Despite the efforts of the Balearic government, Council of Majorca and Manacor town council, the management of the Majórica pearl factory has filed for permission to suspend payments because of its precarious financial situation. The request came from the administration board and the shareholders, who issued a communique saying that the measure, not wanted by anyone, was a result of its financial problems since November 2001, which mean it cannot meet its financial obligations. The company claims that since last year it has been concentrating its efforts on overcoming the slump in sales over the past two years. It drew up a strategic plan, which involved expanding capital by 300 million pesetas last June. But according to management, they were unable to withstand the effects of the September 11 terrorist attacks on the world economy. The company then tried to cut its workforce by 188, but met with stiff opposition from the workers, who claim the company's problems are caused by bad management. After negotiating, the unions accepted 88 early retirements and 55 dismissals. The Balearic government and the central ministry of labour poured in 3.8 million euros, but the rescue packet seems to have failed. Staff manager Antonio Barrionuevo said yesterday that workers would probably be paid half their February salary shortly, and the rest at an undetermined date. This came as a shock to the workers who had been led to believe they would receive the full month's pay this week. He asked the workers to be patient for another 24 hours, after which he would address another meeting. Workers at the factory and the shops expressed their concern at the new situation and the constant promises about their pay. Last week they were told that management was negotiating a loan with the banks, but this has fallen through, nor did shareholders agree to another increase in capital.
Financial problems lead pearl factory to suspend payments
The rescue package to save the factory has fallen through.