Job cuts at NZ aluminium smelter

Bluff smelter fast-tracks job cuts

A union says the Government needs to step in to make sure the Bluff smelter does not close

TVNZ,

5 September, 2012

New Zealand Aluminium Smelters has accelerated plans to axe 100 jobs from the Tiwai Point aluminium smelter as depressed global metal prices continue to challenge the sector worldwide.

Alan Clarence from the Engineering, Printing and Manufacturing Union (EPMU) said the plan will devastate the Invercargill economy.

Bluff smelter up for sale

"The hundred redundancies announced today are a major blow to Invercargill, but it's just the tip of the iceberg. Unless the Government acts now there's a good chance the whole place will close, and with the smelter goes the Invercargill economy," he said.

"The Government has said it won't get involved in the future of Tiwai, but frankly that's not good enough. It's sitting on its hands over Spring Creek and it's doing the same here, while communities are being torn apart and our skilled workers and their families are being forced to pack up and leave for Australia."

He said the Government should show an interest in the wellbeing of the community and make sure the jobs and the smelter stay.

The smelter at Tiwai Point had announced in August last year that it was reducing its workforce of around 750 by 100 positions over a five-year period, but will now complete that process over the next two months, general manager Ryan Cavanagh said.

Some 35 positions had already gone by attrition as staff left the business in recent months.

Rio Tinto owns 79.4% of the smelter, which is one of 13 older plants the multinational is seeking to sell from its global portfolio, and is one of several placed under the banner of a new subsidiary, Pacific Aluminium, which includes Australian assets.

As the consumer of around one-seventh of all electricity generated in New Zealand, NZAS also wants to renegotiate the terms of a 27-year electricity contract with Meridian Energy, which is due to take effect from next year.

The smelter, which has been operating since 1971, made losses in the past two financial years, although other Rio Tinto subsidiaries in New Zealand, also allied to the smelter, appeared to be profitable, according to Companies Office records. NZAS has not responded to questions on this issue from BusinessDesk.

The smelter is currently running only three of its four smelting potlines, meaning about 15% of the plant is not in production.

"The decision to bring forward plans to reduce the size of our organisation has not been taken lightly," said Cavanagh in a statement. Redeployment within NZAS or the wider Rio Tinto group would be explored.

"NZAS is facing tough economic headwinds. Therefore, it is imperative that we take urgent action right across our business to make the smelter resilient in any market conditions," Cavanagh said.

'Narrow focus'

Labour Leader David Shearer says news that the country's biggest electricity user is fast-tracking its plans to downsize and slash jobs again highlights how narrowly-focused the Government's "growth" plan is.

"When you have a flagging economy people's top concern is jobs. But National is so consumed by its obsession with its assets sales plan and the chaos surrounding it that it's taking its eye off what is most important," Shearer said.

"National promised to help create 170,000 jobs. Yet every day more and more Kiwis are losing theirs."

Just yesterday hundreds of miners and their families marched in the streets against job cuts at Solid Energy, and Goodman Fielder - the company that makes Vogel's bread - announced it planned to close a number of its New Zealand factories, he said.

"Today another 100 workers at Tiwai Point have been told they are about to lose their jobs.

"John Key's so-called magic bullet for economic recovery - selling off our assets - has been National's focus for the entire time it has been in Government.

"While that's been on the agenda - and what a debacle that process has become - the job market has gone belly up and the country has undergone less growth than at any other time in the last 50 years.

"Having a one-eyed agenda doesn't fit with responsible government. Nor should a responsible government fail to notice what is happening directly under its nose. To do so is failing the people," Shearer said.