FORMER Bruck Textiles Technologies management has reaffirmed the tough decision to end the company was the right thing to do as 123 former employees return to work today.
Chief executive officer Geoff Parker said the situation could have been worse for the Wangaratta community despite 60 ex-Bruck workers relying on the federal government to cover a combined $3.8 million shortfall in entitlements.
In the lead-up to the July 11 announcement, Bruck had lost the support of its bank, major shareholder Philip Bart was propping the company up with his own funds including $5 million in the past six months.
Liabilities of $20 million have been transferred to the new entity, Australian Textile Mills.
“With the demise of the local automotive industry and the offshoring of key government contracts, it was not a sustainable business and was incurring ongoing, significant losses,” Mr Parker said.
“Under this strain, in the past six months alone significant funds were invested by the shareholder to fund day-to-day activities, which was simply not sustainable.”
Based on financial and legal advice, the Bruck board decided against liquidating the whole of Bruck Textile Technologies, which would have affected 190 jobs at Bruck alone and a further 93 roles in directly associated group businesses, Wilsons and Australian Weaving.
“The other option was to sell the business of Bruck Textile Technologies to Australian Textile Mills, thereby maintaining more than two thirds of employment levels,” Mr Parker said.
“Australian Textile Mills will have a different scale, strategy, focus and business model.
“The Bruck Textile Technologies board was confident that this option was in the best interests of the creditors and broader employee group as a whole.
“With this option, creditors will be paid, more than 120 employees were able to transfer to this new company, and Australian Textile Mills will also take on consideration of liabilities of approximately $20 million.
“The directors of Australian Textile Mills are confident they have made the correct decision.
“The only other option would have been far more devastating to the local Wangaratta community, creditors and employees with the loss of 300 predominantly Victorian jobs.”
Former Bruck employees will also have access to an interest-free soft loan facility, which will be managed by the human resources team at Australian Textile Mills.