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Vic's aircraft maintenance industry suffers another blow
27/07/2012 - Victoria's aircraft maintenance industry has suffered another blow, with 164 jobs to go with the closure of a company co-owned by Qantas. Charisse Ede
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LTQ Engineering, an aircraft engine overhaul company based in Tullamarine, will close in September after reporting a string of losses.
The company, a joint venture of Lufthansa Technik and Qantas Airways Limited formed in 2008, blamed a decline in demand for engine overhaul services for the closure.
The closure follows Qantas's announcement in May that 500 jobs would go as the result of the consolidation of its heavy maintenance operations, including more than 400 positions at Tullamarine.
Qantas said the closure of LTQ was "regrettable but inevitable" following its sustained financial losses.
Qantas Domestic chief executive Lyell Strambi said the board of LTQ Engineering decided at a meeting on Thursday to close the maintenance facility after Lufthansa Technik advised it could not continue to invest in the joint venture.
He said reduced maintenance requirements for newer engines meant there was less work for the company, and with the high Australian dollar it could not be competitive with global maintenance facilities.
Australian Workers Union Victorian secretary Cesar Melhem said Qantas had taken the "lazy way out" by blaming the closure on its joint-venture partner.
He said Qantas could have cut a small number of jobs and kept operating.
"Qantas could keep the place going in their own right because they've still got a lot of engines that need to be repaired and refurbished," he said.
He said LTQ Engineering was the last major aircraft engine facility in Australia, and he feared the work would ultimately end up in China.
But Strambi said Lufthansa Technik would continue to manage the contract for maintaining Qantas engines, and most of the work now done at Tullamarine would be done in Germany.
LTQ said the joint-venture companies had made a significant investment in the business, but it had made consistent losses in each year of operation.
LTQ Engineering chief executive Marek Wernicke said the company would fulfil its contractual obligations to suppliers before winding down in September and would provide support to the 164 affected employees.
"By taking this decision now while the company remains solvent ensures that all employees have the certainty of knowing they will receive their full entitlements," he said.
Federal Employment Minister Bill Shorten said the government would "leave no stone unturned working with unions to encourage the company to ensure these jobs and skills remain in Australia".
Acting Victorian opposition leader James Merlino said the average age of LTQ Engineering workers was 44 and the majority had young families and large mortgages.
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