Australian Car Industries Uncertain Future - Car Parts Firm Closes, 300 Lose Jobs

[JoeT]

Car Parts Firm Closes, 300 Lose Jobs

AAP
12 February 08
www.drive.com.au

Australia's largest car parts distributor has gone into liquidation, putting 300 people out of work.

Staff at National Parts plants in Melbourne, Sydney, Brisbane, Adelaide, Perth and Newcastle were told the company was performing too poorly to continue trading and could no longer offer employment.

The company is a wholly owned subsidiary of Automotive Components Limited (ACL) and employs 300 staff around Australia.

Liquidator KordaMentha issued a statement saying the administrators had no choice but to cease trading.

"The viability of the company has been fatally wounded by high operating costs, a general economic tightening and continued decline in the parts industry," KordaMentha spokesman Craig Shepard said.

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[Zomsky]

In my job I am a direct competitor of these guys, and it is a sad day for our industry. With so many jobs dissapearing it is frightening. I feel for they many quality employees that will be out in the cold. There is no chance that the industry has the cappacity to absorb any of the employees displaced.
Many of these people have decades of experience, and will find it hard to find employment in any like industry. As the Aftermarket parts industry is also chronically underpaid, many of these older employees will have very few benefits to fall back on.
The other problem is that of supply to the thousands of independent retailers nation wide. The remaining few wholesalers will have the ability to supply intermittently, but ultimately the slack will have to be absorbed.
Decades of over service and low margin have taken it's toll on the aftermarket industry.
Despite considerable consolidation of the Automotive Aftermarket in recent years, increased competition brought about by a raft of cheap imports have encouraged a price war between major wholesalers nation wide. Persistent discounting to resellers, especially Independent retailers competing on price point alone, has slashed margins across the industry.
Low margins, alongside spiralling costs associated with servicing accounts receivable, have ultimately brought down the weakest of the big four Wholesalers in Australia.
Perhaps this jolt may encourage the industry to re-assess the costs of operating the aftermarket. Margins will need to be increased to ensure survival. This may also assist in the employees of the aftermarket in earning what they are worth.
Ultimately, this will result in higher prices to the consumer, especially second and third tier buyers. Coupled with the ever increasing competitiveness of Genuine Parts supplied by new car manufacturers, the Aftermarket is in for a bumpy few years.

In the interim, all of you car enthusiasts; back yarders, mechanics and workshops alike, please be patient with your local parts guy!!!