A timber manufacturing giant that earlier shut down its Whangārei sawmill is likely to cut around 163 jobs at another location in an initial restructure.
Carter Holt Harvey has not ruled out shutting its Laminated Veneer Lumber (LVL) plant employing 325 staff in Marsden Pt as part of a proposal to restructure the business into a smaller domestically-focused operation.
The bombshell announcement yesterday came just as workers returned to work under level 2 lockdown and three months after the company - owned by billionaire businessman and New Zealand's richest man Graeme Hart - decided to shut down its Whangārei sawmill, which employed 111 staff and contributed $5m to the local economy.
CHH chief executive Praful Kesha blamed the restructure on the unprofitable export side of the LVL business, which accounted for about 70 per cent of the production and sales volume, saying the business could not continue in its current format.
"While total closure has been considered and still remains an option, we have identified that a smaller, domestic-focused, business may be more viable than the current business - which serves both the export and domestic markets - with a better chance of long-run survival."
The LVL plant employs 325 people. If it is restructured in the way envisaged, half of the employees will lose their jobs. All jobs will go if the plant shuts down.
The cost of raw materials and a consistently high New Zealand dollar compared to the Australian dollar have had a major impact on exports.
Kesha said a final decision on whether restructure or complete shutdown was the preferred option would be made after feedback was considered.
CHH's Whangārei sawmill has ceased operation and the future of about 15 staff the Amalgamated Workers Union said had been offered redeployment at the LVL plant was now up in the air with the restructure.
Kesha wasn't prepared to go into more detail around the restructure as consultation was scheduled to start shortly.
The E tū union represents 150 workers at LVL and its Northland representativ, Annie Tothill, said it seemed CHH wanted to focus more in areas it wanted to make a profit.
She was informed of the impending restructure by phone call on Monday evening and said she would organise a meeting with E tū members and management in the coming days.
"It's very difficult for the Northland people who are hyper-sensitive to employment prospects given the present Covid-19 climate," she said.
Ruakākā Economic Development Group chairman Peter Batten said it was "pretty devastating" for a large number of workers to lose their jobs in a small close-knit community.
"It's huge for this area because the LVL plant is one of the largest employers here and most of the workers are locals. What else can you say? Unfortunately, a lot of forestry work in Northland is starting to slow down but they are picking up in Waikato and both people and companies are following the mighty dollar.
"And that is why we need a big infrastructure boost in Northland, whether it's rail or road. Until that happens, closures will continue to happen. Northport is building but it needs support from other sectors such as forestry to keep going," he said.
Northland Chamber of Commerce chief executive Stephen Smith said the timing of the announcement "sucks" and questioned why Northland should have to bear the pain of a volatile export market and subsequent job losses.
"The fact Carter Holt Harvey has closed one business and could potentially close another in the same geographic location in quick succession is commercially and socially irresponsible. At the end of the day, they are a part of the community," he said.
Smith said it would have been nice for CHH to consult with the wider community for views on what could be done to save jobs.
Forestry Minister Shane Jones said while job losses at LVL were sobering news, the restructure provided an opportunity to boost the local market and wood-processing industry.
"In fairness to Carter Holt Harvey, they have invested in other plants around New Zealand's forestry network and the products they sell have a strong level of interest in Australia - and we're not discounting the prospect that there could be other buyers."
Jones said he accepted at face value the explanation given by Kesha on the reasons for the restructure.