LAST week Mass Steel management told the Post the company “only had a longterm future in Goulburn.”
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But on Wednesday the Cemetery St business closed and management laid off 15 workers without formal warning, though many had long suspected the move.
They include some whose service stretched back 30 years at the site under predecessor, Kermac Engineering, and others with young families. Managing director Rohan Arnold has blamed a “mix of ingredients” but said the fundamental one was a predatory market in which imports were squeezing out locally manufactured steel.
“There were a number of projects we felt we had an excellent chance of security but the majority have gone offshore,” he said. “With the overall cost of that facility, particularly energy, it became apparent that its long term future was unviable.”
The company’s board made the decision. Workers will be paid their wages but other entitlements are up in the air. Mr Arnold said his company, Mass Australia Pty Ltd, would assess its position and see what was possible.
The Goulburn Post understands employees were given forms to apply for entitlements under a federal government scheme at Wednesday’s meeting. The company is still trading but is only one in a network of related entities. The Post is aware of several local suppliers chasing money from the companies.
Two former employees, Chris Anable and Mario Beltrame have also been pursuing superannuation and long service entitlements allegedly totalling $39,000 from Mass Steel for the past seven months through the Fair Work Ombudsman and Australian Taxation Office.
Mr Anable, a former workshop foreman, claimed most of the workers had not been paid their superannuation. Mr Arnold declined to comment.
Over the past few months, the company has sold hundreds of plant, equipment and furniture items through Grays Online Auctions, reportedly reaping nearly $700,000.
The items were from its Goulburn and Silverdale locations, the latter of which closed at the end of April. Last week, general manager David Campbell told the Post the company was simply shedding non-compliant equipment.
Mr Arnold would not discuss debt levels or other financial details but said the sale relieved some of the pressure. “It’s getting serious,” he said.
“We wouldn’t make such catastrophic decisions like yesterday’s otherwise. This affects workers and families and we wouldn’t have done that unless we had concerns.”
Mr Arnold said while he didn’t formally warn workers what was coming, he had told them of several major contracts that had fallen through, including one involving 10,000 man hours.
He had advised this would have a significant impact and he understood if they sought work elsewhere. Some were deployed to Sydney jobs.
Mr Arnold said the Silverdale location closed only because it was the end of a lease.
Mass Steel negotiated a three year lease on the Cemetery St premises from former operators DME Kermac Engineering in January, 2011. DME had bought the steel manufacturing firm from Kermac in mid 2005 after the latter went into voluntary administration in March 2004.
Employee numbers went from 10 to a high of 40 but have diminished in recent time. Former workers like Chris Anable, who was retrenched last November, have lamented the loss of Kermac’s “proud manufacturing tradition.”
“They don’t make things there anymore. They just fix them up,” Mr Anable told the Post.
Mr Arnold said his firm had imported Vietnamese and Chinese steel but had always brought it up to Australian standards.
“The steel we import is very different to the bargain basement products that unfortunately our clients are taking,” he said.
“We do value adding to make sure it meets standards but the perception that it’s a big saving on the imported product is incorrect.”
He described it as a predatory market in which projects were increasingly opting for overseas steel.
Three years ago local manufacturers were selling it for $3000 a tonne, but clients could import steel for under $2000 a tonne today.
Two years ago a job using imported steel was unusual, but today projects worth as little as $150,000 were commonly using the product.
While the volume of work had shrunk, the number of suppliers hadn’t.
“…What’s happening to the industry is very, very sad and I say that with a lot of passion from someone who’s been in the industry 20 years,” Mr Arnold said.