Mataura meatworkers who are transferred to the company's Lorneville plant near Invercargill will be forced to take pay cuts, their union claims.
On Friday the Alliance Group announced a proposal to shift its Mataura sheepmeat processing to Lorneville, which was expected to affect more than 300 jobs.
Workers would be offered the opportunity to transfer to the company's Lorneville plant, join the beef processing at Mataura or take redundancies, which have not yet been discussed.
New Zealand Meat Workers' Union general secretary Graham Cooke said workers transferring to Lorneville would take a pay cut.
"Mataura workers will start at the bottom of seniority. A Mataura worker will earn significantly less than a Lorneville worker."
The cost of travelling to Lorneville would be "highly uneconomical" for many workers, he said. Moving from lamb to beef at Mataura would also mean less pay.
The union would approach the company about running a smaller lamb operation during winter months at Mataura and voluntary redundancies would also be discussed, Mr Cooke said.
Alliance Group chief executive Grant Cuff said workers who wanted to transfer to a similiar role at Lorneville could have different pay rates.
Pay rates in every plant were varied and depended largely on the types, placement and volume of equipment, he said.
Mr Cuff would not say whether workers would be worse or better off than they were at Mataura.
The number of positions available in beef processing at Mataura would depend on the turnover of current staff, he said.
Otago Southland Employers Association chief executive John Scandrett said Alliance was responding to industry changes. "The fact that the company is willing, in such circumstances, to discuss the connected issues with employees, and would like to see that majority move to Lorneville, is indeed positive for all involved."
Alliance Group is expected to discuss the proposal with the Meat Workers' Union this week.
LAMB DECLINE BLAMED
The proposed closure of lamb and mutton processing at Mataura was "absolutely necessary", Alliance Group chief executive Grant Cuff said.
The co-operative expected to save "tens of millions" of dollars every year by tackling processing overcapacity in the meat industry and reconfiguring its assets to livestock availability, Mr Cuff said.
The proposed closure of lamb and mutton processing at Mataura would affect about 325 staff and though most had the option to transfer to the Lorneville plant there were no jobs for the 65 management, supervisory, administrative and tradespeople who were expected to take redundancy.
Speaking at Alliance's first shareholder meeting in Gore yesterday, Mr Cuff said the decision to transfer processing was not done lightly.
"It's not something we wanted to do but it was absolutely necessary. I know farmers have sent their stock there for generations - we did not do it to upset people."
Farmers spoken to before the meeting said it was a sign of the times.
Willowbank farmer Donald Morrison, who kills about 12,000 lambs through Alliance each year, said the industry had to face reality in light of falling sheep and lamb numbers.
"I feel sorry for those who have lost their jobs - the timing has been hard.
"But we have to face reality and look at where the lamb numbers are," he said.
Alliance Group chairman Owen Poole said though most of the sheep and lamb processing would be transferred to Lorneville, some stock might be sent to Pukeuri, Waitaki, depending on the geographic location of the clients.
The past year had been challenging and difficult for sheep meat with many consumers substituting lamb with lower value protein.
The co-operative would record a loss, when it announced its financial result in mid-November, and there would be no farmer distributions for the 2012 year, he said.
Mr Cuff said a good lamb would be worth about $90 this season but could fall to $85 by Christmas because of the volatile exchange rate.
"Back in August we were looking at a $95 lamb."
Alliance also announced several initiatives to recognise and reward committed supply.
Suppliers would be categorised as platinum, gold and silver depending on whether they supplied all their stock, one species or a percentage of their livestock to the co-operative.
Other initiatives included an upfront payment in October of $20 per head for up to 80 per cent of lambs supplied and a fixed price option with 100 per cent of the schedule paid at time of processing and pool payments would be dropped.
- © Fairfax NZ News
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