Another Auto Parts Supplier Gone

[Nostalgia]

Hi all, you may remember my recent posts about the Downfall of Coghlan Russell Engineering, well now 51 workers and their families face a bleak and un-certainable future as the place is facing shutdown in as little as 3 weeks. No matter what was said in the media, our entitlements are not covered and we are still where we were in the first place.

[charles_wif_xf]

Are you serious? What happened to the rescue package?

[Nostalgia]

Rescue Package was only to keep the business running for 60 days so customers can outsource components. 1 million bux dosent go far when you wager in Administration costs. Legally i cant say anymore.

[charles_wif_xf]

Damn! I really feel for you guys.

[|||]

thats no good. i hope the company directors gets whats coming to them. spending workers entitlements on anything other than the workers is the lowest of the low.

[lotto]

Originally Posted by EAadam

Rescue Package was only to keep the business running for 60 days so customers can outsource components. 1 million bux dosent go far when you wager in Administration costs. Legally i cant say anymore.

What a shame mate,I hare hearing **** like that!

The goverment rescue package and redundancy schemes to a lesser extent,where bought in as a 'slowly sweep it under the carpet ,solution'
there not a total solution ,especially for the grass roots workers,what they do is just take a bit of heat of those in the firing line!!

Once again sorry to hear that,hope it works out mate!

[4.9 EF Futura]

Originally Posted by |||

thats no good. i hope the company directors gets whats coming to them. spending workers entitlements on anything other than the workers is the lowest of the low.

Here, here. Its nothing short of unconscionable and illegal.

EAadam, we all hope that, whatever the outcome, you get the entitlements you deserve. And if worst comes to worst, i hope its not too long before you can get back on your feet and into another job.

[Dave_au]

Originally Posted by |||

thats no good. i hope the company directors gets whats coming to them. spending workers entitlements on anything other than the workers is the lowest of the low.

Is their any proof of that? From what I understood, Ford had the company bent over backwards locked in an unprofitable contract. Im sure EAadam can enlighten us further.

[|||]

Originally Posted by Dave_au

Is their any proof of that? From what I understood, Ford had the company bent over backwards locked in an unprofitable contract. Im sure EAadam can enlighten us further.

if that were the case i blame the directors for signing such a bad contract. if they cant keep the business afloat without dipping into money owed to their workers then they dont deserve to be in business. if my boss used MY super and annual leave to pay his own bills i would be after blood.

[Bud Bud]

Originally Posted by Dave_au

Is their any proof of that? From what I understood, Ford had the company bent over backwards locked in an unprofitable contract. Im sure EAadam can enlighten us further.

Sad to see another one go. Where will it end? I doubt that the directors spent the workers entitlements to keep the company a float, I think you will find that they could not make enough money to put away in the first place and if they did not take the contract under (in this case) Fords terms, they probably would have folded sooner. They would have been in a no win situation. If there was any embezzling or misappropriation of company funds, by the directors, they will go to gaol, simple as that.

Car makers are not blameless either. Anybody that has dealt with them in the past would know that they want blood too! You have to chop back your margins during the life of the contract. If you can't make the part cheaper in the future you are screwed.

This the exact reason why Holden and other car makers are bringing in parts from overseas. Australia just can't compete in this arena anymore and we are kidding ourselves if we think that Ford is not heading in the same direction as Holden. They (Holden) just got there first.

I have seen manufacturing in China and I can tell you from first hand experience that
1) The worker is just glad he has a job no matter how minimal the wage
2) They work in workshops reminiscent of Australia in the 70's (heavy labour content)
3) There is almost no such thing as OH&S

Unfortunately we have ourselves to blame too, because we expect the absolute most from next year’s model but we don’t like to pay for it, generally speaking.

[Vdouw]

Originally Posted by Dave_au

Is their any proof of that? From what I understood, Ford had the company bent over backwards locked in an unprofitable contract. Im sure EAadam can enlighten us further.

Thats the companys fault isn't it. Smart business says run at a profit NOT a loss... mind you it is easier said than done but successful business runs at a profit unless the risk is worth it. You get the same thing in the construction industry with idiots charging patheticlly small hourly rates which drives down the standard thus making life harder for every other tradie. Qualty before quantity and price.

