Closures and job losses

Recent factory closures in job-depressed areas of Melbourne effectively 
demonstrate how removal of tariff protections are devastating Australian 
manufacturing industries. They also show how the capitalist system will 
heartlessly dump workers, leaving them with no money and no future, when 
the bottom line — profits — is crossed.

A case in point is Guerdon Industries Pty Ltd, in Cheltenham, Melbourne, 
which makes rubber soles for shoes. The workers were left with nothing 
after the company went into voluntary administration on February 11. It 
will now go into liquidation.

According to National Union of Workers (NUW) Branch Secretary Drago Ilic, 
this means that "workers stand to lose over $1 million in entitlements due 
to the fact that the law fails to protect workers in these situations".

The 43 workers at Guerdon, who are members of the NUW, were informed on the 
morning of February 11 that the company had ceased trading and that they 
were all terminated.

The workers have not been paid wages for the last week of work. They have 
also not received the agreed redundancy payments negotiated by the union. 
On top of that, for the last one or two months, the company has failed to 
make superannuation contributions on behalf of the workers. In some cases, 
money has been deducted from wages but not paid into superannuation funds.

Thanks to Howard's changes to social security legislation, these workers, 
who are not highly paid, are unable to access any social security benefits 
unless they have spent all their savings.

Many of the workers have more than 15 years service with the company and 
now face the very real prospect of losing all their entitlements which 
include lost wages, superannuation, long service leave, annual leave, and 
redundancy entitlements.

For union delegate Lil Wilson, who has worked with Guerdon since her 
arrival in Australia 17 years ago, the loss of redundancy entitlements is 
just over $40,500. In terms of the entire workforce the total loss is 
$1,025 million.

For the majority of workers at Guerdon this termination and liquidation of 
the company will mean a premature end of their working life, as there is 
little or no prospect of re-employment in an area already suffering high 
unemployment.

The NUW said, "It is clear that workers will continue to suffer and bear 
the brunt both economically and emotionally of company closures unless the 
Government legislates to protect workers' minimum entitlements.

"In an environment where the Government preaches `mutual obligation', it is 
imperative that employer obligations to protect employees' entitlements be 
protected through legislation passed by the Federal Parliament", said the 
union.

Another closure was announced last week, that of a fibreglass factory, also 
in the south-east of Melbourne, an area that relies heavily on its 
manufacturing industries for jobs. The Aurora Glass Fibre plant in 
Dandenong will close next month, putting 330 people out of work.

Amatek, the parent company of Aurora, said that Aurora made fibreglass for 
boats and swimming pools, but was "too small to compete" in the deregulated 
global market.

Amatek, which also produces building products such as concrete pipes, 
laminates and wood panels and fibreglass insulation — which uses a 
completely different process — would not continue to make Aurora's 
fibreglass products.

Amatek's Chief Executive, Dr John Nolan, said that in the last ten years 
the tariff on imported fibreglass products has fallen from 40 per cent to 
just five per cent.

These most recent closures in the area are only the latest in what has been 
an ongoing tragedy.

NUW Industrial Officer Tim Kennedy told The Guardian that as well as 
the personal tragedy facing these workers, the dwindling of the 
manufacturing sector spells doom for jobs in the long-term.

He said that traditionally the manufacturing sector has not only provided 
jobs directly in manufacturing, but has also stimulated job creation in 
related businesses.