Cable-maker may lay off more workers

Christchurch manufacturer General Cable is declining to confirm union reports it is to cut about 100 jobs as it sets out on an 18-month transformation process.

Managing director Chris Birkett said there would be a reduction in the workforce in 2011 but he was not in a position to give a number now.

Various elements were involved in the final outcome, and the company was consulting in good faith with employees.

Engineering, Printing and Manufacturing Union assistant national secretary Ged O'Connell said workers had been told 100 manufacturing jobs would be cut.

The company is a subsidiary of United States-listed General Cable Corp. Operations in this country include the production of energy and communications cables, and of building wire-type products. The New Zealand and Australian businesses are run from Christchurch.

About 350 staff are based in Christchurch, with about 20 elsewhere in this country, and nearly 60 doing distribution and sales across the Tasman.

Mr Birkett said the transformation would involve $5 million in capital spending to upgrade equipment during 2010, while a second phase would focus on productivity improvements and responsiveness to market demand.

The manufacture of some lower margin products made for the Australian market would be transferred to plants the company had in Asia, he said.

The New Zealand activities of General Cable had not made money at an operating income level for the past two years, with reasons for the financial underperformance including margin pressure and volume reductions in some markets.

The Australian market was also more competitive that in this country.

"I believe we have to take corrective action to have a sustainable manufacturing presence. We need to change. This is a response to that," Mr Birkett said.

"We have a multi-national company investing capital into New Zealand because we believe there is a sustainable future. That's a very positive sign for manufacturing in New Zealand."

Part of the transformation involved consolidating two smaller sites in Christchurch into two larger manufacturing units in the city.