Hundreds of jobs to go at Timaru’s Alliance Smithfield meatworks plant under new proposal
Friday, 27 September 2024
Hundreds of jobs at Timaru’s Alliance Smithfield meatworks plant are set to go under a new proposal put forward on Friday.
A consultation period is due to run until October 11, with a final decision to be made by October 18 - a 21 day process.
Alliance Group, which owns the plant, said if the proposal goes ahead it will affect approximately 600 staff at the plant, which has been owned by Alliance since 1989.
Impacted staff would be offered the opportunity to apply for re-deployment at other plants, but a significant number of redundancies would be expected, the company said.
Prime Minister Christopher Luxon said the announcement was “really sad for the communities impacted, and around Timaru”.
He blamed the recession, inflation and high interest rates, and said Alliance had “its own challenges”.
“This is sadly the consequence of that and I feel for people hearing that news. It is quite shocking,” he said.
Alliance Group chief executive Willie Wiese said the proposed closure was due to a decline in sheep processing numbers as a result of land-use change, which had resulted in surplus capacity in the company’s plant network.
“We know our people at Smithfield, their colleagues and the local community will be devastated by this proposal,” Wiese said.
“Smithfield has a long and proud history, having been part of Alliance’s network for more than 30 years.
“Our priority is to support affected employees during this immensely difficult period. We will also work closely with local authorities and support agencies and ensure the local community is informed, supported, and included in discussions.”
The 139-year-old Smithfield plant is the company’s oldest site and requires significant investment in repairs and maintenance, Wiese said.
Alliance called all staff members to a Friday morning meeting via a message sent on Wednesday night.
The meeting was held at the community hall rather than on-site at the company’s plant overlooking Timaru’s coast.
All the windows to the hall were covered with brown paper and several security guards were on site.
‘It’s going to hurt’
After the meeting, staff began exiting the hall with envelopes in hand.
One worker leaving said there was a collective sigh as the news was delivered. He believed the proposal would see all operations finish in December.
Another told The Timaru Herald that they had been told not to talk to media, and others did not wish to be named.
A young husband and wife who both work at the plant said they loved their jobs.
“Now we have no job, there is some pressure because we have a mortgage to pay. The mortgage is very high,” she said. “We also worry about Timaru with lots of people having no jobs.”
Another, who worked in yards and had been at the plant four to five years, said he “expected it to happen”.
“I’m 59, which makes it exceptionally hard to get jobs at my age,” he said.
A 28-year-old with a mortgage, a wife and 6-year-old twin girls said he wasn’t feeling the best. He had been at Smithfield for 11 years.
“It’s almost like home,” he said.
“We’ve got another month to wait and see if it’s gonna shut down or not but they just twisted their words like they normally do. It’s pretty much the end though.”
Coral, 58, and Lyn, 61, had been at the plant for 20 years and 17 years respectively.
“We are feeling pretty gutted really. It’s pretty bad,” Coral said.
“It’s going to be hard for me to get a job,” Lyn said.
Jayden Mobberley had worked at Smithfield for about six years and
said while losing his job was tough, he knew of others in tougher situations.
“There’s other people around here who have families to feed - it’s going to hurt them the most.”
‘A significant blow’
Timaru mayor Nigel Bowen, who was at the Caroline Bay Hall on Friday morning, said the closure was not what anyone wanted to hear.
“This is a really sad day for our district, and my sympathy goes out to everyone who is affected today.
“There is a long history of meat processing at this site, and it has been a major employer and contributor to the local economy. This wasn’t the news anyone in our community wanted to hear.”
“This is a significant blow our community, and we won’t know the long term effects of this, but as council we need to continue to work with industry to ensure this is a district that continues to welcome and encourage development.”
Bowen said his focus now was on looking at what could be done to support those out of work.
“My focus at this time will be working with my colleagues in business and economic development to see what support can be provided to those affected.”
Bowen told Newsable there was a genuine sense of shock for the workers, despite swirling rumours over the past few weeks.
‘It’s just massive’
NZ Meat Workers Union southern region senior organiser Bill Watt described Friday’s meeting outcome as “huge” for the Timaru District.
“Clearly there was going to be some form of closure, but we were hopeful that it was a partial closure and not the full closure down of Smithfield as such,” he said.
He said up to 16 union representatives attended the meeting - 12 of them employed at Smithfield.
Watt said there would probably be more than $1m in wages per week coming through the plant in Timaru.
“Obviously tax comes off that, but it’s just massive for a place like Timaru.'”
He had spoken to some union members following the meeting and said it may take a while for the news to sink in.
“I think probably tomorrow [Saturday] is when people will start to realise just what this means and what their options are going forward. There’s over 600 people affected.”
‘A massive ripple effect’
South Canterbury Chamber of Commerce chief executive Wendy Smith said it was a “devastating day for all those affected and the for the community as a whole”.
“This is a heart-wrenching black Friday,” Smith said.
“This will have a massive ripple effect across the whole district, impacting many many families, a number of who have worked in the plant across multiple generations. The economic impact will also be significant as the downstream ramifications are felt across a wide range of support industries.”
Securing a solution to keep the plant open appears unlikely and it appears that the decision has been made, she said.
“As with all businesses, and especially one of this size and significance, all avenues would be explored to understand how this could have been prevented.”
The talk of the town
On Thursday, Wiese, the chief executive, was tight-lipped about the nature of the meeting, confirming only that the company had made the request for all employees to attend the meeting.
“It would be inappropriate to comment further,” he said.
The future of the Smithfield plant, and its possible closure, has been the talk of the town in recent months.
When asked in April about its future, Wiese said: “We have no plans to close any of our processing plants including Smithfield. Smithfield remains an integral part of our processing network.”
A $97.9m loss
Last month, Alliance confirmed the closure of its Timaru and Ōamaru butcher shops, with 12 employees affected.
At the time, Alliance’s general manager of New Zealand sales, John Skurr, said the decision would enable the company to better concentrate on its primary business activities, “which will ultimately strengthen our company for both our people and our farmers”.
In December, Alliance announced a $97.9 million annual loss that coincided with the company’s 75th anniversary.
The loss followed a record result in the previous year, then group chairperson Murray Taggart said at the time.
He said a collapse in the global red meat markets, reduced revenue of about $2 billion, and the $97.9m loss had brought urgent changes for the company.
In September 2022, Alliance was fined $57,000 for causing “serious harm to an environment of high value and vulnerable sensitivity” near Caroline Bay.
It was also facing four charges that allege the discharge of contaminants into a nearby creek and the Pacific Ocean north of Caroline Bay.
Environment Canterbury laid the charges against the company’s Smithfield plant following incidents related to ruptures in the same pipeline reported on December 7, 2021, and March 16, 2022.