600 employees of Hadera Paper Ltd. (TASE: AIP; Pink Sheets: HAIPF), a subsidiary of IDB Holding Corp. Ltd. (TASE:IDBH), controlled by chairman Nochi Dankner, closed the factory gates today and launched a strike, three weeks after declaring a labor dispute. The employees are protesting a series of unilateral pay cuts by management, due to the company's losses in the first quarter.
Hadera Paper workers committee chairman Adi Hananov told "Globes", "We had no choice but to strike."
Hadera Paper said in response, "400 of the company's 3,200 employees illegally blocked the entrance to the factory. Problems with the natural gas supply have necessitated cutbacks, which began with pay cuts to the CEO and executives and the laying off of temporary workers. The 400 striking employees were asked to forego a 2.5% salary increase (not a pay cut) but they refused."
Hadera Paper posted a net loss of NIS 1.6 million for the first quarter, compared with a net profit of NIS 41 million for the corresponding quarter of 2011. Two weeks ago, in a notice to the TASE, the company said that it had decided to fire 120 of its 3,200 employees, more than half of them from the company's main premises at Hadera. Some of the fired employees were temporary workers. All of the fired employees had personal contracts, and the company's management was not required to conduct negotiations with the workers committee regarding the lay-offs.
In that announcement, Hadera Paper estimated that the layoffs would save NIS 20 million a year, and that it did not expect to report a provision for them in its financial report.
Hadera Paper is a subsidiary of IDB holding company Clal Industries and Investments Ltd. (TASE: CII), which is due to be sold shortly to Len Blavatnik's Access Industries Inc. of the US.
Hadera Paper's share price fell 1.7% by mid-afternoon to NIS 137.60, giving a market cap of NIS 700 million.
Published by Globes [online], Israel business news - www.globes-online.com - on June 4, 2012
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