Feltex deal leaves staff out of pocket

The 820 workers at Feltex Carpets New Zealand are in line for redundancy cheques worth as much as $15,000 apiece in some cases.

But for many, the payouts - part of an agreement unveiled yesterday to sell the ailing carpet maker to Australian rival Godfrey Hirst - are thousands of dollars short of full redundancy deals.

Workers will get the cash even though most will be re-employed by Godfrey Hirst when it takes control of Feltex next month.

Tony Sparks, head delegate for the National Distribution Union at the Christchurch plant, said workers were "disgusted, angry and gutted."

Mr Sparks worked for Feltex for more than 20 years, like many at the plant. Had he been made redundant before the ANZ bank put the firm into receivership, his contract would have entitled him to as much as $50,000.

A statutory cap on payments, which extends to all workers including those at the Feltex head office in Melbourne, limits that sum to $15,000. Pension entitlements are protected.

"There is a lot of long-serving people here. Anybody who has been working here longer than four years is going to take a big loss," Mr Sparks said.

As part of yesterday's agreement, receiver McGrathNicol agreed to close the Feltex plant at Kakariki near Marton with the loss of 44 jobs. More jobs will go at the Christchurch plant, taking the total in New Zealand to at least 123.

Engineering, Printing and Manufacturing Union national secretary Andrew Little said the loss of the plant would have a huge effect on the small Rangitikei township. He said workers at the Kakariki plant had today to get personal items from their workplace.

A Kakariki employee who did not want to be named said "the people here are just gutted and there are long faces everywhere. There will definitely be a few people drowning their sorrows tonight."

Meanwhile, the Australian operations, where Feltex employs 500, have for the moment escaped the chop.

They have already weathered significant cuts under the previous management.

The new owner has refused to rule out further cuts once it takes over.

Godfrey Hirst New Zealand general manager Tania Pauling said: "Over the next few months, we will carefully and closely examine all aspects of Feltex operations."