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Comment by hinkley | Hacker News Reader

The suppliers are running in pretty thin margins aren’t they? Did they really have any choice but to cancel those orders or potentially go bankrupt?

If you sit on someone’s shoulders and forget that they’re doing most of the work, you can be shocked all you want when they collapse out from under you but nobody on the ground is going to have any sympathy at all for you.

I’ve worked for software subcontractors and it’s always frustrating when the customer is so excited about all the things we’re going to accomplish together, all the plans that hinge on our mutual success, and isn’t it so wonderful that they’re getting such a great deal on it too?

Meanwhile we’re slowly going broke because we can’t make money on that sweetheart deal loaded with scope creep not spelled out properly in the contracts. Good luck with those plans when we go under.

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> If you sit on someone’s shoulders and forget that they’re doing most of the work, you can be shocked all you want when they collapse out from under you but nobody on the ground is going to have any sympathy at all for you.

Ajax Fasteners where a small manufacturer in the name of Division of Labour, and when they went into receivership, it took down Australia's entire car industry. Let me repeat - Australia no longer has a car industry.

> Ajax Fasteners where a small manufacturer in the name of Division of Labour, and when they went into receivership, it took down Australia's entire car industry. Let me repeat - Australia no longer has a car industry.

Holy crap: https://www.abc.net.au/worldtoday/content/2006/s1719988.htm

You'd think the car companies could have just bought the manufacturing assets of the supplier if it was this critical (that's assuming they weren't looking for a back door excuse to shut down their own Australian production, that is).

Holy crap indeed

... but the Australian car industry was nothing more than rent seeking anyway, so it was a good thing we stopped funding a non-utility.

Do you think there was a moment when the utility stopped, or was it a process? I'm only really familiar with the last days of the Australian car industry.

I never thought that Australia having a car industry as a utility. When something is not economically viable, unless the government want to run it for social benefit at a loss rather than a for-profit cost center, then it's never going to be able to sustain itself over the long run

That was 2006. Australia had a car industry well after that. It died a slow death, I doubt you can blame it on one supplier.

https://en.wikipedia.org/wiki/Automotive_industry_in_Austral...

It did died a slow death (about 7 years after Ajax), but IMHO it was the beginning of the end. There were a tonne of factors, including iron ore prices, trade tarrifs, the car industry crash in Detroit etc, but for us, I think Ajax shutting should have raise alarm bells that the end was nigh (rather than throwing hundreds of millions more to prop up foreign nations in the name of local jobs).

A good rule of thumb I have is if a politician is there at a ribbon cutting, and talks about jobs, then it's nothing more than vote buying in disguise.

I looked up Ajax Fasteners to see if they made more than fasteners, and it seems like fasteners really were the bulk of their business. How can it possibly be true that there were no other suitable fastener suppliers in a country with massive mining, steel/aluminium production, and other heavy industries? It sounds like there's a story here.

Automotive is notorious in MFG for being one of the WORST industries to be a supplier in (at least for US Based Suppliers). Low Margins, and unrealistic demands by the big brands.

‘ sweetheart deal loaded with scope creep not spelled out properly in the contracts’ That sounds more like a problem to take up with your lawyers?

If you don't allow for scope creep you won't get any contracts. What I've seen in the industry is most companies will under bid hoping to make it up in change request fees. The successful companies are the ones who manage the OEM such that they keep them happy while maximizing change requests. It's a fine line to walk.

I don't think money is a problem in this specific case. Because of car shortage conditions they can afford to add a few hundred dollars to the MSRP and pay more for non-cutting edge chips and still come out fine.

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