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“Closing Plants is an Economic Terrorist Attack”
The Finance Committee held a hearing about the expected firing of hundreds of workers from plants in the north. The factory managers attacked the banks.
Finance Committee Chairman MK Rabbi Moshe Gafni said that the fact that the State is sitting on the side when plants choose to fire employees and move to import from China and other countries instead of producing in the country is not logical nor moral.
MK Tzion Fanian who sought to hold the hearing said the banks are cutting off the oxygen from the periphery. "Banks are the oxygen of the factories. I do not know one plant for which the banks don’t make trouble; the North is an unemployment-stricken region and we must not let this plant close and dismiss the thousand workers," he said. MK Shelly Yachimovich said that the closure of factories like this one is like an economic terrorist attack.
Jacob Gelbard, Chairman of the Board of Tefron, said that the plant's main problem stems from two reasons. One is administrative, since two CEOs have been replaced recently. The second problem is the lack of cash flow in the plant; the cash would enable the plant to maintain the business plan prepared for its recovery. "The banks have only a cold consideration, but without being able to commit to suppliers and to meet obligations, the plant will close," he said.
Representatives of the banks who attended the hearing said that the company has an issue with credit. Moshe Ingbir, head of special credit in Bank Leumi, said that "Tefron is bleeding all the time and the bleeding of the company is just at our expense."
In the hearing the topic of the Molitan factory, also involved in textiles, was raised. Molitan has about a hundred employees. CEO Nahum Mandel said that despite negotiations with Israel Discount Bank, the bank issued a unilateral decree of receivership (whereby a creditor can enforce security against a company's assets in an effort to obtain repayment of the secured debt). "I call on you to help us in that bank will freeze the receivership proceedings so that we can enter the system into recovery; we are not speaking about huge sums", he said.
Histadrut Chairman Ofer Eini said that there is no chance he will let a thousand people simultaneously lose their jobs in the periphery. "Again and again we encounter the problem of loan guarantees, the law was amended and accordingly workers put aside money for other workers in need. The money exists; it’s just the Treasury is not prepared to release it and it can’t be used. If it was in our hands we would help these enterprises. I call on everyone to lend a shoulder to help stop the collapse of the factory," he said.
Manufacturers Association President Shraga Brosh said that the funds meant to help these businesses are an illusion. "Seventy percent of applicants receive negative replies; most of the banks did not even go to the auction, which shows that the money was not accessible at all. We must change the rules and conditions so these funds which have a lot of money for factories can run in their benefit, thus saving many more plants in danger of collapse," he said.
To summarize the hearing Finance Committee Chairman MK Rabbi Moshe Gafni said that he calls on the Finance Ministry to intervene. "The Treasury doesn’t need to bring money, but at least sit down and see how it can help, to sit with the banks and the owners of the company to resolve the problem. I also call shareholders of Tefron who profited well when the company was profitable to take responsibility and help the plant out of the crisis.” Regarding Molitan, Gafni called on the bank to freeze the receivership process to enable the company to recover.