Wellington, New Zealand, June 28, 2006--Carpet producer Feltex's shares have plummeted to 25c, but its workers couldn't be happier, Manawatu union organiser Dion Martin says, according to a report from Stuff.co.nz.
This week, all 1000 workers across the country will receive up to a 5-per cent rise in their pay packets backdated to April 1.
"We think that if you can't at least give your workers a 5-per cent increase to meet rises in cost of living, then you don't deserve to be in business. Workers are very happy."
But a local business expert says employees should be very concerned.
Martin, who is with the National Distribution Union (NDU), had a meeting with Feltex in Dannevirke yesterday. The meeting was scheduled as part of six meetings per year with management.
"I'm not being a Pollyanna here, and normally I'm a negative person, but Feltex management (in Manawatu) have been really upfront with their workers. Workers are happy--they have plenty of forward orders."
The share price for the company have plummeted from $1.70 since the company was floated on the stock exchange in 2004.
AdvertisementAdvertisementManawatu Standard sharemarket analyst Mike Hall said Feltex shares aren't worth the paper they're written on.
"If I was an employee, I would be quite unsettled. I wouldn't be buying shares now."
He is disappointed Feltex wasn't upfront about its financial position.
"Three weeks after a statement issued to say things are looking up, they're now in debt to the bank over $120 million. (The number of shares floated) multiplied by 25c equals $37 million in net revenue - they owe nearly four times that to the bank. Things are in jeopardy."
Finances aside, ultimately workers are still required to produce carpets, Mr Hall said.
Feltex spokesman John Walsh said redundancies are not an option for the company.
Feltex workers at plants in Feilding, Foxton, Dannevirke and Kakariki number 450 and are considered core to the business, Walsh said.
Feltex is one of the main employers in Foxton.
Foxton retiree and ex-Feltex worker Charlie Pearce said any redundancies would "knock back the town".
"This is a textile town. I don't believe they will go out of business. They just need some judicious management. It's had its ups and downs but it's always come through.
"We have a good product. Kakariki and Dannevirke have always been able to hold their ends up through thick and thin."
Foxton historian Gordon Burr, however, believes the town can absorb any job losses.
"Foxton would survive any redundancies. We have a few other employers to keep the place going. Foxton's never been a big place and I'd like it to stay that way. The likes of Auckland and Wellington leave me cold."
