By Christine de Kock
AN American company has dealt the cruellest of blows to more than 460 Feltex workers who believed their jobs were safe.
Honeywell, a US supplier of nylon yarn is refusing to supply more material until Feltex pays up on a debt of $8.7 million.
The Honeywell move put a dampener on a weekend of joy for the beleaguered workers.
Carpet manufacturer Godfrey Hirst had stepped in to buy Feltex and save more than 460 jobs at sites in the City of Maribyrnong.
However, a spokesman for Jim Walsh, Godfrey Hirst’s finance director, said the new situation could result in 400 workers at the Tottenham site being “stood down”.
He said workers would not necessarily be left unemployed but offered short periods of work until Godfrey Hirst was able to resolve the Honeywell issue.
“As the buyer of Feltex we are extremely concerned about the disruption of the business and the risk of stand-downs,” Mr Walsh said in a statement.
Geelong-based group Godfrey Hirst bought the entire Feltex operation last week, with its sites in New Zealand and Australia.
Receivers McGrathNicol and Partners said the purchase price for Feltex was “sufficient to repay its existing bank facilities”, meaning the buyer covered the company’s debt of about $120 million.
Honeywell is the only unsecured creditor refusing to supply Feltex.
Before Honeywell’s refusal, Mr Walsh told Star he was pleased the “sale process had reached resolution”.
The fate of Feltex had been up in the air for more than a month.
“We can now provide clarity and certainty to the workforce,” Mr Walsh said last week.
“All Feltex employees in Australia will be offered jobs. About 85 per cent of the New Zealand workforce will be retained.”
He said the purchase price included a cash settlement in the order of $120 million, as well as the “assumption of various obligations around employee entitlements and warranties”.
Prior to Honeywell’s refusal to supply yarn, Michelle O’Neil secretary of the Textile Clothing Union of Australia, said workers had been relieved to see a buyer come along to save the business.
“They were concerned that their entitlement might be at risk when it went into receivership,” Ms O’Neil said.
She said the union is now discussing with Godfrey Hirst the details of how workers’ entitlements, terms and conditions will be retained.
An employee at the Tottenham factory, who has worked for 25 years at Feltex, said workers had felt “more positive”.
“But reading about Honeywll on a Monday morning was the last thing I needed,” she said.
“It’s earth shattering … I felt sick.
“I’ve heard of stand downs before but it’s never over until the fat lady sings.
“People need to know that is happening, we have mortgages and we have plans for next year, now that is all on hold.”
The employee, who did not want to be named, said the knots in her stomach relaxed when she heard last week that Godfrey Hirst had stepped up to buy Feltex.
“It’s been a very sad time for people, especially those who lost their jobs last year,” she said, referring to the closure of the yarn site at Braybrook.
About 200 people lost their jobs in connection to the yarn site closure.
Mr Walsh said the hand-over to Godfrey Hirst is anticipated around the end of October.
He said major changes to what was produced at the Feltex sites were unlikely.
“It will predominately be business as usual however inevitably there will be some changes and rationalisation to product mix and process.
“We expect there will be some changes but the individuality of the Feltex brand will be carefully maintained.”
