When the factory doors swing closed at General Motors Holden and Toyota in 2017, it will mark the end of an era. Australian car manufacturing—at least in the classic, heavy production line sense—will be over.

But even before clang of the gates is heard, the ripples are spilling outwards and suppliers and workers are being rocked by the waves. Some will take on too much water and sink. Others are setting a new course and rowing hard.

The issues industry decline raises for participants, including planning for the new reality, managing staffing levels and understanding directors duties and other insolvency issues, are not only relevant to the automotive sector. Sectors including aluminium smelting, power generation, media and retail are all undergoing rapid change as technology and new ways of doing business sweep across Australia. More than 2,700 businesses went into administration in 2012-13, which was the second worst year on record for business failure.

Federation of Automotive Parts Manufacturers President Jim Griffin said the industry's big players had a "moral" to help smaller suppliers who might have invested heavily in plant or equipment that will soon lose its value. "It's up to individual companies to negotiate with their customers, but I would hope they would do the right thing."

Many tools used by suppliers are owned by the car-maker itself, and those will be collected and moved elsewhere in the world as the car-maker leaves Australia. Limited volumes of parts making would continue in Australia for ten years as car companies met their obligations to provide spare parts, Mr Griffin said. "That's quite a complex issue and it is going to need to be addressed by the three car makers."

At Dolphin Products in Melbourne's north, owner Mario Turcarelli is pleased his plastic moulding company has three years to plan. "Forty per cent of our business is Holden so we will be impacted," he says. "We are working hard on our sales and marketing diversification plan, we have a couple of years to diversify into medical and food packaging and homegoods."

Turcarelli was an employee of the company just a few years ago. He bought the company when its foreign owners decided to shut it down, and set about making it profitable again. He has managed that through careful rationalisation of property—the warehouse and factory are now co-located—as well as building new markets. But the end of the contracts with Holden will blow a hole in the profitability Turcarelli has restored. "We will see a tapering down as they stop buying that product... There's nothing in those contracts, we don't get compensated in any way."

Similar planning scenarios are playing out all over the country as suppliers manage the end of relationships they may have had for decades. Not everyone is as hopeful as Mr Turcarelli. The Federation of Automotive Parts Manufacturers says thousands of jobs have been put at risk as the anchor businesses in the sector committed to pulling out.

Companies that are not going to survive must also plan for their future, including what they will do with leases and staff. For example, many rounds of redundancies may be required at Toyota, Ford and Holden as they shrink their output. Rules around redundancies will differ between the big three car makers and the smaller suppliers, depending on entitlements written into workers' agreements.

With good planning, some companies impacted by the end of the Australian car manufacturing era will stay afloat. Those that are sinking have a number of options, including being wound up. Solvent businesses that are wound up must cancel their ABN and GST registration with the ATO, and retain all business records for five years. Companies must ensure they do not trade while insolvent. If creditors are left in the lurch, the business can be liquidated and assets will be sold. ASIC provides for "serious penalties" for directors who permit businesses to trade while insolvent.

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