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MIL OSI – Source: First Union – Press Release/Statement

Headline: Job losses at carpet yarn mills

 “A combination of a high wool price, lack of new housing starts and the lack of progress on the Canterbury rebuild has conspired to send the New Zealand yarn and carpet industry down the same negative path as the wood processing industry,” said Robert Reid, General Secretary of FIRST Union (formerly the NDU), the union for wood and textile workers.

Yarn and carpet maker Cavalier has just made around 22 workers and some management redundancies across its Wiri, Napier and Whanganui mills.  
Norman Ellison Carpets, 70% owned by Cavalier, is making 20 workers redundant at its Onehunga yarn mill next week.  
On top of this both companies have announced that they are shutting down for a week around Labour Day, Robert Reid said.
“Cavalier’s main competitor, Godfrey Hirst, had already lost 120 jobs at its Christchurch yarn plant as a result of its destruction by the Christchurch earthquake earlier this year.  It is our view that there would have also been recent redundancies at Godfrey Hirst if this capacity had not been taken out earlier.
“Other yarn makers in New Zealand have also notified the union that their orders are down and the union would not be surprised to see further job losses at other mills,” he said.
Carpet and yarn makers are quoting the increase in the price of wool from $3.00 a kilo to $7.00 a kilo as being the killer for the industry, Robert Reid said.  
“While the increase in wool prices may be good for farmers it is making woollen carpets uncompetitive.  Some carpet makers are moving to synthetic carpets because of the price of wool.
“What is happening in wool is very similar to what is happening in the New Zealand wood processing.
“FIRST Union has been dealing with a rash of closures and redundancies in wood processing plants over the last couple of months.  Industry sources from both wool and wood tell us that the reduction of new house starts from an average of 22,000 to 12,000 last year is crippling both industries.
“Both industries were looking forward to the increase in demand from the Christchurch rebuild.  However the rebuild seems further and further away every day.
“Over the last couple of years we have seen the free market fail the world in finance and also in production.  The current government does not seem interested in ensuring that we have strong and viable industrial sectors but is prepared to watch the anarchy of production run its course.
Robert Reid said the government should be taking steps to deal with the high and volatile New Zealand dollar which was punishing exporters and adopt a strategic approach to procurement of locally manufactured wood and textiles for the Christchurch rebuild.
“In the end it is workers who pay for the failures of the market through job losses.  This is happening again in the wool and wood processing industries,” he said.