Originally Posted by jozza
Unfortunately it seems that the Fisherman's Bend plant in Oz has stopped using the very engine blocks that were to be used for the upcoming alfa range.Apparently the blocks were originally sourced from Mexico.Sad news indeed if they find themselves without a suitable replacement.
Taken from here
Currently Holden still source engine blocks from Mexico. And this was Obviously this was mean to concontinue at least through 2005 until ION came fully on stream. However due to management incompetence at ION , the company is now in receivership.
I find it hard to believe that GM will not find another source of engine blocks in the next 12-18months . It is also possible that Mexico will continue to be the engine block supplier
"Ion's runaway success in its early stages lured the company out of its depth, writes Ian Porter.
In January, car parts and transport group Ion was sitting pretty. It had four strong businesses with long-term contracts, a share price around $2.46 and a history of rising operating profits.
Now Ion is in administration and more than 19,000 shareholders are wondering where their investment went. Creditors will today get their first report from administrator Colin Nicol of McGrath Nicol.
It has been an astonishing reversal of fortunes. But, while the blame has been directed at the bank consortium that pulled the administration trigger, the roots of Ion's demise can be found in the company's gestation and its subsequent runaway success.
Ion was set up by Graeme Salthouse, a chartered accountant, chief financial officer and entrepreneur who had created one conglomerate, Hawker Richardson, during the 1990s.
One of the founder's former colleagues said that Salthouse was good at putting deals together but less suited to running a business. "That's all about people skills, and developing culture," he said. "That's what's gone."
Ion was based on Castalloy, an operation in Adelaide that Salthouse picked up in 1999. He added three other strong businesses, Cootes transport, AMT wheels and BTR transmissions using Ion's surging share price to pay for them.
Castalloy was an aluminium foundry that had become the main supplier of wheels and other aluminium parts to Harley-Davidson in the US. After a lift in orders, it paid for itself within about 18 months, getting Ion off to a great start.
Under the guidance of Castalloy's chief executive, Col Peters, who was elevated to the Ion board, Castalloy won more parts contracts, mainly with Holden. This was quality business, but it required more production capacity.
Castalloy drew up plans for a new foundry at Wingfield in Adelaide. No one at Ion had ever built a new plant- the ones it acquired were all between 10 and 20 years old.
Unfortunately, Peters retired from the board in the middle of 2002, leaving the Ion board without anyone who had a strong manufacturing background. It was decided to expand Wingfield even as it was being built.
Nothing went right. Reject rates were high and, worse in a commercial sense, some faulty cylinder heads were shipped to Proton in Malaysia.
Directors decided to decouple the plant and effectively reconstruct it in separate pieces so a problem with one product would not hold up production elsewhere.
Costs ran wildly over budget and the plant was more than a year late. Worse, because work had to be transferred to Castalloy's original plant in Plympton, which was also being expanded, Plympton lost money too.
While the Wingfield project was struggling, Ion kept winning orders requiring significant new capacity. By the end of 2003, it was planning three more big capital expenditure projects, including a $100 million engine block plant in Altona to supply Holden.
The company had already run out of management talent and was out of its depth. It could not build one new factory, let alone four.
However, it could still raise money, $63 million in equity in February this year and $440 million in bank debt in September. This was supposed to see the construction projects through to completion in 2006. But most of it was sucked up within 12 weeks.
Ion would need another $40 million before the end of 2004 and a further $40 million in January, and there was not enough left to cover it. In fact, Mr Nicol said the funding shortfall out to 2006 would be around $200 million, meaning that, between September and December, the capital expansion projects had ballooned 50 per cent in costs.
The main concern is maintaining the various operations and honouring the contracts, Ion's most valuable assets.
"If (the administrator) can't keep those contracts running, and they're not repeatable, he's got no business to sell," the former colleague said.
The administrator has made $150 million with the sale of Cootes and could lift the total to $400 million with further asset sales, at which point Ion shareholders might get what's left of their company back."