasmanian Liberal Senators expressing their support.

And we have the Australian Government.

The Tasmanian Government shares our concern, but believes it has exhausted the options available to it. The Commonwealth believes this is an issue of national significance, and we have chosen to act in the national interest.

Why are people taking such a keen interest in the fortunes of a firm in Launceston? Why have they united to develop an industry-led strategy to restructure and revitalise ACL?

Because this company is absolutely critical to the Australian car industry, and ultimately to Australian manufacturing.

Without decisive action, we would see 280 workers lose their jobs in Launceston - workers with an

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average of fifteen years’ service. We would see thousands more stood down around the country as vehicle production ground to a halt. Every other company that supplies the car industry - including service companies - would ultimately be affected.

The immediate challenge is to avert what would be a disaster for Australian industry and working families. The long-term challenge is to ensure that Australia has a strong automotive supply chain.

You cannot have a healthy car industry without healthy suppliers. You cannot expect to attract new international investment in this industry if you lack the critical skills and capabilities needed to build cars. Australia is one of the few countries in the world that can create a car from scratch - and this is an advantage we should never give up without a fight.

The Australian Government’s commitment to this industry has already produced results. Toyota has decided to build the hybrid Camry in Australia. Ford has decided to continue production at its Geelong engine plant. General Motors in the United States has decided that Holden will be an integral part of the new GM.

And all of this has happened at a time when the global recession has hit the car industry hard right around the world.

Our three car makers have demonstrated their confidence in Australia and their commitment to innovation and renewal, but they are only the tip of the iceberg. For every worker in a car factory, there are many more in the supply chain.

That’s why it is so important to build the capacity of our component makers. That’s why the Australian Government intervened last week to facilitate the reorganisation of automotive glass maker CSR Viridian. And that’s why we are joining forces with the industry to help put ACL on a sustainable footing.

Everyone is making a contribution here. Ford and Toyota have provided strong support. The company’s workers have agreed to work a four-day week, which represents a 20 per cent pay cut. They have been doing that since February. The company itself is making a significant investment in innovation and renewal.

And the Australian Government is contributing $7 million from the Automotive Industry Structural Adjustment Program. This program is part of A New Car Plan for a Greener Future. It was set up to ease the process of structural adjustment by working proactively with firms.

ACL will use this money to implement a comprehensive, three-year restructuring plan. The funding is conditional on the company making a substantial new investment from its own resources and achieving agreed milestones. This investment will make the company more competitive and sustainable. No jobs are expected to be lost.

The motor vehicle producers have welcomed ACL’s transformation plan.

I said at the beginning that no manufacturing company works in isolation. Governments do not work in isolation either. We are making this grant because we know the industry is behind ACL. This is very much an industry-led solution.

We are aware of the challenges facing this company, but we are also aware of the enormous contribution the car industry makes to Australian jobs, exports, innovation and prosperity. We are not about to throw that away.

This statement is endorsed by:

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Australian Manufacturing Workers’ Union Automotive Components Limited (ACL) Jodie Campbell, Member for Bass Federation of Automotive Products Manufacturers Ford Motor Company of Australia Toyota Australia

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