Newcastle shipbuilder Forgacs to cut 100 jobs

[MikeJames]

Newcastle shipbuilder Forgacs to cut 100 jobs

BY LIZ FARQUHAR - ABC News
June 27, 2014, 1:27 pm

Newcastle shipbuilding firm Forgacs will cut about 100 jobs from its air warfare destroyer program.

The company has called for voluntary redundancies with jobs in trades, management and administration to go.

Forgacs says it has been open about plans to scale back its Newcastle workforce in the lead up to September 2015, when work on the air warfare destroyer blocks is complete.

Unions have been calling on the Federal Government to build a fourth destroyer and bring forward new defence contracts to avoid a two-year downturn in work.

But hopes were dashed recently when the Government announced it would build two new supply ships overseas.

Forgacs chief executive Lindsay Stratton said without naval orders in the pipeline the company's options were limited.

Earlier this year the company warned if it did not get new contracts it would be forced to close next year leaving 900 people out of work.

Australian Manufacturing Workers Union organiser, Daniel Wallace says the decision to send the supply ship contract overseas sends a poor signal to the industry.

He says Forgacs workers are devastated that the cuts are starting.

"It's not people that are 60 to 65 on the back end of their career looking to retire," he said.

"These are men and women between the ages of 20 and 40, married with kids.

"This was their opportunity to set up a life, and it's just devastating."

Mr Wallace says the news for Forgacs will only get worse unless there is help from the Federal Government.

"We've seen their projected job numbers for the next 12 months and it just looks like a sliding scale down to potentially zero.

"They've really struggled with no real commitment from the Federal Government to look after shipbuilding.

"They recently won a contract which has probably saved 30 redundancies with the Tongan landing craft.

"But with a few more ships, we definitely could have avoided the redundancies that are going to occur over the next couple of weeks."

[glenhowells]

If the government had made a decision on the replacements for the LCH's which is long overdue this may have saved these jobs and ship building in Australia in general. Other projects that should be on the board are the OPV's to replace the Armidale class. Anzac will be 20 years old soon future frigate project needs to start asap. We could have built the 12 LCM's for the LHD's in Oz. Look back after to when Swan and Torrens were built to replace Voyager replacing 1 ship with 2 great idea. The population of Australia is over20 million time to increase the size of the defence force build more assets and save the jobs.
Cheers Glen

[MikeJames]

I have to disagree.

Why should the Australian taxpayer pay a 250% markup on the cost of building a ship in Australia simply to guarantee a few cyclical jobs?

The local build premium for the AWDs was supposed to be no more than a 50% markup, but it's not that, never been that and shows no sign of coming down from the current 250%.

The US Navy's Arleigh Burke was offered to the RAN for $500million each straight off the US production line.

If they'd been built here they would have cost 1.25 billion per ship. For the cost of building three here in Australia we could have afforded seven and a half of them from the US.

I'd rather have seven Burkes delivered at the rate of one per year, than only three. I'd settle for five or six AWDs built in Spain than three built here for the same cost.

To misquote Joseph Stalin, 'quantity has a quality all of its own'.

Mike