Tomato Producer, Steelmaker Axe More Jobs

More jobs in Australia continue to be axed as companies go into administration or shutter outlets. The latest jobs to be cut belong to employees of a tomato producer and steel manufacturer.

In what appears to be malady that has afflicted the Australian employment situation, the lay off contagion is spreading across the country threatening to reverse the small gain made in January when joblessness rate slightly dipped to 5.1 per cent from 5.2 per cent in December 2011.

SP Exports farms at Childers in southern Queensland reported on Tuesday that it went into voluntary administration on Friday after Australia's largest tomato producer racked up $12.5 million to creditors. Along with the appointment of Korda Mentha as administrator, SP Exports laid off 60 employees.

John Brent, chair of AusVeg, blamed the collapse of SP Exports to the difficult operating environment for fruit and vegetable growers amid rising cost of production and difficulty in dealing with supermarket giants.

Korda Mentha is the same administrator for collapsed aviation company, Air Australia.

Onesteel said on Tuesday that it will cut 1,000 jobs by end of June 2012, which is 145 higher than the steelmaker's previous announcement. The axing of jobs is the result of a first half loss of $574 million. By reducing its manpower, Onesteel is expected to save yearly $90 million.

The affected Onesteel workers would be from its manufacturing, distribution, recycling and corporate divisions at its Whyalla steelworks in South Australian. In the last six months, Onesteel had laid off 300 employees and 170 more contractual workers on top of 400 employees axed as part of a broad business review.

Onesteel explained the first half loss, which contrasted with a $116-million net profit compared to the same period a year earlier, to an impairment charges on its American and Australian businesses, a $130-million write down on the value of its LiteSteel Technologies businesses, sale of a unit and restructuring costs.

On the same day, more than 100 freight workers at the Port Kembia Coal Terminal in New South Wales were stood down by Pacific National Coal. The company said the freight workers would be considered on leave without pay because they could not unload their trains at the exporting facility due to the ongoing strike between the Construction, Forestry, Mining and Energy Union (CFMEU) and the Illawarra Coal Terminal.

The 108 affected workers comprise 67 per cent of the 161 freight workers at Lithgow and Port Kembia, where CFMEU members launched another 50 hours of protected industrial action on Wednesday.

Pacific National Coal, which is not involved in the labor row, said that because of the more than 300 hours of industrial action at the port since January, the company could not unload its coal trains and affected its ability to service customers and provide work for its employees.

On Tuesday also, Specialty Fashion Group announced it would close 15 stores by the middle of 2012 after the women's wear company logged a 64.1 per cent decline in first half net profit to $6.1 million.

Fortunately for the 30 workers of the 15 stores, they would not lose their jobs but be redeployed across 909 stores of the chain in Australia and New Zealand. The store is known for brands such as Katies, Millers, Crossroads, Autograph, City Chic and La Senza.

Gary Perlstein, managing director of Specialty Fashion Group, said 15 more outlets would likely be closed by the second half of the year as part of the retailer's long-term plan to close 120 stores over the next three years following disappointing results of sales.

Mr Perlstein disclosed that the firm will not pay an interim dividend as a result of a 4.5 per cent decline in foot traffic across its different outlets. He said that shoppers only purchased clothes that were heavily discounted since November 2011 which led to a disappointing Christmas trading period.

He also blamed the political battles in Canberra between Prime Minister Julia Gillard and Foreign Minister Kevin Rudd for the weak consumer confidence.

"A country where politicians are fighting about themselves and not looking after the country, as far as I'm concerned, is just ridiculous," The Sydney Morning Herald quoted Mr Perlstein.

"For our customers that makes them very anxious and gets them disheartened. You always say that the fish smells from the head down, if the country is not stable and they see (politicians) worrying about their own personal issue, I don't think that creates a lot of stability," he added.