DSI Holdings will close its Lavington gearbox factory for good on October 31.
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Its 142 workers will lose their jobs as its parent company steps up production of gearboxes in China.
Staff were told of the decision at a meeting yesterday, sealing the fate of a factory established 43 years ago.
DSI directors made the decision after meeting the company’s Chinese owners, Geely, last week.
Geely has a contract to supply gearboxes to SsangYong until October and had remained optimistic of negotiating another contract.
The Australian Manufacturing Workers’ Union had pushed the company to meet employees about the factory’s future and was promised a decision by June 1.
Howard Morey, who has been plant manager under four different owners since 2004, said: “This decision is taken with deep regret.
“Unfortunately it is no longer viable for DSI Holdings to manufacture in Australia, as has also been evidenced by the recent announcements of Holden and Toyota that they will cease manufacturing in Australia.”
The closure decision comes six months after Albury lost another long-established manufacturer, Macquarie Textiles.
Mr Morey said DSI had taken some time to consider all other alternatives and had not been able to find a workable solution.
“DSI recognises the impact of this decision on our employees and the local community of Albury-Wodonga,” he said in a statement.
“As such, we intend to work with all employees and the union to ensure all of our employees are supported throughout this transition process.
“DSI will ensure that all redundancy and other entitlements are paid in accordance with the applicable enterprise agreement.”
DSI will retain its research and development capacity at the existing engineering site in Springvale, Melbourne.
AMWU national assistant secretary of the vehicle division Warren Butler said there was a sombre feeling among workers after yesterday’s meeting.
“It’s a sad day,” he said.
“This factory has been in operation for 43 years and it’s been through the highs and lows of the automotive sector of Australia.
“While it doesn’t produce for Ford, Holden or Toyota, it still has played a role in manufacturing in this region and it will be greatly missed in that sense.”
Mr Butler said across Australia exports had been priced out of the market because of the high Australian dollar.
“There’s a certain belligerence on behalf of the federal government to intervene and assist Australian manufacturing and, unfortunately, we see another victim of that,” he said.
Mr Butler said the average age of an employee at the factory was 47.
“We are not talking about a new workforce — these people have been here for some time,” he said.
“They have gone through a number of restructures over the years, so these are people who are dedicated to the company.”
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