FORGACS is laying off 160 of its 450 Tomago workers and the rest of the jobs will be phased out by year’s end unless there’s a dramatic change in Commonwealth shipbuilding policy.
A Forgacs spokesperson confirmed on Tuesday that the workforce had been told of the cuts, which come as the company’s main contract – building hull modules for a naval destroyer contract – draws to a close.
The spokesperson said the company had called for voluntary redundancies but the end result would be 160 workers going during July.
The spokesperson said Forgacs had about 30 people at Carrington working on a landing craft for Tonga, and there was some work at its Hexham and Gladstone, Queensland, sites.
But the Air Warfare Destroyer hull modules that Forgacs was building for South Australia’s ASC would be shipped to Adelaide by the end of the year.
Fabrication work on the six final hull modules had finished, and the remaining 290 or so Tomago workers were engaged in fitting out the modules and blasting and painting them. The next big defence job on the Forgacs radar is a tender with French company Thales to supply and maintain 21 Pacific patrol boats.
One of Forgacs’ rivals for the patrol boats, Victorian builder BAE Systems, pulled out of the tender last week, saying the job was too far off to justify maintaining its workforce.
Though this would appear to help Forgacs, the Newcastle company is facing the same ‘‘Valley of Death’’, as the delay in contracts has become known.
Newcastle Trades Hall Council secretary Daniel Wallace said unions and shipbuilding firms had been warning about the ‘‘Valley of Death’’ since Labor was in power.
‘‘We’ve heard this work could end as soon as September and the company needs to be honest and open with its workers about what is happening in these final months,’’ Mr Wallace said.
‘‘You’ve got young blokes here who have got married, had young kids, put a deposit on a house, and now they are in this devastating position. They can’t switch over to train building or mining, because the jobs aren’t there.’’
Paterson MP Bob Baldwin said he sympathised with Forgacs because the quality of its work was not in question on the destroyer modules.
Mr Baldwin said the government had heard the industry’s pleas over the patrol boat contract and had ‘‘brought it forward as much as possible’’ with an ‘‘expedited’’ tender to finish in 2016.
‘‘This process ... has been considerably faster than historical standards and reflects the Coalition’s commitment to supporting Australia’s shipbuilding industry,’’ he said.
He said the blame for the job losses lay with Labor, which had ‘‘gutted’’ the defence budget during its six years in government.
‘‘The Coalition is releasing its plan for naval shipbuilding this year ... but even if we’d let a contract as soon as we gained office in 2013 it would have been too late to undo Labor’s mess.’’