The collapse of a major automotive supplier could bring Ford and General Motors' Australian operations to a grinding halt as early as next week.
Australia's Autodom Ltd. was recently forced to close two production plants, which could impact production facility operated by Ford and GM' Holden unit as early as next week. Autodom cited financial problems as the reason for the plant closures.
Although new car sales have been steadily recovering in the United States, Australia's auto industry has struggled to bounce back from the global economic slowdown. The Australian government has tried to prop the industry will billions in aide, but both automakers and suppliers continue to deal with lower demand.
Autodom CEO Calvin Stead says the perfect storm of a strong Australian dollar, high labor costs and overcapacity lead to the company's demise.
Autodom is scrambling to reopen its factories, but the company has indicated that local players have so far been unhelpful in that goal. If no solution is found, it could affect production facilities operated by Ford and GM within a matter of days.
Of the two, Ford would be the hardest hit by a supply issue. Ford relies on Autodom for hundreds of components for its Falcon sedan and Territory SUV.
"We are currently assessing what effect it will have on our production," Ford Australia spokeswoman Sinead Phipps told Reuters. "We are okay until the middle of next week, but if it's not resolved it could potentially affect our production then."
Production of GM's Holden Commodore and Cruze models are threaten by the shutdown of Autodom.