An 80-year-old South Australian family truck parts manufacturing business will close its doors later this month, costing 54 jobs.
Family owned business Industrial Engineers and Spring Makers will cease operations on March 24, with all 54 employees — the majority of whom are older than 50 — to be made redundant.
The move, it says, is due to the recent spate of free trade agreements that it says has made its future unviable.
The company makes springs for cars, trucks, trailers and industrial applications, along with other allied products. However, management said the demise of the local automotive industry was not the driving factor of its predicament.
Senior manager Chris Coxon, whose grandfather Jack Marsh founded the company in 1935, blames the increasing number of free trade agreements, which he says has created a uneven playing field.
In recent years, former trade minister (now trade envoy) Andrew Robb has overseen the signing of a number of agreements, with partner countries including China, Japan and Korea.
“To us it boils down to a policy issue, presumably in the name of free trade, which in turn assumes that free and open trade weeds out businesses that are inefficient,” Coxon told The Advertiser.
“While true at a broad macro level, it can be utter nonsense at the micro community level, particularly when copies of our products are not made under the same conditions and regulatory environment,” he says.
Coxon notes the writing was on the wall when major client Kenworth Trucks switched to an overseas supplier last year.
“Our issue is with the Chinese copying our products,” he adds.
“They produce a lower quality good and charge, say, 20% less for it, which, in this economic climate, sees around 80% of people select that good. We make a better quality product but can’t compete on price.”
Managing director Tim Marsh said all of the company’s suppliers will be paid in full, on top of more than $1 million in redundancy payments and other entitlements.
“We want to do the right thing by everyone — nobody will miss out,” he told The Advertiser.
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