About 400 workers have lost their jobs as car parts plants in South Australia and Victoria have closed indefinitely.
The jobs have gone from Dair in Victoria and aiAutomotive at Woodville in Adelaide's western suburbs.
The Australian Workers Union said Adelaide shift workers were told when they arrived at 6:00am ACDT they were no longer required because steel supplies had run out.
Union official Wayne Hanson is worried for the wider vehicle industry.
"What's even more alarming is that there will be a ripple effect right throughout the car manufacturing industry in terms of Toyota, Ford, Holden, so there is quite a widespread effect that will ripple through the automotive components and motor vehicle industry," he said.
Dair has several Victorian operations, including Gisborne and its main manufacturing plant at Dandenong in the south-eastern suburbs of Melbourne, where workers received the news as they arrived for their shifts this morning.
Parent company Autodom said in a statement it was closing the doors of aiAutomotive and Dair for an indefinite period and was in a trading halt on the ASX.
The company said it was trying to negotiate a restructuring.
High costs Autodom CEO Calvin Stead said times were tough for the industry.
"Our company is constrained by high fixed costs that cannot easily be aligned to the pace of the current volume reduction in the local car manufacturing sector," he said.
"We need time and assistance to reorganise ourselves and structurally change the direction in which we are headed.
"We have made excellent progress in this regard." Mr Stead said the car industry in Australia had more than halved its production in less than four years.
"Unfortunately we have no choice but to make this very difficult decision whilst we work together with all stakeholders in the hope that a solution can be found," he said.
"We trust that the car companies and stakeholders will see the benefits of the restructure plan put forward and how their support will allow the company to develop a more robust and sustainable business.
"Our valuable employees are what makes this company successful in terms of its ability to deliver good-quality product to a market so we share and sympathise with those individuals for the difficult that they are going through too." Autodom supplies metal pressings, sub-assemblies and painting and parts coating for customers including Holden, Toyota and Ford and says it has export customers in the United States, China, Brazil and the Middle East.
Holden said it was disappointed with the closures and was assessing the likely impact, with a hope of minimising any effects on its production.
Ford said if it could not get enough parts, it would have to cease production.
Toyota said it was confident it had enough car parts to keep its production lines operating.
For its part, Autodom said it was hoping to have a clearer idea of its future within the coming day.
Government support South Australian Premier Jay Weatherill said his Government was working with Autodom to ensure aiAutomotive had a future.
"There's been significant Government funding that has been provided, there's been significant concessions that have been given to the company in terms of repaying loans that they may have to Government, all in a bid to ensure that they continue to be a successful company," he said.
"We're very confident that whatever their present difficulties, the business will continue to operate because it's actually vital for the future of automotive sector." SA Manufacturing Minister Tom Koutsantonis said the State Government had waived $3 million dollars of company loan repayments.
He said it had received a total of $6 million in state and federal support and SA would not agree to any more requests for money.
"It's our view that $6 million was sufficient.
Ultimately we're not going to be lending people money to pay wages, it's about structural reform," he said.
"If it's not structural reform then the State Government cannot assist and will not assist, no Government would, and what we're doing is making sure that those components workers and this operation will continue one way or another into the future." Deputy SA Opposition Leader Steven Marshall said he was worried for the future of car production.
"The automotive supply chain in South Australia has approximately one week's stock in the pipeline.
Once this is exhausted, this closure has the potential to affect production across the supply chain, including Holden," he said.
"This issue highlights the problem with the Labor Government's package to Holden.
The $275 million deal did not include support for the wider automotive supply chain." Manufacturing Union official Leigh Diehm said he was worried the operations could go into administration.
"I'd be encouraging the company to have a chat to the Victorian State Government.
You've got the Baillieu Government that are constantly out there saying they support local manufacturing, well here's another two sites in Victoria that are in a very hard situation," he said.
"It's a very large thing to show up for work at 7 o'clock in the morning and be told that you need to go home indefinitely because we can't get any product from our suppliers, so our members are very concerned.
It's getting close to Christmas."