[Dave_au]

Originally Posted by Bud Bud

Sad to see another one go. Where will it end? I doubt that the directors spent the workers entitlements to keep the company a float, I think you will find that they could not make enough money to put away in the first place and if they did not take the contract under (in this case) Fords terms, they probably would have folded sooner. They would have been in a no win situation. If there was any embezzling or misappropriation of company funds, by the directors, they will go to gaol, simple as that.

Car makers are not blameless either. Anybody that has dealt with them in the past would know that they want blood too! You have to chop back your margins during the life of the contract. If you can't make the part cheaper in the future you are screwed.

This the exact reason why Holden and other car makers are bringing in parts from overseas. Australia just can't compete in this arena anymore and we are kidding ourselves if we think that Ford is not heading in the same direction as Holden. They (Holden) just got there first.

I have seen manufacturing in China and I can tell you from first hand experience that
1) The worker is just glad he has a job no matter how minimal the wage
2) They work in workshops reminiscent of Australia in the 70's (heavy labour content)
3) There is almost no such thing as OH&S

Unfortunately we have ourselves to blame too, because we expect the absolute most from next year’s model but we don’t like to pay for it, generally speaking.

Your fairly on the money. There are many risks and threats for businesses both internal or external that can stop even the most successful and profitable business in it's tracks. I don't exactly know the full details of this company, but from what a brief Google search can tell me, the plant closure was mainly due to the downturn in the market for 6 cylinder large cars and the supplier contract with Ford. By the sounds of it, like many supply contracts, the break even point for the company would require a fairly sizable supply to Ford, but in this case, it sounds like the demand for their products has slipped. Meanwhile, they still have their contract obligations with ford, which instead of being profitable to the company, have now become onerous.

In this case, consumer demand in the firm's client's industry has resulted in the eventual downfall of the firm.

As for the comment about super payments - they should be safe, they wouldnt be held by the company, with the exception of perhaps the few since the company had gone into receivership.

[FoMoKid]

Originally Posted by Bud Bud

I have seen manufacturing in China and I can tell you from first hand experience that
1) The worker is just glad he has a job no matter how minimal the wage
2) They work in workshops reminiscent of Australia in the 70's (heavy labour content)
3) There is almost no such thing as OH&S

Unfortunately we have ourselves to blame too, because we expect the absolute most from next year’s model but we don’t like to pay for it, generally speaking.

you can add number 4 to that
4) use cheaper and/or inferior materials to what would be used in Aus manufactoured parts.

Was speaking to a guy who works for a company that makes parts for the big four and he was saying that Toyota do not use any parts that are manufactured in China and their engineers can immediately spot the difference between a local part and a chinese part by the finish and the materials used.

Let's just hope that things get better in Australian manufaturing, it is sad that plants have to shut down leaving families out on their end. Chin up EAadam...

[Nostalgia]

Originally Posted by Dave_au

Is their any proof of that? From what I understood, Ford had the company bent over backwards locked in an unprofitable contract. Im sure EAadam can enlighten us further.

Thanks to all for your kind words. Things are looking real bad for us at the moment. GEERS is the only chance of us recouping any entitlements. As for Ford having us bent over backwards and locked into an unprofitable contract, not true. In August 2005 the Company's major customer, Ford, reported that it had failed to adjust payments to the Company for an 'off-set' of goods provided by Ford. The value of the offset had accrued since around August 2002 and Ford valued its claim at $2.57 million. Basically, the ex-director (as we are now under administration) was charging Ford for the castings aswell as the machining. Ford cast their own engine mounts. This is just one reason of many which had lead to the company's demise.

[fordxrtfan]

Really sorry to hear that mate, hope you and all the other workers get what you are owed & sort things out for your future

[Autocade]

As for the comment about super payments - they should be safe, they wouldnt be held by the company, with the exception of perhaps the few since the company had gone into receivership.[/QUOTE]

This may not be the case.Many Companys administer their own Super funds therefore have access & control over the funds.I understand it is against the Law not to make alloted contibutions but it has been done previously
The only way anomilies are found is if an Auditor reports them
Bear in mind Audits can be as far as 2 years behind current day

Secured creditors will be paid first such as Tax dept & Financial Institutions
AFAIK employess & their entitlements are not classified as secured creditors

Good Luck
Autocade

[Dave_au]

The employee superfund that the company would have to be making contributions would have to be regulated by APRA and the Superannuation Industry Super Regulations, which is quite a complex area of law.

