This is a surprising turn of events for The Hobbit. When a small coalition of actors’ unions in New Zealand and Australia pushed actors’ guilds across the world to boycott work on the films, citing an unfair residuals arrangement, Peter Jackson responded by threatening to move the production to Eastern Europe.

But that would never happen, right? The organizations wouldn’t push away a huge chunk of work like the two Hobbit films by holding firm to a set of demands for which the production and backers at Warner Bros. have sought appropriate solutions — that would be crazy.

And yet Peter Jackson and Fran Walsh are now saying that Warner Bros. will move the films out of New Zealand to a yet to be disclosed new shooting location. So is this a done deal, or just an escalated threat by the studio?

The Press of New Zealand has a collective quote from Jackson and Walsh, who say “The damage inflicted on our film industry by [the actors unions] is long since done,” and resolution of the union issue now “does nothing to help the film stay in New Zealand.”

The pair says that Warner Bros.’ faith in the New Zealand industry has been undermined, and that the studio is concerned about spending $500m there. “Next week Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available.”

The sad thing is that the instigating group, the New Zealand Actors’ Equity, is controlled by an Australian organization, and this is being seen by many as a play by the Australian group to take a controlling interest in the NZ film industry. And the NZAE represents only a small percentage of actors in the country to begin with — 10 – 20% — so this isn’t seen as representative of an industry-wide push.

Over a thousand film workers, led by WETA’s Richard Taylor, turned out yesterday to picket a planned meeting of the actors’ organziations, at which negotiation priorities were to be discussed. But the meeting was canceled thanks to the throngs of crewmembers, with Council of Trade Unions president Helen Kelly saying the atmosphere was “too dangerous” because the crowd was “in a lynch-mob mood thanks to Richard Taylor, who has obviously wound them up like springs.” Funny how over a thousand people worried about losing a couple years of work — and more if the industry really takes a hit thanks to this action — might be wound up.

So, the question: will Warner Bros. go through with the move, or is this a last strong-arm attempt to get the unions to accept the measures the studio already has in place? The organizations are in a hard place now, as backing down would undermine their already tenuous position, but letting the movies go to another country would be a huge loss for the industry.

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