Staff at Stawell's Motorway Tyres factory were left stunned last Friday after the company's owners announced they would be closing the doors.
Several staff members had been advised to take leave prior to the bombshell being dropped late Thursday. Staff who could not be contacted about the closure had letters hand delivered to their homes via a taxi on Friday.
The decision by the owners to close down the tyre remoulding business directly affects 34 staff in Stawell, along with eight in Melbourne.
Concerns have since been raised about whether or not the staff would receive their entitlements and as a result, several meetings have already been held.
A meeting involving many of the staff took place on Saturday afternoon, where a decision was made to approach the Northern Grampians Shire Council, along with Federal Member for Ballarat Catherine King and Member for Ripon Joe Helper, to ensure the entitlements are honoured by the company.
In a statement released on Saturday, the company cited difficult trading conditions for the closure.
The company advised that joint administrators Gideon Rathner and David Coyne had been appointed in order to facilitate the closure and to ensure that asset sales are conducted in an orderly manner.
Motorway Director, Jason Bresnehen said the business had experienced difficult trading conditions over the past several years, primarily due to growing and sustained competition from low priced imported tyres.
Mr Bresnehen said there had also been significant price increases of rubber and increased distribution costs as a result of fuel price rises.
``Over the past three years, management has injected several million dollars into the business, to improve efficiencies in the production and distribution of remoulded tyres and truck treads. During this time there were also significant efforts made by staff to improve the efficiency of the business,'' he said.
``Despite the efforts of management and staff the tyre remoulding business is simply not cost-competitive.''
Mr Bresnehen said these trading conditions had impacted upon other Australian tyre businesses and used the example of Goodyear recently announcing the closure of the Somerton based, South Pacific Tyres factory which employs 600 workers.
``Over the past six months, management has explored a number of ways to keep the business running as a going concern. Unfortunately these options have not been successful,'' he said.
``It is a sad and difficult decision to close the plant. Since 2005 we have made significant investment to strengthen the business but events beyond our control have created a cost-price squeeze.
``I would like to express my concern for the company's dedicated employees who have worked so hard over many years to ensure the businesses success. Despite the difficult trading conditions, the company has high quality assets and as such, we believe that the Administrator will be able to satisfactorily meet all employee entitlements.
``We informed our employees Friday of the company's decision to appoint an Administrator. I am concerned for the wellbeing of our employees and their families who are affected most by this announcement. We also recognise the economic and social impact upon the town of Stawell and the surrounding region.''
Motorway Tyres was founded at Stawell in 1932. Over the past 70 years the business developed to become a leading Australian manufacturer and distributor of rubber tyre products to the taxi, passenger and truck market.
Email a friend