My money would be on an external industry superfund.

[4.9 EF Futura]

Spot on dave

Even if the employer had established its own superannuation fund, it would be a seperate entity, bound by the provisions of the SIS Act and supervised by the good folk at APRA (tee hee). The employer, under taxation law is required to contribute the 9% superannuation guarantee at least quarterly.

Under choice of fund, employee beneifts could be with any number of super funds... i would also guess that the default fund was someone like MTAA.

At the end of the day, super does you no goo duntil you reach retirement age... the question here is where does Eadam's retrenchment payment, accrued leave etc come from...

The only way anomilies are found is if an Auditor reports them
Bear in mind Audits can be as far as 2 years behind current day

Secured creditors will be paid first such as Tax dept & Financial Institutions
AFAIK employess & their entitlements are not classified as secured creditors

Auditors are required to finalise their reports within 3 or 4 months of the balancing date. Altho depends what kind of audit you're talking.

In terms of creditor rankings, assuming the company is liquidated, if someone has a fixed charge over company assets (i.e. if the bank has lent money against the building) then the sale of the asset where the charge exists must be used to repay that secured creditor. That's the nature of having a fixed charge.

Any floating charge, debtors, stock etc is used to pay employee entitlements and receiver costs.

EAdam, might want to have a read of this, although it sounds like you have a good understanding of these issues:

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/Receivership_guide_for_employees.pdf/$file/Receivership_guide_for_employees.pdf

[|||]

you guys are right about the super IF it was paid. my point was that often when companies are going down the tubes they simply stop paying the super as it has less consequences at the time as opposed to stop paying their suppliers. i see a lot of balance sheets in my day, and most companies in trouble have a nice fat liability called "superannuation payable"

[Nostalgia]

Thanks 4.9 EF Futura for the info. Myself and my 50 workmates will be eligible to apply for the Federal Government GEERS Scheme once the Company goes into liquidation. GEERS is the General Employee Entitlements and Redundancy Scheme. It pays up to a maximum of 16 weeks redundancy, annual leave but not sick pay. This scheme also only pays 75 cents in the dollar and can take up to 16 weeks to process any claims.

[Bossxr8]

Is it true that Ford owns most of the tooling and will take it back and use it themselves if CR shuts down?

[Nostalgia]

Originally Posted by Bossxr8

Is it true that Ford owns most of the tooling and will take it back and use it themselves if CR shuts down?

Pretty much so and our other big customer DELPHI also own most of their tooling and will also rip it out as soon as the place goes into liquidation. This includes automated TIG welders, 150t press etc etc. As for Ford, im not sure if they own the NC MAZAK, Miller, Counter Bore etc etc or not but they certainly own the tooling which is sitting inside the NC.

[Nostalgia]

Bottom line is that 51 guys and their families are being screwed by a system that is totally wrong.

[Bill M]

Three years ago the small business I worked for was liquidated, the owner owed the ATO 40 grand and had not payed super as required by law. The GEERS scheme covered my lost holiday pay but thats all. Getting information from the liquidator and GEERS was a long and tedious process. I was lucky, I lost only $2500 mostly super, some lost near $20,000. I hope the process has improved since.
Cheers
Bill.

[Nostalgia]

We have been guaranteed (verbal) that GEERS pays all accrued annual leave and redundancy up to 16 weeks. But in saying that we have been guaranteed alot of things (verbally) and most of it has just been a huge load of you know what. :

[ozfast]

i know this is an old thread but would be interested to find out what actual entitlements you got ? going through the process now :(

[Franco Cozzo]

Originally Posted by Nostalgia

Hi all, you may remember my recent posts about the Downfall of Coghlan Russell Engineering, well now 51 workers and their families face a bleak and un-certainable future as the place is facing shutdown in as little as 3 weeks. No matter what was said in the media, our entitlements are not covered and we are still where we were in the first place.

Did you have an EBA in place? Usually they have all your entitlements paid out into a separate bank, so that the company doesn't start using your money to stay afloat, then you get nothing when they go under.

EDIT: Just seen how old the thread is oops.

[Jason[98.EL]]

As Adam doesn't come here anymore iqt might be a bit hard o get an answer but I believe they got some of their entitlement in late 2009
I will confirm with him when I se him next