Radio New Zealand - Te Reo Irirangi o Aotearoa

MP 'surprised' Oamaru factory survived so long

Updated at 3:37 pm on 1 February 2013

A Government MP says she is surprised an Oamaru yarn factory survived as long as it did.

A total of 192 employees at Summit Wool Spinners were told on Thursday that they will be made redundant by the end of February this year when the business is sold, although the company may rehire a skeleton staff.

Workers and union officials have said the announcement was much worse than expected, but it was clear that Summit Wool Spinners had been struggling for a long time.

First Union says the owner, Sumitomo of Japan, had lost money at the North Otago plant for the past four years.

National MP Jacqui Dean and Mayor Alec Familton were briefed on Friday morning about the sale by the factory's managers and the buyers, Godfrey Hirst.

Ms Dean said she is surprised and pleased by how long Sumitomo struggled on, given the financial losses it was making.

She said the jobs being lost are a great blow to Oamaru - but it could have been worse if the plant had just closed down and walked away.

Unions held their own meetings with factory management on Friday morning and plan to update their members at a meeting at 3pm.

The plant has been operating for 130 years. Summit Wool Spinners had been trying to sell it for two years due to falling demand for wool carpet in New Zealand and the high exchange rate.

The company is the town's second largest employer.

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