"We have to cut down a lot of the clutter of anything, clutter of the work, focus product innovation, detail, all that is going on in the business but [we] just need to remove so much of the distraction to enable us to do that well".
This is how Pacific Brands CEO Sue Morphett, who pays herself $1.8 million a year, defended the decision to sack 1850 workers and move operations offshore to Asia to ABC's Lateline Business on February 25.
Taking out the fat
"We have to take fat out of the business", she said. The employees, some of who have spent decades working at Pacific Brands, are part of this so-called fat.
Pacific Brands has government contracts to make firefighters' uniforms and uniforms for the Australian Army, but also owns iconic Australian brands such as Bonds, Berley, Hard Yakka, KingGee and others. Already 75% of Pacific Brands production is carried out overseas.
Pacific Brands received $17 million in government subsidies over the last two financial years.
Morphett confirmed onLateline Business that it was not the global economic crisis or pressure from banks that forced the company to move offshore. The sackings were "something we've been working on for a year", she admitted.
There has been an outpouring of public support for the mainly migrant women workers affected, with blockades and possible product boycotts by unions announced.
The Maritime Workers Union, the Rail Tram and Bus Union and the Transport Workers Union of Australia have said their members will not move any machinery from Pacific Brands to an overseas destination by rail, road or ship.
Pacific Brands workers and supporters protested the mass retrenchments in Victoria, NSW and Queensland on March 5 and 6.
Market fails workers
Michelle O'Neil, national secretary of the Textile Clothing and Footwear Union of Australia, told Green Left Weekly that the workers first found out about job losses through Pacific Brands's statement to the Australian Stock Exchange.
The news of the retrenchments is devastating and the closing of seven factories will have a big flow-on effect. Expected job losses in associated industries may be as high as 3000, O'Neil warned.
The textile, clothing and footwear industry has registered a severe decline in the last 30 years. Victoria alone had 64,000 clothing workers in 1970. The February 26 Age reported that this had declined to 7051 jobs in 2006.
Chris Spindler, organiser with the Australian Manufacturing Workers Union, agreed with O'Neil that the government needs to take serious action.
"Quite a few of the divisions and labels that are being closed down are still profitable, but Pacific Brands wants to boost its profits by going offshore and taking advantage of Chinese wages that are as low as $57 a week", he told GLW.
"Industry bosses are suggesting the only way they could continue to manufacture clothing in Australia is if factory workers could be converted to outworkers, slaving away at home for wages comparable to Third World countries."
Spindler also said that most retrenched textile workers find it very difficult to secure employment again. "Research has shown that, of the clothing workers sacked during the 1991-92 recession, one third never work again, another third only get more precarious casual jobs with lower pay, and only one third get jobs with similar levels of pay to their old work."
According to O'Neil, the notion that businesses only have a responsibility to shareholders and not to workers is dead wrong.
She also rejected the notion that it solely up to Pacific Brands to decide on job losses. She called on the federal government to act decisively to stop the job drain, especially given the millions of dollars of taxpayers' money the company has received in subsidies.
Nationalise Pacific Brands!
There are no significant sections of the union movement calling for the government to place Pacific Brands under public ownership. But this call needs to be raised now.
Currently, the Rudd government pretends that it has no responsibility to step in and save jobs. It throws its hands up in the air and treats the sackings as though it is some kind of natural disaster.
In truth, the government is placing the right of business to make giant profits ahead of the right of workers to earn a living.
The government could move to nationalise Pacific Brands if it had the political will. This is the only way the jobs could be saved.
If the government won't act to save jobs, then the union movement must build a campaign strong enough to give the government no choice but to act.
In the context of the economic crisis, other companies will be looking at the Pacific Brands issue with great interest. If Pacific Brands can get away with mass sackings then other bosses will be emboldened to try it on themselves.
At stake is who will be made to pay for the economic crisis. Workers? Or the big businesses whose insatiable greed has helped wreck the economy in the first place?
The Socialist Alliance has circulated a petition calling for the nationalisation of the company without compensation to large shareholders. The petition has received strong support from the workers at demonstrations.
The petition calls for the company to be restructured to meet all government clothing needs so that not one job is lost. Copies of the petition are available from the Socialist Alliance national office. Phone (02) 9690 2508 or email