Clive Palmer’s Mercedes giveaway, five years on

Five years ago, Clive Palmer handed over 55 Mercedes-Benz cars to his Townsville refinery workers in a $10m giveaway.

Pictured is a Mercedes car given to former Palmer employee Flormiza (Surname withheld) at Viveash, WA. Clive Palmer gave cars as part of a Christmas bonus five years ago during the mining boom.

It was the biggest Christmas party Townsville had seen.

Several hundred workers at the town’s Yabulu nickel refinery had just arrived at the company’s end-of-year knees-up when word began to spread that the business’s new owner, self-proclaimed billionaire Clive Palmer, was preparing to play Santa Claus on a grand scale.

Filipino-born engineer Flormirza Cabalteja was to be one of the lucky ones. “We arrived and someone told us that they were giving out a Mercedes, and then suddenly Clive is up on stage handing over the keys to someone,” she said of the 2010 bash. “And then he did it again and again … and then someone told me he had called out my name.”

All up, Palmer handed over 55 Mercedes-Benz cars to refinery workers in a $10 million giveaway complete with fireworks and drumrolls; 750 employees received ­Fijian holidays and weekends at the Sheraton Mirage.

Palmer had only recently bought Townsville’s Yabulu ­nickel refinery for a song, and it had turned more than $200m profit in its first year. Production was humming under a stiff nickel price and a progressive management that rewarded staff who suggested ideas, and the managers who followed them through.

Five years on, the Merc sits — a little dustier — in the Cabalteja driveway in eastern Perth, a distant trace of a spectacle that represented the high watermark for the East Coast commodities boom and Palmer’s ascendancy.

Cabalteja won’t get a bonus this year, but is happy to have sec­urity at her new job working for a mining contractor she joined after her partner took a role in Perth. But life for almost 800 former colleagues at the refinery in Townsville is tougher, as debts and cash flow issues at Queensland Nickel mount, and Mr Palmer is forced to bankroll wages and operating costs from his own pocket.

Townsville Mayor Jenny Hill said: “The reality is that at this stage, it’s month by month. We just don’t know what’s going on out there, and its hard on the community, hard on families.”

Rumours of an imminent closure announcement circulated at the refinery last week, on the same day Queensland Nickel managing director Clive Mensink, Palmer’s nephew, issued an internal communique advising employees Palmer would issue $2.4m of his funds to pay Christmas wages and keep the plant in operation. In the same week, records ­released in a sworn affidavit revealed losses at Queensland Nickel totalled more than $275.8m over four years. Mensink went on to tell workers the refinery was operating as usual and there were no updates. He was overseas and declined to comment when contacted on Thursday.

Meanwhile, workers and the broader Townsville community have been left scratching their heads and hoping for the best over the Christmas-New Year period.

Ray White real estate agency director Errol Munro said: “You know there’s going to be a ripple effect, you just don’t know when it will happen.”

Throughout town, homes continue to sell and apartments and rental accommodation are finding tenants with regularity, but the community lives on the same knife-edge the workers endure.

Australian Workers Union secretary Cowboy Stockham talks of skilled unemployment levels hovering as high as 10 per cent, and reports of low-paid government agency roles attracting as many as 400 applications for a ­single advertisement.

“It’s not just a refinery we’re talking about here, but an issue that affects a whole community — at the worst possible time of year,” he said. “They’re being used as political pawns, and it has to stop.”

Queensland Nickel employees have received their wages for ­December but have no guarantees about their position for the next month, union representatives say.

Despite the tumult, a sense of loyalty to the company and, in some cases, its eccentric owner is still evident throughout refinery ranks.

Of the dozens of workers The Weekend Australian contacted for comment, many were reluctant to speak out amid fears they would lose their jobs. Those who did speak were quick to point out they blamed the drop in commodity prices first, and Palmer second, for their situation.

One worker, who wanted to be known as Rob, said “People are pretty realistic and resilient up here … we know shit happens and we just deal with it when it does”.

There are still mixed feelings about the infamous Christmas bash of 2010. One employee given a holiday to Fiji said he and his partner had never been overseas before winning the trip, and it had likely saved their relationship. Another said “over the top doesn’t begin to describe” the 2010 Christmas giveaway; he wished Palmer had spent more time planning ahead than spending big in the good times.

Sources indicate Palmer ignored advice from his senior managers, who said giving 50 of the 700 employees a Mercedes would cause unrest in the company, and that many workers were left feeling bitter they had missed out while others had won big. By all reports, the bulk of the Mercedes were offloaded quickly after being received. Some workers indicate many people were embarrassed to drive the Mercedes and sold them, unable to afford the upkeep;­ ­others found the European hatches and coupes totally unsuitable for the rough roads around Townsville.

“It would’ve been a great ride in Brisbane, but that sort of car doesn’t work in a place in the bush like this,” one source said.

“If they’d given out a whole lot of LandCruisers, things would have been different.”

Former maintenance engineer Mitch Warrener sold his Mer­cedes within two hours of being awarded the hatch, netting about $40,000 in the sale.

“Sentiment was quite good when (Palmer) first took it over … he bought (the refinery) with a day to go, and saved everyone’s jobs. He was a hero,” Warrener said.

Former employees point to 2013 as a turning point for staff, and describe a swift drop in morale when a swag of long-time man­agers left the company, only to be replaced by staff from outside the resources industry with little understanding of the business, or technical familiarity with the work. A softening nickel price also weighed on attitudes and performance, as values freefell from a high just under $US30,000 a tonne to about $US15,000. Today, a tonne of the precious metal is trading for $US8640.

Cabalteja’s hand at the refinery was forced when her partner, who works in publishing, was retrenched in 2013 and took a job in Perth, but the uncertainty still ­affects her from across the country.

“I’ve still got a lot of friends in Townsville, and obviously they’re worried,” she says.

Far from the spectacle of 2010, earlier this month refinery workers celebrated the end of year in teams, over beers they had to buy for themselves at the local Bohle Barn tavern. Outside, dusty utes and the odd clapped-out sedan filled the car park. Not a single Mercedes in sight, no fireworks overhead, only uncertainty.

Additional reporting: Jessica Grewal, Sharri Markson, Paige Taylor