Closure of Fletcher Building's copper tubing factory in Penrith to cost 108 jobs
Date
September 25, 2014
The Abbott government's free trade deal with South Korea was the nail in the coffin for Fletcher Building's troubled copper tubing plant in Sydney's west, which will cease trading domestically by the end of the year with the loss of 108 jobs.
The trans-Tasman building materials group on Wednesday said it would cease making copper tubing in Australia and close the Crane Copper Tubing factory in Penrith.
"Our priority right now is to do the right thing by our people," Fletcher chief executive Mark Adamson said. "I realise this is a particularly difficult time for our employees and we are committed to ensuring any potential opportunities for redeployment within Fletcher Building are fully explored.
The former head of the Commonwealth Bank, Sir Ralph Norris, it to step into the chairman's role at Fletcher Building.
The former head of the Commonwealth Bank, Sir Ralph Norris, it to step into the chairman's role at Fletcher Building.
"Where that is not possible we will support our employees through the transition to alternative employment."
The factory has been unprofitable for years because of an oversupply of copper tubing for plumbing and competition from other materials, such as plastics, as well as competition from imports.
Fletcher knew the plant was loss-making when it acquired the facility in the $792 million takeover of pipes and trade store business Crane Group in 2011.
Copper prices have risen sharply in recent years, crimping demand for copper pipes in Australia.
The federal government's new free-trade deal with South Korea also cut the 5 per cent tariff on copper imports, opening the under-fire Crane plant to increased competition.
Australian Workers Union NSW state secretary Russ Collison was furious at the government, rather than the company.
"Once again another manufacturing business is closing in Australia," he said. "I'm sick to death of politicians sitting back and saying there's nothing they can do about it. Every other government has some support for some industries.
"Fletcher's, to be honest, they could have closed two years ago. I think they have done everything within their means."
Despite workers agreeing to forgo a pay rise in recent enterprise negotiations and sustained efforts to improve efficiency, losses were expected to rise.
The facility has been losing between $NZ2 million and $NZ3 million a year and losses were expected to expand to about $NZ5 million ($4.6 million).
"The decision to cease trading and close the Penrith factory has been made only after an exhaustive analysis of options to restore profitability," the company said in a statement.
Most of the 108 affected workers are based at the Penrith site.
Work has stopped this week and employees will return on Monday to finish the last batch of orders before the plant stops domestic trading on December 31. The company aims to end export trading within 18 months.
It is unlikely many of the 108 staff will be placed into new roles with Fletcher and most are likely to be made redundant.
Mr Collison said the average age of the plant's workers was 40.
"There's at least 20 years of working life in the majority of them," he said. "Where are they going to get another job in western Sydney? It's doom and gloom."
Fletcher is providing financial advice and an employee assistance program.
The company, which is listed in Australia and New Zealand, said it expected to book closure costs of up to $NZ19 million in the year ending June 30, 2015.
Read more: http://www.smh.com.au/business/closure-of-fletcher-buildings-copper-tubing-factory-in-penrith-to-cost-108-jobs-20140924-10lgwq.html#ixzz3EHSnndIq
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