The worsening unemployment forecast feared in Australia as a result of another round of global crisis appears to be unfolding as early as the second month of 2012.
Global miner BHP Billiton is facing a two-week work stoppage at its Illawarra Coal Appin Mine unit as some 50 supervisors demand for an 18 per cent increase in their pay.
On Thursday, four major Australian companies said they are considering the closure of mines or plants that may result in the loss of hundreds of jobs. These are mining giant BHP Billiton, car manufacturer Holden, household and healthcare product maker Reckitt Benckiser, and ethanol producer Manildra.
About 155 BHP workers and contractors are expected to lose their jobs as the mining giant temporarily reduces its nickel mining operations at Mount Keith in the Northern Goldfields region. The move is because of depressed prices for the metal. Most of the affected workers are in Perth.
Despite the planned one-year shutdown of the mine which will result in 30 per cent cut back in production, BHP's Nickel West will maintain production of concentrate in the short term from stockpiles. It is made possible through a recent redesign that would enable talc-bearing ore processing, said a BHP spokeswoman. Nickel prices slightly increased to $9.20 in recent days, but analysts said it would likely remain in the vicinity of $9 in the coming months.
The firm explained the decision to restructure operations due to persistent weakness in global nickel prices and the continuing strength of the Canadian currency. Besides nickel, BHP said that its aluminium business is also suffering.
BHP said it may redeploy the affected workers to other BHP units such as in iron ore operations. Only 30 of the 155 jobs on the line are based at Mount Keith, the remaining are support service employees in Perth.
The miner reiterated its commitment to nickel and vowed to build a leaner, simpler and more competitive business at Nickel West. The company produced 38,400 metric tonnes of nickel in the December quarter, of which 30,600 were sources from Nickel West.
At Holden, about 100 casual and temporary workers assigned at the company's Elizabeth plant are in danger of being laid off due to the high dollar which has affected the car maker's export sales growth.
To address the problem, Holden Managing Director Mike Devereux said the company would put in place a new shift pattern at its facility in South Australia to improve productivity. He assured the 2,000 permanent employees none of them would be declared redundant.
Holden's general assembly will have only a single day shift instead of the current two, which started in November 2010 and created 80 new jobs, to ensure the global competitiveness of the car manufacturer which made 90,000 vehicles in 2011.
"Holden has set a very clear business strategy to grow sustainably, lower its cost base and make a small car in Elizabeth to ensure we are profitable on domestic production," The Sydney Morning Herald quoted Devereux.
He also sought the assistance of the Australian government amid negotiations by the federal government with Holden of a fresh assistance package to protect the firm's local operations. Last week, Toyota announced 350 job cuts in its Australia operations.
Meanwhile, home care products manufacturer Reckitt Benckiser will axe 190 jobs at its Ermington facility in Sydney as the firm sends to offshore the production of its Dettol disinfectant and Mortein fly spray. RB has been producing these products since 1963.
The company's sales force of 300 will be kept, but those in production will be offered redundancy packages. The Australian Manufacturing Workers Union condemned RB's action.
"This is a decision that's been made in the middle of the night, in secret, and it's a terrible shame for Australian manufacturing capability," ABC quoted AMWU State Secretary Tim Ayres.
He pointed out the RB is a great Australian company with iconic brands - such as Mortein, Dettol, Harpic, Aerogard, Easy Off and Neurofen - which would be difficult to maintain if the products would be manufactured in Korea, China and other offshore countries.
RB Australia Chief Executive Lindsay Forrest acknowledged that the layoffs are distressing to affected workers, but the firm has to initiate reforms because of the significant changes in local operations. She said RB would shift manufacturing its products to Europe, Asia, South Africa and North America, but will use third-party manufacturers to a lesser extent in Australia and New Zealand and retain its consumer contact centre in Australia.
Dick Honan, the chairman of ethanol producer Manildra, is scheduled to visit Thursday the company's Nowra facility to assess the impact of a New South Wales government ruling on its operations. Honan indicated that about 70 subcontractors employed by the plant would lose their jobs and planned expansion plan would be shelved.
On Monday, NSW Premier Barry O'Farrell announced the government would reverse an earlier cabinet decision to ban regular unleaded fuel from July 1 to encourage the use of E10, an ethanol blend. Honan blamed the successful scare campaign allegedly run by oil companies for the policy reversal.
He disclosed that Manildra invested in the past five years $300 million to expand its Nowra plant capacity to meet NSW's ethanol mandate which required petrol companies to ensure that 6 per cent of all fuel sold in the state is ethanol.
When the mandate was 4 per cent, ethanol sales grew 3.5 per cent but when it was increased to 6 per cent in 2011, sales went up by only 3.6 per cent which indicated that the mandate was not enforced by the government.
NSW consumers are happy with the development, but Manildra employees who fear joining the ranks of the unemployed are not.
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