3-05-09, 9:41 am
Original source: The Guardian (Australia)
The manufacturing industry in Australia and the jobs of thousands of more workers suffered another blow last week when Pacific Brands announcement that it was shutting shop in Australia. Pacific Brand has a workforce of 1850 and is the manufacturer of well the known Australian Bonds, Holeproof, Kayser, KingGee, and Yakka labels. “The government must act urgently and decisively to save jobs,” Textile Clothing and Footwear Union of Australia (TCFUA) national secretary Michele O’Neil said. Melbourne’s Herald Sun was surprised by the strength of public anger: it received 2,500 letters to the editor within hours of the news.
The trade union movement quickly gave its support to the TCFUA and its members at PacBrand. The Transport Workers Union has made it clear that the company will not be able to move a single piece of machinery from its factories, and the Maritime Union of Australia indicated that none of it will be shipped overseas.
The company has seven plants in NSW, Victoria and Queensland. They are set to close over the next 18 months, unless some solution is found to keep them open.
“The majority of the workers employed by this company are migrant women who have long years of service, their prospects of finding alternative work in the current economic crisis are grim,” said Ms O’Neil. “The union does not accept that the complete closure of these sites is necessary. A number of the brands and divisions of this business continue to be profitable whilst manufacturing in Australia.”
Pacific Brands received more than $17 million of taxpayers’ money in the past few years, but did so without any guarantees of future jobs.
CEO Sue Morphet made no pretence of feeling any sensitivity towards the workers. She said that 75 percent of Bonds products were already made overseas and that it made economic sense to move the rest to China and other Asian countries. The company could make larger profits by going offshore to cheaper sources of labour.
There are media reports that the company was forced to restructure by the banks before they agreed to roll over $550 million of debt arising from recent takeovers.
Morphet denied media reports that it was a last ditch effort to save the company: “This is not about saving the company, it’s making the company more powerful.”
Morphet’s own pay packet was tripled from $685,000 to almost $1.9 million just eight months ago. The company’s directors also stuck their snouts in the trough, 13 of them more than doubling their combined take from $7 million to $15.5 million. Morphet has no qualms in holding onto her $1.9 million while sacking 1,850 workers. Not even crocodile tears were spared for the sacked workers or their families.
Union and industry leaders have called on the government for discussions about the urgent need for an industry assistance package for the textile clothing and footwear (TCF) industry. There was a report into the industry last year, which the government is still sitting on. It includes recommendations for an industry package and continuation of the phasing out of tariffs.
Job losses on the rise
Two days prior to PacBrand’s announcement, another large textile company based in Victoria, Melba Industries, reported that it had been put in voluntary administration. The company, which supplies protective fabrics for the uniforms of the CFA, the Metropolitan Fire departments and the Australian Defence Forces, has a workforce 170 in Geelong and Thomastown.
The TCF sector directly and indirectly employs around 200,000 workers; many of these jobs are in danger if no action is taken to protect them. The banks are treating companies in the industry as medium to high risk and increasing the risk of failure by making it extremely difficult to roll over debt or obtain new credit.
Last week, workers at the Albury-based manufacturer of gear boxes for motor vehicles, Drivetrain Systems International (DSI), were told that 225 of them were being sacked. The future long-term prospects of its other 175 employees remain uncertain. (See Guardian 25-02-2009 for more information on DSI.)
Lendlease, another company which has benefited from major publicly funded or underwritten infrastructure projects in recent years has announced further sackings.
BHP has plans to slash 3,400 in Australia, Macquarie Bank is shedding another 1,047, Westpac 2,500, Qantas 1,500, the Commonwealth Bank 1,000, OneSteel 800, Starbucks 685, Rio Tinto 640; and so the list goes on.
The government’s response to these and the many other sackings has been one of publicly urging businesses to hold on to their employees, as if they might listen. Hardly stopping to take a breath or listening to its own word, the government has since admitted that it will be slashing the jobs of thousands of Commonwealth public servants.
The government has given no indication that it wants to retain the TCF industry in Australia. It talks about training for the unemployed, but in reality is doing little to plan Australia’s future industrial base or to create the jobs that are necessary to maintain one.
Thirty-five years ago more 35 percent of the workforce was employed in manufacturing. Today that percentage is less than 10 percent! Since the process of winding back tariff reductions began in the mid-1970s, thousands of jobs have been lost as well as the potential for new jobs in the context of a rapidly growing population.
The TCF industry, steel, vehicle, whitegoods and many other areas of manufacturing have been decimated as companies have done what PacBrand is doing today. They find it more profitable to go offshore, exploit cheaper labour and import their products for Australian markets. Before they left Australia’s shores, some of them pocketed huge taxpayer handouts that delayed their departure a few years.
It is time the government took a cold hard look at the structure of the Australian economy, re-examined its commitment to wiping out tariffs and other forms of support for local industries and jobs such as import quotas. The various free trade agreements and deregulation of the financial sector along with lack of planning have seen gross distortions in the structure of Australia’s economy. The economy, with its heavy reliance on the export of agricultural products and resources, tourism, the export of education and the parasitic financial sector, is extremely vulnerable.
