Workers stunned and stung

Infracon liquidation rankles out of the blue

KELSEY WILKIE
Last updated 11:00 23/08/2014
Infracon
DAVID UNWIN/FAIRFAX NZ
DOWN IN THE DIRT: More than 200 jobs are in danger due to council-owned roading company Infracon being placed into liquidation.

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Workers left in limbo by the impending liquidation of Infracon are in shock, with many feeling abandoned by Tararua District Council.

It was announced yesterday the council-owned roading company is to be placed into liquidation, putting more than 200 jobs at risk in Dannevirke, Hastings, Waipukurau, Woodville and Palmerston North.

Central Amalgamation Workers Union representative Mark Anderson said the news came as a shock to workers, who were told on the same day as the announcement that their jobs could be at risk.

It "came as a complete bolt out of the blue" to the 120 union members.

"We will be doing our best to try and help workers secure jobs, it's not going to be 200-odd though."

It has turned into a waiting game for workers, their jobs now on the line. A liquidator is expected to be appointed by Wednesday.

Infracon supervisor Peter Kreegher said the workers are all feeling pretty low.

"They feel like the council really shit on us."

Infracon has had losses for the previous three years and the cash flow position meant the company could not continue to trade as it had been, Interim Infracon board chairman and Tararua District Mayor Roly Ellis said.

"After receiving a letter from its bank, withdrawing financial support from Infracon, further negotiations by the interim board and the bank had been unable to resolve the situation."

Ellis said Infracon did not owe any creditors and was "up to date".

Council chief executive Blair King said the decision was not a sudden one, but the board decided to act early to ensure the liquidator had the best chance to get a good outcome.

He said a view had been expressed to the council that it should have provided support to the company, but this would have meant a cash injection paid for by ratepayers.

"Would the ratepayers want to inject a level of funding, that would extend into the millions, into a company that has a sustained period of trading losses, to keep those jobs in that company?

"That is not one of the purposes of the local government."

King said even if the council had offered a financial lifeline, it would have required public consultation and this would not have been possible in the time frame between the banks withdrawing lines of credit and the position the board found the company in.

Dannevirke Chamber of Commerce chairman Suresh Patel said it is an unsettled time for the small town. "It's a blow for the community.

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Dannevirke's been such a resilient community over the years, they've always banded together, you just wonder how much resilience they can handle at times."

He said people would be likely to start looking at employment options elsewhere.

Infracon contract manager Grant Logie said the company had been trading well for the last four months, which made the liquidation decision "mystifying".

An assistance hub for employees will be held in Woodville next week from Tuesday to Friday, 10am to 2.30pm, with job registers, and CV assistance. Appointments with Work and Income would be available.

Infracon is one-third owned by a Central Hawke's Bay District Council company, with Tararua District Council owning two-thirds.

- Manawatu Standard

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