In just four days, four different companies, two of which are clothes manufacturers, have announced that they will be laying off a number of employees, which in total amount to 706 people, the General Workers’ Union (GWU) said yesterday.

The news that the fourth company, Bortex Group, a producer of tailored garments and exporter since 1964, will be laying off almost half its employees, was made public yesterday morning when Investment, Industry and Information Technology Minister Austin Gatt made reference to two companies that announced this week that they will have to lay off a big number of employees.

Dr Gatt was speaking during a visit to the Malta College of Science, Arts and Technology’s (MCAST) Aviation Maritime Training Centre, where he met students who are following courses in aviation engineering (see story on page 4).

On Tuesday, VF Malta, the jeanswear manufacturing company, announced that it will close down by the end of August and that all of its 570 employees will be laid off.

Towards the end of Minister Gatt’s media conference at MCAST yesterday, it was immediately known that Bortex was the second company that will be dismissing a big number of employees.

The other two companies are Pack Print Limited and Plastic Processing. Pack Print is to discharge eight employees, while the second company will sack about 15 workers.

Dr Gatt said that while it was saddening that companies are having to take such decisions, this was due to expansion in other manufacturing sectors. Maltese personnel were being trained to provide quality services in a number of high-end manufacturing sectors, he said.

In a statement issued yesterday, Bortex Group said that it has “reluctantly” advised the GWU, which represents the group’s employees, that it was constrained to decide to wind up its remaining production in Malta by mid-September. As a result, 113 employees will be made redundant.

The group will continue to use Malta as its operating base, employing 129 people in the departments covering design, product development, marketing, sales and administration functions with regard to all of its clients. The work that will be carried out in Malta will account for about 20 per cent of the group’s total sales, 97 per cent of which take place in international markets.

A source told The Malta Independent that it became known in mid-April that the company’s production department would probably close down, when the company is said to have lost an important client.

GWU and Bortex reached an agreement whereby employees who serve out their notice will receive an ex gratia payment of one week’s pay for every year of service with the group. The employees will also receive a payment from the Employees’ Fund that had been set up a number of years ago, following an agreement between GWU and the group.

Bortex said that in recent years, it has had to respond to ongoing loss of competitiveness due to cheaper production costs in other countries. Subsequently, client prices had to be reduced at a steady rate by means of a repositioning programme.

This began in 1999 with the setting up of a subsidiary in Tunisia to produce part of the orders secured by the company. Price competitive pressure persisted. Bortex responded by finding and making use of partners in China to produce more of its orders.

Production in Malta between November 2005 and October last year reduced gradually from 450 pieces to 200 per day. All along, the premise was that the group would tolerate a zero gross contribution from production in Malta, but would review the situation should the gross contribution become negative.

As from early 2006, the gross contribution began turning negative at various levels of output, running up to – Lm138,245 all year round. The situation deteriorated further, reaching about – Lm165,000 for the period November 2006-May 2007. The trend was expected to prevail in June, Bortex said.

The continuing and escalating gross contribution placed the group’s overall survival in jeopardy. It was therefore constrained to reposition further by discontinuing the remaining production line in Malta.

Bortex Group now plans to operate by targeting total sales with a value of about EUR 35 million annually and its 129 employees will have relatively high wages, representing the value added element in the group.

GWU issued two statements following the announcement made by Bortex Group yesterday. It expressed its concern over the situation regarding people that are being made redundant.

GWU secretary general Tony Zarb said it was a very traumatic experience for employees that were being laid off.

Expressing solidarity with the workers, Mr Zarb said there were couples that were being made redundant and these were losing their sources of income.

“Minister Gatt is sending ETC personnel to tell these people what they should do. Is this the type of solidarity that the government wants to offer to these workers?” Mr Zarb asked.

Meanwhile, in a statement, the Education, Youth and Employment Ministry said that in view of this week’s redundancies in the textile industry, the Employment and Training Corporation (ETC) has once again mobilised a comprehensive package of services to employees of VF Corporation and Bortex Group.

With immediate effect, ETC will be conducting a profiling exercise among these employees, by means of which their skills and career preferences will be established.

In parallel, during their notice period, should they wish, employees will be advised of job vacancies on a daily basis.

Employees may also opt to join any of ETC’s current training programmes or, if a suitable number of these employees express interest in a course that is not currently offered, ETC will endeavour to provide it.

A number of employers have already shown an active interest in recruiting these redundant workers. Those interested may contact ETC’s Vacancy Profile Unit on [email protected] and efforts will be made to effect the best possible matching in the shortest possible time.

In the meantime, earlier this week, ETC contacted the unit in the European Commission that is responsible for the European Globalisation Adjustment Fund (EGF), to determine whether Malta would be eligible in this instance to apply under this fund.

The EGF was established at the end of last year to fund individual support for workers made redundant due to globalisation. The fund focuses on tailor-made activities designed to help workers regain their place in the labour market as fast as possible.

In a separate statement that was also issued yesterday, the Investment, Industry and IT Ministry expressed its solidarity with the Bortex workers who got to know that they will be made redundant.

The government will be mobilising all its local resources, but it will also be applying for additional funding from the EU. These will be used for the training of workers, so that it will be easier for them to find another job.

There is no doubt that these are difficult moments for the concerned employees and their families, but the government is confident that alternative jobs will be found by means of ETC’s active assistance.