Shutdown hits Australian car industry

A strike at one supplier hit three major manufacturers

Australia's car industry is facing its second crippling shutdown in less than a year after workers at an exhaust parts supplier extended their strike.

The workforce of Walker Australia in Adelaide has now been out on strike for a week, and on Monday voted to stay out another two days.

The 400 taking industrial action walked out over pay and entitlements, as part of wider action which has hit two other component makers.

They say Tenneco, Walker's owner, should set up a trust fund to protect long service leave and holiday rights - although the company insists a federal government programme already does much the same thing.

As a result, Ford and General Motors have both halted production, halving output in the A$16bn ($8.7bn; £6bn) car business in Australia.

That could trigger layoffs both of their staff and those of their other component suppliers.

Deja vu

The action by component workers underlines the "just-in-time" nature of the modern automobile business.

Firms no longer carry stockpiles of goods, so trouble downstream can easily freeze production almost overnight.

It was only August last year when the last strike hit the industry.

Tristar Steering and Suspension workers were out for 14 days, in a stoppage which cost about A$400m in all.

Already, according to Ford and General Motors, the cost of this strike has reached A$50m.

The other two main carmakers in Australia - Japan's Mitsubishi and Toyota - have thus far avoided shutting down their production lines, but say they will run out of parts on Tuesday.

The four say they have avoided laying off any of their 14,000 staff as yet, but are warning that it remains possible should the strike continue.