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Ripple affect for Gunns workers nationally

The news that Gunns has gone into voluntary administration has ripple effects that extend well past Tasmania’s borders with workers and contractors in Victoria, South Australia and Western Australia also feeling the sting. Sources: ABC South East SA, Australian Financial Review, ABC News

In South Australia Gunns employs about 280 workers at mills in Tarpeena and Kalangadoo, as well as 320 in Tasmania, all of which are facing uncertainty after banks withdrew their support for the company, which is in huge debt.

Construction Forestry Mining Energy Union (CFMEU) representative, Brad Coates, says timber workers in the South East are looking for answers.

“Gunns being placed in administration was not good news, but we haven’t been able to find out really what’s been going on, that’s been part of the problem is that receiver managers haven’t been appointed yet.

“At this stage the company will continue to operate and trade-on but until we sit down with the receivers managers to try and guarantee entitlements and wages, we’re not quite sure what’s going to happen,” he said.

“It’s come as a shock being today because as late as last week we were led to believe that a sale was imminent, in fact I think the words were 95 per cent done.

“We were quite confident that sale was going to have some continuity for our members, however the ANZ bank has decided to withdraw their support,” he said.

Mr Coates called on the South Australian government to take action.

“If the state government doesn’t realise there are some inherent problems at the moment, like log prices and overseas imports, they can’t bury their heads in the sand, they need to make some decisions because losing 200 jobs in this site and perhaps another 500 at Carter Holt Harvey would be absolutely catastrophic for this region.

South Australian Treasurer Jack Snelling said his government was investigating what could be done to safeguard at least 160 jobs at the Gunns’ timber mill at Tarpeena.

He said part of a $27 million taxpayer package rejected by timber company Carter Holt Harvey could be re-directed to help Gunns’ workers.

Tasmanian Premier Lara Giddings expressed sympathy for workers affected by the news but said it also served as “unfortunate evidence” of the need for change in forest industry faced with the worst downturn in its history.

She also took aim at the local Liberal Party opposition, saying it had tried to “deny these challenges”.

“There is now nowhere for [Opposition Leader] Will Hodgman and the Liberal Party to hide – there can be no denying that the ‘head in the sand’ approach will condemn the Tasmanian forest industry to oblivion,” she said.

The state would do everything it could to support employees, Ms Giddings said, adding the government hoped that Gunns’ assets could be sold as going concerns.

“Gunns Limited has a world-class plantation estate, the value of which remains to be realised,” she said.

The Construction, Forestry, Mining and Energy Union national secretary Michael O’Connor said 45 of the 50 employees who were slated to lose their jobs in Launceston were already due to receive redundancies on Friday.

The union was concerned, he said, that the administration could put those entitlements at risk.

“Some of these employees have been with the company for decades, sticking with Gunns through thick and thin,” Mr O’Connor said.

“These workers should be the company’s top priority. We expect either the administrator or the ANZ to ensure they are immediately paid their entitlements.”

“Both Bell Bay (Tasmania) and Tarpeena (South Australia) are a going concern and the administrator needs to do everything possible to keep these sites running until a buyer can be found,” Mr O’Connor said.

Gunns holds a managing stake in a number of timber plantations in WA’s South West, owns a warehouse in Canning Vale and contracts labour to a number of companies in the state’s South West and Great Southern.

WA forestry consultant, David Wettenhall, has warned that several contractors, which helped Gunns operate a forestry scheme across the Great Southern and South West, will face substantial losses.

South Australian-based group LV Dohnt says it could lose a ‘substantial’ amount, well above $1 million.
Mr Wettenhall, from Plantall Industry Consultants, said it will not be the only one.

“The secured creditors get priority treatment and then the unsecured creditors,” he said. “Most contractors would be unsecured creditors [and] would get what is left after, but the prospects of unsecured creditors are normally pretty grim.”

Victorian Premier Ted Baillieu said he was “not sure” how many jobs would be affected in Victoria and would leave any government offer of assistance to Agriculture Minister Mr Walsh.