Tas: Millions owed to employees despite $5m fed handout

AAP General News (Australia)
08-26-2009
Tas: Millions owed to employees despite $5m fed handout

By Paul Carter

HOBART, Aug 26 AAP - Millions of dollars of employee entitlements remain unsecured
at a vital Tasmanian car parts maker under administration.

This is despite a $5 million federal government handout, the state government says.

Tasmania Treasurer Michael Aird said creditor Ford called the administrators in on
Automotive Components Limited (ACL), less than two months after the federal government
announced a $7 million ACL bailout.

About $5 million of the bail out was banked by the company before the receivers arrived
on Wednesday.

Industry Minister Kim Carr has stopped the remaining $2 million and says he is relying
on the receivers to account for what happened to the other $5 million.

Mr Aird said it has been spent retiring debt to GE Finance.

"I understand that there is an unmet liability of employee entitlements running to
some millions of dollars," he said.

"That obviously would have to be a concern for those (300) employees," he told reporters
at a news conference in Hobart.

Tasmania withdrew a $4 million loan offer to ACL in June after its directors refused
to personally guarantee to pay it back.

"I think it was the right decision on behalf of the taxpayers of Tasmania," he said.

"We want to protect jobs wherever we can but we also want to protect jobs where we
know there is an ongoing sustainable business."

Mr Aird said senator Carr's national auto industry obligations are different to Tasmania's.

The $5 million was required simply to get the company to administration, he said.

"The federal government under their requirements saw their financial assistance in
ensuring the (national auto industry) supply chain," Mr Aird said.

Greg Keith and Matt Byrnes of Grant Thornton Melbourne have been appointed receivers
and managers of ACL and will try to sell it as a going concern.

Grant Thornton makes bearings and gaskets for car production in federal Labor MP Jodie
Campbell's seat of Bass.

ACL is a critical parts supplier to the Australian automotive industry and there is
a danger that production at Ford and Toyota will be affected if supply is interrupted.

AAP pc/mmr

KEYWORD: ACL AIRD

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