GERMAN-OWNED automotive parts supplier Continental is understood to have done an about-face and ordered the closure of its Australian operations next year after previously saying it would expand the research and development workforce of its Bundoora site in suburban Melbourne.

GoAuto understands Continental staff – some of whom were only recently employed – are in shock after being told on November 18 they would be made redundant when the entire Bundoora site with its head office, manufacturing and engineering functions is closed in November 2017.

Continental Automotive Australia management has been approached for comment, but so far the company has not confirmed or denied the report. No reason for the closure has been given.

More than 200 staffers, including engineers and software specialists, are expected to be paid out by the company when it pulls the pin about the same time as the final two Australian motor manufacturers – Holden and Toyota – close their Australian factories in the second half of 2017.

Continental Automotive – a wholly owned subsidiary of Hannover-based Continental AG which is best known for its tyres – supplies the car manufacturers with electronic components such as instrument clusters, heater control modules, powertrain interfaces, cockpits, intake air fuel modules, rear seat entertainment systems and navigation systems from its two Australian sites, in Bundoora and Campbellfield.

In December last year, the company told GoAuto that despite the imminent end of Australian car manufacturing, it planned to expand its R&D operations at Bundoora to support Continental’s Asian operations.

Back then, Continental Automotive Australia vice-president of engineering and sales Wolfgang Obst told GoAuto: “It was a fantastic outcome and we are pretty happy about that.

“It’s really that they recognise our expertise here in Australia.”

Company insiders told GoAuto this week that it seemed the local management had been blindsided by the head office decision that had been contrary to previous statements.

The local Continental website still reflects that optimism: “With the further globalisation, Continental is committed and ambitious in Australia to grow with local customers and support them in becoming globally competitive.”

The company began operations in Australia as VDO in 1957, supplying speedometers for the Volkswagen Beetle made in Clayton, Victoria.

After buying VDO from Siemens in 2007, Continental took over the Australian operation that then was supplying parts to the three remaining local manufacturers, as well as export customers.

The parts also included motorcycle instrument clusters for Europe.

Many of the products were developed in Australia by the Bundoora R&D team which, according to insiders, developed a can-do reputation among other Continental operations depending on their skills.

It was this reputation that appeared to have delivered a reprieve for the Australian team when so many other parts-makers were considering their future here.

By Ron Hammerton