Workers in Outlying Areas Facing Layoffs as Export Demand Drops

Workers in both north and south Israel are being informed that the companies they work for are millions of shekels in debt.

More than 500 manufacturing workers in remote parts of Israel may lose their jobs because of declining European demand, as a result of the economic crisis there.

The 400 employees of Phoenicia Glass Works in the Tziporit industrial zone near Kafr Kana, in the north, were informed a few days ago that the company has accrued NIS 320 million ($79 million) in debt. The 130 workers at Extra Plastic in the Negev town of Sderot also fear for their jobs, producing plastic bags and plastic strips, because of their company's debts - in this case, tens of millions of shekels to suppliers, banks and bondholders.

Not only blue-collar and other private-sector employees will be affected by the slump in exports: The public sector and nonprofit organizations will be too.

In Tiberias, 80 municipal workers have agreed to resign. The municipality is in debt to the tune of hundreds of millions of shekels. Over in Be'er Sheva, the charity that runs the Ashalim youth village for children at risk is itself at risk, after failing to drum up sufficient donations from abroad.

The smokestack of the Phoenicia glass factory is visible for miles. The factory opened its doors in Haifa Bay 78 years ago, and has fostered deep loyalty among its employees and neighbors. Some of the workers today say their parents and grandparents also worked in the factory. 

Take Haim Katri, the head of the Phoenicia workers union. His father worked at the plant as a carpenter, and his grandfather, a Syrian immigrant, worked as a porter at the plant, transporting the raw materials that Phoenicia fashions into bottles and jars in multiple shapes and colors.

"There are a lot of veteran workers," said Yitzhak Moyal, who heads the union representing Israel's construction, wood and glass workers. "Their chances of finding other work are really not good."

And it's not just the company veterans who are set to feel the pain, Moyal says.

"The younger workers also don't have an easy situation ahead of them. In today's job market, there are no vacancies, and certainly not in the periphery."

The only answer, for Moyal, is simple. "We have to save the factory," he says.

Over at Extra Plastic, meanwhile, at the behest of creditors, the court recently appointed a receiver to list and sell the company's assets.

"At the moment there's no problem with salaries for 130 workers, and everyone is getting their salaries on time," said Odelia Wagner, who directs the company's sales force. "The company is operating as normal in the meantime, but the workers are certainly concerned about the future."

The company's creditors will meet in the next few days to try to find a solution to its financial problems.

In the public sector, where dozens of municipal workers are bracing for pink slips, the outlook is equally grim.

The municipality has piled up debts totaling NIS 130 million. It has to adopt an economic recovery program to streamline operations, which generally means laying off staff.

In this case, around 80 workers can expect to be let go. They will be classified either as having resigned from their positions or taking early retirement.

Only a few will get a full pension of about 70 percent of their wages. Most are in their mid-50s.

Save haven closing down

At the Ashalim youth village, the fears have already been realized. After many years of providing a safe haven and resources for at-risk kids, the institution is being forced to close its doors.

Sixty-one of the workers have already been told not to come back to work. Last year the village helped 86 kids who desperately needed it.

"At a certain point, even the Social Affairs Ministry dramatically cut the number of children in the program," said Amiram Bogat, one of the institute's receivers.

"I worked there for 17 years, and suddenly they said it was just a budget issue," said one educator.

"This place has saved lives," he said, explaining that many of the kids helped by the village would have faced a dead end otherwise.