Gisborne Mayor Meng Foon says he's hopeful 100 wood mill workers will be able to find replacement work at two soon-to-be-established wood processing businesses in the region.
Wood processing plant JNL has proposed mothballing its LVL (plywood) production in Gisborne with a loss of 97 jobs from its 205-strong workforce, First Union have said.
"If implemented this is going to be devastating for the affected workers and the community," says union president Robert Reid.
"Lots of families have multiple members who work at the mill - for others, although wages aren't great, it's the difference between being in poverty or not."
Speaking to The AM Show on Thursday morning, Mr Foon said the Gisborne District Council is in talks with Forestry Minister Shane Jones about what's likely to happen to the workers.
"These people are going through a restructuring at the moment, and obviously a consultation process," he said.
"Right here in Gisborne we have got two imminent wood processing businesses that are going to start up in the next few months - that's good news for those people if they're going to be made redundant.
"We're in talks with Shane [Jones]. There is a keen commitment from the Government."
The proposal comes as JNL has invested in a move from unpruned logs suited to plywood to a greater proportion of pruned logs suited to higher value clearwood products.
General Manager of JNL Dave Hilliard says they are refocusing on producing high-quality solid wood products.
"This investment will likely initially be in log handling and sawmilling, but could expand to include production processes that use the sawmilled lumber products."
He said if the decision is made to go ahead with the changes in Gisborne the mill would stop producing plywood and LVL products - and around 100 full time positions would remain at the mill.
Meanwhile, the union said the announcement is a blow to the newly-elected Government's forestry, regional development and employment strategy.
"JNL is the only significant wood processor left in Gisborne and its downsizing is a market failure," Mr Reid said.
"The Government needs to intervene to address the market failure and promote a sustainable social and economic plan for the region's forestry industry."
A final decision on the proposal will be announced to staff on February 12.
Newshub. / NZN