Job Cuts Hit Australia’s Construction Industry

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By Vittorio Hernandez | February 10, 2012 2:19 PM EST

More jobs in Australia continue to be placed on the chopping block as the axe moves to the construction industry. Kell & Rigby, one of Australia's oldest building firms, announced on Thursday the loss of 500 jobs.

It is the latest casualty since a growing number of Australian firms from the mining, manufacturing, retail and banking sectors laid off hundreds of workers due to the strong currency, weak prices and low consumer confidence.

It was not just 500 jobs that were lost but the 102-year-old Kell & Rigby also had to close its business while leaving many workers and contractors unpaid. The century-old firm was involved in some of the largest construction projects in New South Wales (NSW) such as the war memorial in Sydney's Hyde Park and the renovation of Sydney Town Hall.

James Kell, the chief executive officer of the construction firm, said Kell & Rigby is still looking for a solution. The company, expected to go into liquidation on Friday, was negotiating for refinancing for several months, but negotiations fell through on Wednesday.

Reports identified the potential trading partner as a Chinese investor and another Australian firm named FKP.

The company, which had an annual turnover of $150 million, suffered from losses on two apartment projects, prompting its board to stop work across 12 ongoing projects in NSW, Canberra and Queensland.

"The firm has been through two world wars and a depression - it's not over yet," Macquarie Radio quoted Mr Kell, the great grandson of the company founder.

Some of those who lost their jobs have been with the construction firm for decades.  The closure of an icon in the industry led the Construction, Forestry, Mining and Energy Union (CFMEU) to call on the NSW government to intervene.

"This is a company that's been around for over 100 years, that's created more than 1,000 apprenticeships, has been a very decent company and we still haven't heard from Barry O'Farrell," CFMEU NSW Secretary Brian Parker said.

Mr Parker said the NSW government must stimulate some money for Kell & Rigby to keep the company open. He estimated that more than 50 businesses would also suffer from the collapse of the 102-year-old company.

While the mining sector is in a better position than the construction and lay offs are still far and few in between, mining giant BHP Billiton has been hit by labor restiveness in the past few months. Employees of BHP will begin on Wednesday a seven-day strike at its Queensland coalmine to protest pay and work conditions.

The work stoppages involving seven BHP Mitsubishi Alliance mines will last until Feb 22. The CFMEU called on BHP Chief Executive Marius Kloppers to directly intervene in the 15-month old labor row.

"The workers here feel they've been left with no choice but to ramp up industrial action. BHP is making enormous profits out of its coking coal operations in central Queensland, but it doesn't want to listen to its workforce. We need to make sure this mining boom doesn't come out at the expense of workers' safety and the interests of our mining communities," The Australian quoted CFMEU District President Stephen Smyth.

However, Mr Kloppers insisted on Wednesday that BHP's right to manage is sacrosanct. The labor row is centered on calls by the union to limit the use of contractors, introduce extra break for workers and the appointment of safety officers.

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