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SOMBA K'E/YELLOWKNIFE - Shut doors this week at Arslanian Cutting Works could be a death knell for another cutting and polishing plant on Diamond Row if the government doesn't step up, according to proponents of the industry.

Arslanian polisher Jen Pilon shows Premier Floyd Roland the plant's 100,000th cut and polished diamond in December, 2007. - photo courtesy of Bob Wilson

Arslanian, which employs about 50 Yellowknifers, became a hot topic Monday at the legislative assembly, when, during his member's statement, Kam Lake MLA Dave Ramsay urged government to step up, announcing Arslanian had temporarily closed and laid off five people.

"The industry we worked so hard to establish is being left to die on its own, and my belief is it is not too late. The GNWT must look at a way to be flexible and accommodating in these rough economic times," he said.

Bob Bies, director of operations at Arslanian's factory, confirmed five people had been laid off at the factory last week.

"We're closed down this week and it's really an evaluation time. We're coming up with a game plan, we don't want to shut down," he said.

"We are closed for this week, but this week only. We're planning on opening up this Monday," he added.

Montreal-based owner Ron Basal told a different story of the closure, however. Bies said Basal is one of several Arslanian owners; he himself reports to one based in New York.

Basal also confirmed the plant's one-week closure, but said the shut-down was to install new-and-improved machinery and technology.

"They have to install (the machinery) and they have to train people. So we just have a few days off until everything is set," he said.

Basal added to his knowledge there hadn't been any layoffs at the plant, but said Arslanian is considering a slim-down of its work force.

"I think we're going to do a bit of cut downs also in the factory - again, we're introducing more technology - but nothing massive," he said.

Basal would not say how many jobs could potentially be cut in the future.

"It's tough to get good employment in Yellowknife in the diamond industry. For us it's a catch-22, right? We can't fire them because we can't replace them," Basal said.

"We are doing serious thought on how we can keep all the employment and still not get hurt by this economy meltdown," he added.

Times are grim, Bies agreed.

"We're struggling to survive and we're still hopeful we can make a go of it ... it is really extraordinary times for the diamond industry. We'll probably never see this again in our lifetime," he said.

Bies and Basal both agreed with Ramsay that the government needs to help stem the pain.

All three would like to see the government make its policies more flexible. For Bies that means allowing cutting and polishing plants to sell diamond rough they don't have the capacity to process.

"Right now you must manufacture 100 per cent of your allocation in the NWT, however we're competing in a tough industry and every other manufacturer has the option of trading some of its rough to be able to manage its inventory better. But we can't do that," he explained.

"We're saying listen we don't want to reduce jobs, we just want you to be a little more flexible so we can be more competitive nationally," he added.

Ideally, Bies said, Arslanian would be able to sell its extra rough - stuff sitting in inventory that the factory can't sell - to another company that may have a shortage.

Ramsay said he has secured a promise from the government to sit down with Arslanian and find the best way to protect the remaining jobs in the industry and the industry itself.

"It's important those discussions take place right away. Like I said in the house, I don't think we have much time," Ramsay said in an interview following Monday's legislative assembly session.

"The bottom line is the government has to pay attention to this. We lost Laurelton. There was 40 jobs there," he added.

Laurelton laid off 25 employees late January and will officially close its doors Thursday.