Bowron layoffs tip of iceberg, says employers group

Expected redundancies at one of Christchurch's biggest employers, G L Bowron, are a "portent of things to come", says the Canterbury Employers Chamber of Commerce.

Workers at the Japanese-owned tannery that exports sheepskin products are expecting bad news on the jobs front at a series of meetings being held at the company today.

About 600 tannery staff have been told layoffs will be announced at the meetings, which are being held at different times to inform staff who work on various shifts.

Canterbury Employers Chamber of Commerce chief executive Peter Townsend told NZPA today the chamber had been "watching this coming down the track".

Bowron, like many exporters, had been hit by the strong New Zealand dollar.

"The thing that's surprised me is that some of these manufacturers have held on for as long as they have," Mr Townsend said.

He predicted more layoffs in the manufacturing and export sectors.

"There will be more coming. I think is a portent of things to come," he said.

Manufacturers were being hit twice by the strength of the currency.

Mr Townsend said not only were they unable to make a profit with their exports because of the exchange rate eliminating margins, but they were also competing in the domestic market against cheap imports driven by a strong dollar.

"So they get hit twice and it's a very, very difficult situation," he said.

Many manufacturers had "hung on there much longer than we would have anticipated".

However, it was "much more impoprtant" for companies like Bowron to "be pro-active about it" and avoid more significant consequences, Mr Townsend said.

With no control over the high value of the dollar, the country's productive sectors were the "unfortunate" victims of the equation.

"We've got to do everything else we can to ensure we've got an environment conducive to business success," Mr Townsend said.

It was "no coincidence" that business confidence had sunk to a 35-year low.

"My prediction would be that we're in for a pretty rough spin in the productive sectors of our economy over the next six months," he said.

Mr Townsend said the chamber would help Bowron as the company worked through its latest redundancies.

He doubted many of the Bowron workforce would have trouble finding other positions, with unemployment in Canterbury still a "relatively low" 3.7per cent.

"There are still opportunities out there," Mr Townsend said.

- NZPA