Tassie car part maker gets $7m bailout

"Exceptional circumstances" have convinced the federal government to bail out a
struggling car parts maker in a marginal Labor seat in Tasmania.
Industry Minister Kim Carr announced ACL Bearings would receive a $7 million grant,
nearly double the previously approved amount of $4 million, to stave off insolvency
and save the jobs of 280 workers.
The Launceston plant, which makes parts including bearings for car production, is in
the seat of Bass, which Labor MP Jodie Campbell won back from the Liberal Party in
2007 with a one per cent margin.
Flanked by Ms Campbell and several car industry and union figures, Senator Carr
announced the $7 million Automotive Industry Structural Adjustment Program grant on
Monday.
Senator Carr said ACL was so important to the industry that the support was "not
only warranted but essential".
"I take the view that placing a company of this importance under administration left
the industry as a whole very vulnerable," Senator Carr said.
He said 5,000 people would have faced unemployment across the industry as a flow-on
effect of ACL closing.
Hundreds of jobs have been lost from car parts makers across Australia in the past
year, including Victoria's Teson Trims which closed last September with the loss of
126 jobs.
But Senator Carr said there were "exceptional circumstances" in ACL's case, because
it was strategically vital to the car industry's future, had commitments of
assistance from key industry players Ford and Toyota and the union, and it had faced
liquidity questions as a result of the global recession.
"I'm not able to give undertakings in regard to all other companies, I'm only able
to give undertakings in regard to this company and these circumstances, which are
exceptional, and under these terms and conditions."
The federal grant is to be used to restructure the company over three years, and is
conditional on the company investing in its resources and reaching agreed
milestones.
Australian Manufacturing Workers Union assistant national secretary Glenn Thompson
said ACL was vital to the car industry because it produced unique bearings necessary
for car makers.
"ACL is, quite clearly, pretty strategic in the supply chain. They produce a unique
component that cannot be sourced elsewhere," he told AAP.
"If it (the bailout) didn't happen, it would have shut down jobs at Ford and Toyota.
Over 5,000 jobs would have been lost."