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Feltex Upper Riccarton Plant Redundancies

Feltex Upper Riccarton Plant Redundancies

Godfrey Hirst New Zealand Limited has informed the Receiver of Feltex Carpets Limited that it does not intend to offer re-employment to approximately 134 staff at the Upper Riccarton plant in Christchurch.

The decision was taken following the provision of further information and documentation to Godfrey Hirst last week.

“As a result, it has become clear that there are significant issues relating to the financial performance and future prospects of the plant and those issues have been present for sometime,” says Tania Pauling, General Manager of Godfrey Hirst New Zealand.

“Of immediate concern is the order book. This currently stands at around 13,000 broadloom metres, or 46,000 square metres, all of which will be completed by 19 November.”

“The Feltex directors and senior management should have been aware of this situation” Tania Pauling says.

Of further concern are the terms of sale for the woven carpet produced at Upper Riccarton.

“Frankly, Feltex was bidding for contracts at or below the cost of production in order to compete with low cost producers in Asia. This was clearly unsustainable. Realistically, this plant should have been closed several years ago when the production of woven carpets was transferred to low cost centres by most other manufacturers in Australia, Europe and North America.”

The Receiver of Feltex, McGrathNicol + Partners will continue to operate the Upper Riccarton plant until settlement, when all Feltex employees will receive redundancy payments.

Thirty five employees will be offered employment until the end of November to complete the existing contracts.

Nine sales, design and IT staff will also be offered contracts of employment with Godfrey Hirst. Furthermore, Godfrey Hirst’s Christchurch yarn mill, Canterbury Spinners Limited, intends to offer employment to approximately 20 Riccarton employees and Clive Scour in Napier has approximately 15 positions available for offer to Feltex Kakariki staff.

“I can confirm that all staff at Feltex’s four other New Zealand plants in Lower Hutt, Foxton, Feilding and Dannevirke will be offered employment by Godfrey Hirst and it will be business as usual at those plants. In addition, all staff at the Auckland and Wellington sales offices will be offered re-employment,” Tania Pauling says. This will mean that over 660 people will be offered permanent positions with Godfrey Hirst.

“Our overarching strategy now is to build on the good brands of Feltex, invest in its future and provide the best management practices and skills to make Feltex a strong carpet manufacturer again.”

ENDS

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