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Case Study Work heads offshore as Pacific Brands
axes jobs
‘With few exceptions, it was no longer
competitive to keep making clothes in
Australia.’
Another wave of mass lay-offs is looming in Victorian
manufacturing after Pacific Brands, the company behind
some of Australia’s most famous clothing labels, said it
would axe more than 1800 jobs.
In a decision with potentially drastic implications for
local industry, Pacific Brands said it saw no future in
manufacturing here, with most of its remaining local
production to be transferred to Asia.
The company, whose household name labels include
Bonds and Holeproof, will close seven factories over
the next 18 months and axe 1200 manufacturing jobs,
including 553 in Victoria. About 650 administrative staff
will also be shed.
Chief executive Sue Morphet, announcing the cuts, said
that with few exceptions it was no longer competitive to
keep making clothes in Australia. Bicycle helmets and
carpet underlay will be among the few products still made
here.
The company went ahead with its decision despite offers
of financial aid from the Federal Government, and despite
claims that it was needlessly closing profitable plants.
Federal Industry Minister Kim Carr blasted the company
for rebuffing the offer of help. ‘I spoke to the chairman
of the board and I specifically asked was there anything
further we could do to get the company to change its
mind, and the answer they have given me is “no”.’
There were also claims that some of the cuts were not
commercially justified.
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‘It just doesn’t make sense to close those parts of the
business that are profitable,’ said Textile, Clothing and
Footwear Union national secretary Michele O’Neil,
‘especially when you’ve got iconic brands that have built
their reputation on being an Australian company that
continues to make things in Australia.’
The Pacific Brands closures are expected to have big
knock on effects, with thousands of jobs in suppliers and
related service industries under threat. Ms O’Neil said
closing the hosiery plant at Coolaroo, in Melbourne’s
northern suburbs, would impact heavily on local
communities that were dependent on manufacturing.
The region has already lost more than its share of jobs
in the economic slowdown, with companies including
Caterpillar, ABC Learning Centres, Ford and OneSteel
having shed staff.
Senator Carr warned that more bad news could be
expected in the present economic climate.
‘We are in a position now to say that there are many,
many companies that are facing an acute liquidity crisis,’
he said, declining to name any of the companies. ‘This
will not be the last day in which we have to deal with very
disappointing news like this.’
Ms Morphet said all worker entitlements at Pacific
Brands would be met. She also defended the company’s
move against claims that it had abused Government
assistance—estimated by the clothing workers’ union at
more than $15 million in recent years.
17/8/09 9:28:29 AM
Managing the
Australian economy
The move to slash jobs came as the company announced
a net loss of $150 million for the December half-year.
Almost 300 people will lose jobs at Coolaroo, with another
255 at the Holeproof plant in Nunawading—many of them
migrant women with poor prospects of finding other work.
With other non-manufacturing cuts, including at the
Hawthorn head office, up to 1000 people could lose jobs
in Melbourne.
Arife Koksal, 36, a machine operator at Coolaroo for
five years, said she was shocked and upset. ‘We’ve
got families to feed, mortgages,’ she said. Ms Koksal
said her chances of getting another job, especially in
manufacturing, were slim.
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She said the assistance had helped keep the industry
working.
Chapter
Learning activity 7.7
1 How many workers became unemployed as a result
of the Pacific Brands decision to move production
to Asia?
2 Why did the company make this decision?
3 What role did the government play in the decision?
4 How did the union respond?
5 What knock-on effects did the decision have for
other businesses in Australia?
6 What personal impact may the closure have on
workers such as Arife Koksal? Discuss.
Figure 7.16 Workers for Pacific Brands clothing manufacturers
are angry about the 1800 job losses across Australia
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