Plant looks to reduce production costs

17:00, May 20 2014

Southlanders are waiting in anticipation to see what affect a multi-million dollar employment dispute will have on the Tiwai Pt smelter, Southern leaders say.

The future of New Zealand Aluminium Smelters was put in the spotlight again when workers won a lieu dispute that will cost the company an estimated $20 million.

Smelter bosses have yet to decide if they will appeal the decision and it is understood a NZAS review will include further cost reductions at the plant.

Southland Chamber of Commerce president Sean Woodward said any business would find it hard to deal with a $20 million unexpected payout.

The region was reliant on the smelter and if its vitality was threatened again, it would be a major concern, he said.

"We hope that this can be resolved relatively quickly."


When uncertainty surrounded Tiwai, it affected the perception of the region by those living outside it.

Less people would want to work in the region and its economic prosperity would be questioned, he said.

"Uncertainty is more of a worry than anything . . .but it's a case of understanding what they plan to do."

Venture Southland chief executive Paul Casson said another cloud over the smelter was a major concern.

The community was talking about what $20m could mean for NZAS and if the company could remain sustainable in the longterm.

People had to be realistic about what it could mean, he said.

NZAS may need to restructure the plant or find other ways to recoup any loss, just like any other business, he said.

While Southland District Council mayor Gary Tong and Gore District Mayor Tracy Hicks were concerned, Invercargill City Council mayor Tim Shadbolt said his council were "keeping out of it" and he had no "personal opinion".

Tong said it was a commercial matter and he believed it was possible for NZAS to continue moving forward.

"Nothing is set in concrete, let's wait and see what happens in the near future."

Hicks said any change downward would be a blow for the region.

"A lot of time, work and effort went into making sure it [the smelter] was viable and I am sure the company is doing as much as it can."

In May last year, 64 Engineering Printing and Manufacturing Union (EPMU) members won an Employment Relations Authority case they took against NZ Aluminium Smelters concerning lieu days.

The company appealed the decision and a two-day hearing was held in December. On Friday, the workers found out the appeal had been overturned.

The Southland Times