Hatzi Hinam saves Vita Pri Galil jobs and hires another 100 workers

Comverse plans to layoff 400 to 500 employees.

pri galil protest 248 88 (photo credit: Channel 2)
pri galil protest 248 88
(photo credit: Channel 2)
Employees at debt-ridden Vita Pri Galil on Wednesday sighed with relief after independent supermarket chain Hatzi Hinam committed to keeping the processed-food and -vegetables factory active and hold on to workers, while also recruiting an additional 100 employees as part of its NIS 105 million takeover. "We very much welcome the completion of the deal," said Ofer Eini, chairman of the Histadrut Labor Federation. "Much praise is due to the owners of Hatzi Hinam and the representatives of Bank Leumi and Israel Discount Bank, who went a good part of the way to reach an agreement which secures workers' rights and includes the recruitment of an additional 100 workers." Earlier in the day, Eini met with Bank Leumi chairman Eitan Raff and Israel Discount Bank chairman Shlomo Zohar, who both agreed to cover Vita Pri Galil's financial commitments, including employees' compensation and retirement packages. The agreement was forged after details of the purchase proposal by Hatzi Hinam was disclosed. Together with the owners of Hatzi Hinam and the bank's representatives, Eini secured a collective wage agreement for Vita Pri Galil workers on Wednesday evening. Under the terms of the agreement, Hatzi Hinam - the country's third largest retail chain - will continue to employ all Vita Pri Galil workers under current wage agreements and hire another 100 workers. The banks will allocate NIS 16.5m. for employees' compensation and retirement packages. Last week Vita Pri Galil employees launched industrial action after Bank Leumi and Israel Discount Bank, which are owed NIS 120m., asked the Haifa court to appoint a receiver for the company, threatening the jobs of hundreds of workers, many of whom have worked at the factory for decades and have no alternative for finding work. "There are more factories on the brink of collapse. This week I received calls from three factories on the verge of collapse employing 1,000 people," Eini told Army Radio. "There is a real employment crisis, and the Finance Ministry is continuing with its 'sit and wait' attitude, not wanting to spend a penny, while countries around the world are streaming money into the economy to stem the crisis. Being realistic, not all factories can be saved, but the government has a responsibility toward its working citizens, particularly for those employed in the periphery who have no work alternative." At the end of last week, the closure of the Of Haemek chicken company in Ramat Yishai, which employs 200 workers, was averted temporarily in a last-ditch effort by Eini to postpone the decision by a week or two. During this period, Of Haemek management is negotiating with bank representatives and the Finance Ministry with the aim of getting a state-guaranteed loan. The factories in the periphery are not the only ones falling victim to the global economic crisis. The crisis is continuing to take its toll across a variety of business sectors in the local economy, which are having to streamline operations and cut their workforces. The latest victim is global hi-tech company Comverse Technology, which is allegedly preparing for a third wave of layoffs in less than a year. Comverse has 4,500 employees worldwide, out of which 2,600 are in Israel. According to information obtained by The Jerusalem Post, Comverse could be cutting 15% - between 400 to 500 people - of its workforce, out of which a large chunk is feared to include workers in Israel. But exact numbers or other details about where the cuts are being made are still unknown. Managers at the company were ordered to finish annual evaluation interviews of all their workers by March 1. Meanwhile, the Textile and Fashion Industry Organization at the Israel Manufacturers' Association said Wednesday that as a result of the weakness of the US currency last year and the impact of the recession hitting the global economy in the fourth quarter of the same year, 1,600 workers were laid off during 2008, and another 1,950 are expected to lose their jobs this year. The textile and fashion industry employs 16,200 workers. "The textile and fashion industry is in a deep recession - one of the most difficult ones it has known since the founding of the State of Israel," said Remsi Gabbai, chairman of the Textile and Fashion Industry Organization and CEO of Office Textile, at a press conference in Tel Aviv. "Last year six factories were closed, including the Kiryat Gat Polgat factory with 300 workers." A survey conducted by the organization found that 10% of the businesses in the sector have switched to a four-day work week in an attempt to avert layoffs amid the crisis, while 64% said business was suffering from the credit squeeze. Gabbai called upon the new government to take a number of emergency steps to rescue the sector from collapse, particularly in the periphery. The steps applicable for this year include subsidizing part of salaries in factories in the periphery for a year; providing solutions to the credit crisis; and limiting government offices' textile purchases to local manufacturers - a move that would bring in NIS 400m. annually and could in turn lead to the recruitment of 3,000 new textile workers.