Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Godfrey Hirst buys Oamaru plant, 192 staff on notice

Godfrey Hirst buys unprofitable Oamaru plant, 192 staff on notice

Jan. 31 (BusinessDesk) - Godfrey Hirst, the biggest carpet maker in Australia and New Zealand, has bought Oamaru's unprofitable yarn-spinning plant from Japan's Sumitomo Corp, effectively putting 192 staff on notice as it looks at ways to turn the operation around.

The company, which bought the Feltex business out of receivership, was granted Overseas Investment Office approval to buy the assets last month. It is reviewing the wool yarn spinning business to see how best to manage the loss-making plant, Godfrey Hirst said in a statement.

The plant has been on the market for the past two years, with Godfrey Hirst the only viable buyer, and ends a 21-year ownership by the Japanese group.

"This was driven by a number of factors affecting trading results including an unfavourable exchange rate and less local demand for wool carpets,” Summit Wool Spinners managing director Harry Ogawa said in a statement.

Summit Wool Spinners was one of a handful of companies that participated in the government's "nine-day fortnight" scheme in 2009, which came out of the Jobs Summit at the start of the current National-led administration. The scheme let companies cut staff hours by one day a fortnight to receive a subsidy on wages and saved a reported 377 jobs.

Summit Wool Spinners told staff the plant will be closed some time near the end of February, according to a joint statement by the Engineering, Printing and Manufacturing Union and First Union.

"Summit has been a very good employer and didn't want to make these redundancies," EPMU organiser John Gardner said. "The government's refusal to act on the overvalued exchange rate or provide any kind of strategy for manufacturing means they were left with few options."

Union members were told of the decision this afternoon, and will receive redundancy compensation through their collective agreements, the unions said.

The proposed closure coincides with the Parliamentary inquiry into manufacturing job losses being run by Opposition parties, who claim nearly 40,000 jobs in the sector have been lost since 2008.

The wool carpet sector has been in disarray in the past couple of years as high wool prices and cheap synthetic alternatives have eroded their customer base and squeezed their margins.

NZX-listed Cavalier Corp, which left the stock exchange's top 50 index this month, shut a yarn spinning plant in Onehunga last year due to over-capacity in the sector.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: RBNZ Starts Talks On Tougher Rules For Property Speculators

The Reserve Bank of New Zealand is stepping up preparations to restrict lending to residential property investors as it watches house prices, particularly in Auckland, continue to rise strongly. More>>

ALSO:

Research: ‘Ageing Well’ Science Challenge Launched

Science and Innovation Minister Steven Joyce today launched the Ageing Well National Science Challenge, confirming initial funding of $14.6 million. More>>

ALSO:

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news