Cadbury’s decision to shed 80 jobs at its Hobart factory is disappointing but about making the company more efficient, Prime Minister Tony Abbott says.
The chocolate maker the decision is about keeping the doors open long term.
Cadbury is axing 20 per cent of its workforce at its Claremont plant.
“But the great thing about the Tasmanian economy right now is that there is … a lot more confidence,” Mr Abbott told reporters on Friday.
He said it was sad the company walked away from a grants deal that would have secured $16 million in federal funds for the Claremont factory.
The company says voluntary redundancies will make up the bulk of the cuts, which will involved a mix of salaried and contract workers.
Cadbury’s parent company Mondelez denied media reports a sales slump was to blame. It said the plant was not competitive on a global scale, and the job cuts were about trying to change that. “We need to improve the efficiency of the site,” a Mondelez spokesman told AAP, adding the company recently committed $20 million in capital expenditure.
Asked if the company was confident the factory would remain open, he said: “We’re confident we’re doing the right things to put us on a path towards sustainability.” The spokesman said the job cuts had nothing to do with the company having to walk away from a grants deal that would have secured $16 million in federal funds.
Cadbury would have had to stump up $50 million as a copayment but in March advised it could not meet that requirement.
“The withdrawal from that grant application has nothing to do with the announcement today,” the spokesman said.
The Australian Manufacturing Workers Union said the federal government must immediately say how the $16 million will be reallocated to support Tasmanian jobs.
“Tasmania already has one of the worst unemployment rates of any state in Australia. This will just add to the problem,” AMWU Tasmanian Secretary John Short said on Friday.
Independent Tasmanian MP Andrew Wilkie, whose electorate covers Claremont, said the cuts would be keenly felt in the Glenorchy City area, which already had one of the highest unemployment rates in the state.
He said there was an urgent need for federal stimulus spending in Glenorchy.
“The money must still be spent there,” he said.
The federal government has committed to spending the $16 million in Tasmania, but has not said where.
Opposition Leader Bill Shorten says the prime minister and his treasurer would “crawl over broken glass” to save their own jobs but weren’t lifting a hand to save manufacturing jobs.
“The government’s flipped and flopped on supporting Cadbury in Tasmania,” he told reporters in Melbourne.