Downturn for major supplier

Air Radiators makes 27 people redundant although supply to bus industry is unaffected

Downturn for major supplier
Downturn for major supplier

August 26, 2013

Services to the transport industry won’t be affected as a supplier of bus cooling systems, Air Radiators, sheds its workforce in a response to current market climate, its General Manager Jamie Baensch says.

The slump in iron ore prices late last year hit mining sector business with the Geelong company’s customers.

This has seen the company
forgo $15 million in potential revenue, with 27 positions made redundant as a result.

"Our sales are to original equipment manufacturers, so when they’re not selling it’s a direct relationship, we don’t sell to consumers," Baensch says.

"We have over the last 12 months seen constant downgrades in the forecast from both our major and other customers.

"However, we have not lost any customers in this; it’s just simply as when the economy slows down, and particularly as the investment phase of the mining boom has come to an end, that we’re seeing a reduction in the forecast."

The engine cooling systems have been installed in rear engine buses for the past 15 years, and major customers include Iveco, Denning and Motorcoach.

Baench anticipates the market will pick up after Christmas, saying the worst is behind his firm.

"We work on the assumption that we have seen the worst of this from the forecast from our customers and I think that what we have seen in the last month is a realisation that the recovery will take a lot longer than people expected," he says.

"We’re a strong business and a strong employer in the Geelong region; we’re in a position when the forecasts start to show growth to match that.

"There is no issue with our ability to run the business or continue to supply all of our customers – all we are doing is a correction to get our workforce aligned with the current business level."

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