Hadera Paper fires 120 employees

The company is laying off 120 of its 3,200 workforce, nine days after reporting that it had swung to a loss.

Hadera Paper Ltd. (TASE: AIP; Pink Sheets: HAIPF) today notified the TASE that it is firing 120 employees out of its 3,200 workforce, nine days after the company reported a net loss of NIS 1.6 million for the first quarter of 2012, compared with a net profit of NIS 41 million for the corresponding quarter.

Sources inform ''Globes'' that more than half of the layoffs will be made at Hadera Paper's main plant, where its headquarters is located. Some of the layoffs include temporary employees on production lines, and others include headquarters staff and administrators. All the fired employees are employed through personal contracts, which means that management does not need to negotiation with the union, which already declared a labor dispute at the company last week, in response to alleged unilateral cutbacks by management in breach of collective agreements.

Hadera Paper is a subsidiary of Nochi Dankner-controlled IDB Holding Corp. Ltd. (TASE:IDBH) through its holding company Clal Industries and Investments Ltd. (TASE: CII), which he has just sold to Len Blavatnik's Access Industries Inc. of the US.

Hadera Paper's workers committee chairman Adi Hananov reminded "Globes" about the sale of Clal Industries, and noted that the company was in the midst of a labor dispute. "Does he know the situation in this plant? Does he know that at the end of the month, we're planning labor sanctions, possibly followed by a strike? Does he know that we plan to submit 400 personal claims for the unilateral pay cuts? He better know about all of this."

Hananov said that just six months ago, the workers committee agreed to early retirement for 70 employees, 20% of Hadera Paper's unionized workforce. He said that there is no reason for more cutbacks.

Hadera Paper's swing to a loss was due to a 66% rise in production costs, in part due to the increased use of more expensive diesel for heating instead of natural gas because of reduced deliveries from Yam Tethys.

Hadera Paper's share price rose 0.2% today to NIS 149.20, giving a market cap of NIS 758 million.

Published by Globes [online], Israel business news - www.globes-online.com - on May 23, 2012

© Copyright of Globes Publisher Itonut (1983) Ltd. 2012

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