DSI Closure May 2014 - I Just Noticed

[aussiblue]

Sad but inevitable end:

http://www.bordermail.com.au/story/2...tears-opinion/

BORG-Warner, BTR, ION, Drivetrain Systems International and DSI — these were the iconic names that made Albury world famous as a manufacturer of gearboxes for 43 years.

Millions of dollars earned by the Lavington factory from Ford, Holden, SsangYong and other car companies helped drive the Albury-Wodonga economy in many ways.

Even Italian car company Maserati imported its gearboxes, as did India’s Mahindra.

Over 43 years, it employed thousands of men and women — 1251 at its peak in 1982 — trained scores of apprentices, supported many local suppliers and services.

Bosses and staff were generous sponsors of sports and charities.

Explaining why the factory must now shut isn’t easy, but this is the end of a rocky road that lasted 10 years.

It was built in 1971 by local company Chicks — Maurie Chick was among businessmen who lobbied Borg-Warner to establish the factory — well before the Albury-Wodonga national growth centre started.

Borg-Warner’s success encouraged others to invest on the Border, and when Springdale Heights emerged, the factory was no longer “in the sticks”.

BTR Nylex bought the plant in 1987 and ran it successfully with a range of global clients.

A turning point came in 2002 when Graeme Salthouse’s ION Ltd paid $88 million for the business, including its Springvale research section in Melbourne.

ION was a large group with factories in Adelaide and interests in New Zealand, but it was headed for financial disaster.

In 2004, the ION Group as a whole collapsed, owing creditors $550 million — but not because of the Lavington factory, which had always been profitable up to that time.

However, when ION failed to clinch a lucrative gearbox contract with Holden, it reduced the Lavington workforce to 750 under manager Howard Morey.

Liquidators subsequently sold the Lavington gearbox manufacturing business for $44 million to a consortium including former ION Automotive general manager Mike Turner, but this, in turn, collapsed in 2004 as orders reduced.

Workers in 2002 had made two decisions they were later to regret — buying shares in the new Drivetrain Systems business to make it

viable, and foregoing rights that denied them benefits when made redundant.

Receivers in 2004 had to tell creditors they, too, would get nothing from the company collapse, as the bankers would have to take virtually all the money left.

So the whole thing was up for sale again.

In 2006, NSW premier Morris Iemma made a tax concession worth $14 million to $1.7 million to help the business’s viability, handing the cheque to Mike Turner, who receivers had kept in charge.

Astonishingly, Drivetrain Systems gained $23 million of taxpayers’ money in the form of motor industries subsidies from 2006 to 2009,

helping it achieve a $16 million profit to June 2008.

Naturally, those workers who lost their jobs without benefits in 2004 wanted to know where all the money had gone.

Then industry minister Julia Gillard fast-tracked $7 million in temporary relief payments that the receivers later had to repay.

In 2009, the receivers sold the business to Chinese private car manufacturer Geely Automotive Holdings for about $55 million, saving 130 jobs at that time.

Clearly the Chinese wanted DSI’s technical expertise and, as predicted by unions and this newspaper, they used it to build and equip gearbox factories in three Chinese cities.

Geely — which also owns the global Volvo cars business — is ambitious, but the Lavington factory no longer figures in its plan, having reached its use-by date.

Losing a deal with South Korean company Ssangyong was the last straw.

Only this month, Geely vice-president Sun Xiaodong, said Geely’s annual car sales company would double to 1.2 million by 2019 (it made 549,000 vehicles in 2013).