Victorian defence manufacturer Production Parts collapses into administration

A 60-year-old aerospace manufacturing company that won a $40 million contract last year to produce parts for the controversial F-35 Joint Strike Fighter project has been placed into administration, with receivers PPB now receiving expressions of interest for a buyer.

The collapse highlights pressure on the manufacturing industry, which continues to battle the high Australian dollar and the threat of higher interest rates.

PPB receivers David McEvoy and Nicholas Martin were both contacted by SmartCompany this morning. McEvoy was not available prior to publication, but Martin said he was unable to provide much information about the company’s financial history, with administrators only being appointed last Friday.

However, he did confirm the company is still operating. Production Parts was also contacted this morning, although a spokesperson was not available prior to publication.

According to the Australian Securities and Investments Commission, Production Parts received a notification of an application to wind up the company on July 28, while administrators were appointed on July 29.

The receivers are now putting out calls for expression of interest, saying the company has more than 65 years of experience with both domestic and international clients, annual revenue of $7 million and “significant long-term contracts and orders in place”.

One of those is a $US40 million contract to produce an engine component for the Joint Strike Fighterpropulsion system. That contract was announced in conjunction with former deputy premier Rob Hulls last year, with the deal being brokered in conjunction with Pratt & Whitney.

Production Parts was founded in 1946 by Arthur Nicholls, and has since continued to become a successful player in the engineering space working on aerospace, defence and general engineering projects. It has won a number of key awards over the past decade, including many for the company’s exporting activities.

Peter Nicholls is listed as the company’s managing director, although it is unknown if there is any relation between himself and the founder. The company says it remains “proudly” privately owned.

Production Parts has also won contracts for the Super Hornet project, the Armed Reconnaissance Helicopter and Multi-Roll Helicopter programs. In 2008 the company also won a multi-million dollar contract to supply components for the International MU90 Torpedo program. It also produced components for the F-35 Lightening II program.

In several press announcements on the company’s website, the Victorian Government has highlighted Production Parts as an example of quality manufacturing.