UPDATED: Scott Technology cuts 13 jobs after 'busy' 2014 – CEO

UPDATED: Scott Technology [NZX: SCT] has confirmed it laid off 13 workers as the industrial automation firm looks to cut staff numbers at its Christchurch plant after taking on extra employees during a bumper year, chief executive Chris Hopkins says. 

The Dunedin-based firm last week told workers their positions were redundant at the Christchurch plant, according to a statement from the Engineering, Printing & Manufacturing Union. Mr Hopkins confirmed the statement, saying the appliance-focused plant's staffing gradually increased through a "busy" 2014, and had now been reduced to about 70 workers. About 60% of staff at the plant are represented by the EPMU, he said. 

"It's a bit more dramatic than the reality, that's for sure," Mr Hopkins told BusinessDesk. "It's just in response to the decline in our forecast production in our Christchurch plant. We manufacture in four countries around the world, and we've got six manufacturing sites in New Zealand. 

"We had a busy 2014 and we took on permanent staff to meet that increase in demand, and this is just returning staff levels to similar levels that we were in 2012, 2013." 

Last October, Scott Technology said its manufacturing businesses were coming under pressure from the strong New Zealand dollar, which eroded export earnings. Mr Hopkins said the redundancies were related to less demand at the Christchurch plant, not shrinking margins. 

"We have allocated and reallocated some work up to Christchurch," Hopkins said, to make up for the forecast downturn in appliance manufacturing which the Christchurch plant makes. "We've been discussing this with the union for months so it's certainly not a shock to it." 

Ross Heslop, EPMU organiser for the Scott Technology staff, said they sought to hold off the redundancies until the manufacturer knew whether it would be successful in winning several contracts up for tender but were rebuffed. 

"They've indicated they want to move away from the employee model and begin relying more on temp workers to fill orders," Heslop said. 

Last October Parliament passed legislation in an effort to increase labour market flexibility and cut the regulatory burden and compliance costs for small- and medium-sized businesses. Chief among the changes are new working arrangements where employees can request work hours that suit them, the ability to negotiate rest breaks to meet workflows, provisions to protect vulnerable workers, a faster turnaround for Employment Relations Authority decisions, and a series of changes to collective bargaining to reduce ineffective negotiations. 

Scott Technology acquired three businesses over an 18-month period, and has flagged it will need to raise new capital to reduce borrowings. Those acquisitions helped drive a 40% gain in first-half profit to $1.1 million on a 16% lift in sales to $29.3 million. 

Scott Technology shares were unchanged at $1.37 and have dropped 10% this year. 

(BusinessDesk)