Mars proposes Whanganui factory closure, putting 152 jobs on the line

Tuesday, 1 October 2019

American-owned Mars has proposed closing its Whanganui pet food factory in 2020.

Manufacturer Mars plans to close its Whanganui pet food factory at the end of 2020, which would leave 152 workers without jobs.

The company would move production of its Whiskas cat food pouches to Thailand, ending 26 years operating at its Castlecliff facility in Whanganui.

The American family-owned company took over the factory from Lucky Petfood in 1993, and last year staff took part in celebrations to mark 25 years in the city.

Mars' supply transformation lead Dan Pope said the company was still in consultation with staff but if the proposal went ahead, the company planned to continue operating in Whanganui to the end of 2020.

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He said the Whanganui factory was the company's only manufacturing facility operating in New Zealand but the company employed about 250 staff working in sales, logistics, marketing and finance, none of whom were affected.

Factory worker Joanne Ratana said the news at Monday's meeting had come as a shock.

'I think that was the last thing most of us were expecting to hear,' she said.

Ratana said workers had been expecting to go from the current four-shifts, seven-days-a-week, to three shifts from sometime next year.

By the time the factory was proposed to be closed, she would have been with Mars for 20 years, including time as a temp and permanent employee and she was worried about her options.

'I'm not old enough to retire and would have to look for another job of some sort,' she said.

Ratana was not optimistic about the chances of a counter-proposal being accepted.

'I don't think they can do anything because our tonnage output has been below what was needed for some time.'

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Mark Ward says a decision to close Mars pet food factory doesn't reflect the economic growth in Whanganui at present.

George Larkins, from the manufacturing and construction workers' union, said he was notified about the proposal late Monday.

Larkins said meetings were scheduled for next week to talk to workers about what counter proposals might be possible to avoid the factory's closure, and the union would be responding to the company afterwards.

Workers were on a collective employment agreement which Larkins said had a fairly generous redundancy compensation provision within it.

Pope said if the closure went ahead, Whanganui staff would be paid their full legal entitlements and redundancy compensation. Mars would also provide retraining, assistance in finding new jobs and counselling would be provided, Pope said.

Larkins said the union had bargaining occurring this year on behalf of the Mars workers as their collective agreement expires in December.

'So we'll be negotiating the renewal of that collective and it will become a vehicle to explore the current redundancy provisions and put claims that might improve our members' rights and compensation in that area.'

Larkins said workers and the union had known for some time that the Mars factory was under pressure.

The Mars company pays its 152 Whanganui factory workers above the living wage.

'The amount of product going through this factory is below its capacity, which creates a bit of an issue to profitability, when you're running an outfit bigger than what you're producing.'

Over the past three years, the union had tried to address the problem by introducing a 'flexible hours' provision which meant people could work extra hours voluntarily and put those hours aside for days when there wasn't enough production to employ the regular number of staff.

'We knew things weren't well and essentially, from our perspective, it's the parent company not giving the Whanganui factory enough product to manufacture.'

Larkins said it had been anticipated Mars would want to move from a four-shift operation to three-shifts.

'The problem was, the volume was greater than could be handled by a three-shift operation but not big enough for a four-shift operation.'

Mars has been operating its Whanganui factory for 26 years.

It would be sad to lose a company in Whanganui that paid above the living wage, Larkins said.

'Losing a well-paying, large employer in a small community, it's very disappointing that this is occurring.'

Whanganui and Partners chief executive Mark Ward said the proposal to close the factory was not anticipated by the economic development agency.

'The decision to relocate was made offshore, reflecting the global nature of the particular business.'

He said the reasons Mars had given for relocating, which were a desire for closer proximity to Asian markets and lower operating costs, made it seem unlikely that anything could be done to keep the factory in Whanganui.