Car parts workers back on the job

Workers at Coghlan and Russell Engineering at Geelong, southwest of Melbourne, voted on the package today, throwing a lifeline to the Victorian car manufacturing industry, which was threatening to shed 400 jobs.

The 49 were stood down without pay 10 days ago after Coghlan and Russell went into administration.

Administrator Rod Slattery, of PPB, said today the workers had accepted a $1 million package from major customers Ford and Delphi, which supplies Holden, to keep the company afloat.

The breakthrough enables the reinstatement of 400 Ford workers, who were stood down without pay at the company's Geelong manufacturing plant on Friday.

It was feared up to 3500 Ford jobs could be on the line.

Ford spokeswoman Sinead McAlary confirmed the company had contributed $500,000 to the rescue package, enabling its staff to return to work.

"They will go back to work tomorrow and we have managed to avoid stand downs for the rest of our operation," Ms McAlary said.

Mr Slattery said the rescue package allowed Coghlan and Russell to resume operating until it could be sold or restructured as a viable business.

"It's really an opportunity for a period of time to allow the administrators to run the business to cover the outgoing costs, being wages and supplies," he said.

A decision on whether the business would be sold was not expected for two to three weeks.
The rescue package does not cover $1.85 million in employee entitlements.

Mr Slattery said entitlements were not an issue while the company was still trading.

Australian Manufacturing Workers Union (AMWU) acting Victorian secretary Steve Dargavel said the deal also guaranteed supply contracts for a minimum of 12 months, making the business more attractive to potential buyers.

"We're fairly confident that given these extra measures, we're confident the company will be sold," he said.

Mr Dargavel said Ford and Delphi had also agreed to fund a legal pursuit of Coghlan and Russell's directors over alleged misappropriation of funds.

Ms McAlary would not comment on that aspect of the deal.

"I'm not prepared to get into any specifics on that, you'll have to speak to the administrator about that," she said.

Mr Slattery said he was unaware if the car manufacturers had made such a commitment.
An investigation would be done in a "timely and professional manner", rather than a "witchhunt", he said.

"For the union to say there has been misappropriation of funds - that is our call to make and we've got to do our investigations into the affairs of the company, we can't categorically say that," Mr Slattery said.