THE federal government faces a $10 million redundancy liability resulting from yesterday's decision to completely shut down ACL Bearing Company.
Grant Thornton, the company appointed as receivers, told 136 staff yesterday at the Rocherlea car parts manufacturer that it would cease production by June next year
Receiver manager Matt Byrnes said the plant production would be near full capacity until the business started to progressively wind down early next year and its assets sold to pay off secured lenders.
He said the decision was made after a buyer could not be found to keep the business open, despite strong interest globally.
``We didn't get an offer for the business as a going concern so we will now negotiate with the parties in relation to the assets only and we can do that during the wind-down phase,'' Mr Byrnes said.
Mr Byrnes said he suspected the factory's location in Tasmania and Australia's strong currency had contributed to an unsuccessful sale bid.
He said Ford Australia's decision to cease car-making in Australia by 2015, and competitor Holden's market struggles, had contributed little to the decision as 80 per cent of ACL's product was exported.
Mr Byrnes said limited shipping services out of the state may have led to reluctance from potential buyers.
He said redundant workers would be owed $10 million.
The company has been operating in receivership since August 2009 and has received millions in federal government assistance and $330,000 from the state government to keep operating.
Tasmanian Economic Development Minister David O'Byrne said that the federal government had agreed that all employees would be eligible for redundancy packages through the government's general employee entitlements and redundancy scheme. He said all entitlements would be met.
An ACL worker, who did not wish to be identified, said the decision to close had brought some clarity and relief to workers after four years of uncertainty since it went into voluntary administration.
``Everyone was expecting something like this eventually,'' she said.
``At least now we've been given until June to plan our futures so it's business as usual until we wind down.
``For some it is a worry as they rely on an income because they've got mortgages and children.
``There are a lot of people that have been there for many years.
``I work with someone who has been there for 30 years - since they left school.''