Ruapehu mayor Weston Kirton says he is deeply concerned for local communities devastated by news that two timber mills in the central North Island will close permanently.
Winstone Pulp International (WPI) announced today that it will shut down Karioi Pulpmill and Tangiwai Sawmill because of crippling electricity prices.
WPI is the largest employer in the Ruapehu district. About 230 jobs are on the line.
Mill workers met with WPI representatives today, two weeks after the company paused activity because of rocketing wholesale energy costs. They were informed consultation is about to begin over the permanent closure of both mills and to expect redundancies.
Kirton said the district was reeling at the news. Locals would face severe economic and social consequences.
“This has come as a bombshell. So many subsidiary businesses are associated with the mill – real estate, trucking, small businesses – we’re going to lose all that.”
He warned the closure was the tip of the iceberg, with other export manufacturers “on the brink” because of similar pressure from unsustainable energy costs.
“It’s a crying shame that it’s got to this point because of a pricing mechanism.
“This is a long-term issue, a cancer that’s been going on for years. It will affect all of New Zealand.”
Kirton demanded urgent Government intervention.
“The Government needs to own this. Fixing the New Zealand electricity market must be the Government’s No 1 priority.”
He said long-term systemic and policy failures must be addressed and called for an immediate Government lifeline “to keep the lights on” at WPI.
“If we cannot bring energy costs in New Zealand down to a level where our manufacturers, service sector and exporters can compete internationally, all our growth and employment aspirations are doomed before they even start.”
First Union and E tū representatives also urged the Government to intervene to protect manufacturing infrastructure and jobs from gentailers’ “uninhibited profiteering”.
Liam Malone, First Union organiser for the two sites, said workers were devastated.
“Around 230 directly-employed jobs could be cut … but there would be further job losses for adjacent staff like contractors and even bigger losses for the wider Ruapehu community, where these mills are the lifeblood of the local economy.”
Malone said the Government stepped in with bailouts to bolster Ruapehu skifields.
“We want to see the same concern and priority given to these workers, who keep the same region alive throughout the year and consistently prop up the local economy.”
Daniel Abernethy, an E tū delegate and electrician at the Karioi Pulpmill, said workers were uncertain about their future employment within the district.
“It’s heartbreaking for all of us and our families, but we’re not giving up yet. We are hopeful that there may be some intervention from the Government.”
Jude Sinai, a worker at the Karioi Pulpmill and First Union delegate, said mill workers were already talking about emigrating to Australia given the lack of comparable manufacturing jobs in the region.
“This is horrendous not just for us but for all Ruapehu locals – the teachers, schools, doctors, supermarkets, and everyone else in the region who has relied on these mill jobs to support our local economy.”
LDR is local body journalism co-funded by RNZ and NZ On Air.