The economic downturn struck West Otago with a vengeance yesterday as the region's biggest employer confirmed it will slash more than half its workforce of 110 staff in one of the biggest economic body blows to hit the area in recent times.
It was a choice between losing 65 jobs or closing the Blue Mountain Lumber plant altogether, the company said.
And it will be a Black Friday this week, when workers find out which 65 jobs will be axed from the sawmill as the company unveils a radical restructuring it hopes will keep the Conical Hill timber plant open in the long term.
Management delivered the bad news to staff at the sawmill site at lunchtime yesterday then gave them the rest of the day off. Staff have been offered voluntary redundancy, which would take effect from early next month.
Many of the staff live either in nearby Gore or Tapanui and business and community leaders in both centres agreed it was a major blow.
National Distribution Union organiser Ken Young will hold an on-site meeting at 8am today and the company has arranged for support agencies and Work and Income New Zealand to meet staff in coming weeks.
Blue Mountain Lumber is owned by Ernslaw One subsidiary Winstone Pulp International, whose managing director, Dave Anderson, flew down from Auckland to address staff yesterday. He described the mood of the meeting as "pretty sober", calling it one of the saddest days in the industry for some time.
In a statement, he said the economic climate, coupled with long-standing challenges facing the mill, meant the company needed to reduce staff significantly.
Although staff would be consulted over the next two days, he expected 65 jobs would go.
By radically downsizing now and focusing on products with the potential to sell well in existing markets, Mr Anderson said the company would attempt to make the mill viable.
He told the Otago Daily Times the idea was to mould the various sawmill operations into a "single workforce" where those staff left would work together to create products.
"We will need those people to have a full range of skills. We have to rebuild."
Staff may work three days a week in the green sawmill area then transfer to the drying area and also help with the final preparations for the timber before it left the plant.
Falling volumes of timber and the lack of demand had forced the company's hand, Mr Anderson said. He also said management had considered taking the "easy option" and closing the entire plant but it was determined to ride out the tough times and take the tougher option and try to survive.
• Blue Mountain Lumber
Location: Conical Hill, 9km east of Tapanui.
- Built in 1949 for the New Zealand Forest Service.
- Malaysian company Ernslaw One bought the plant from the Government in November 1990.
- Now owned by an Ernslaw subsidiary, Winstone Pulp International.
- The sawmill was once the biggest South Island producer of Douglas fir timber but recently re-focused its energies into its new Blue Mountain Oregon brand.
- Yesterday's layoffs biggest to hit the company in the past six years. In March 2003, 80 job losses announced, but some of those workers were re-hired in the ensuing months and years.
- Workforce at high of 210 in mid-2003. New staffing level of just 45 by early next month.
