Pilkington Automotive plant may close

Pilkington Automotive plant may close

After a number of years of difficult trading conditions, Pilkington Automotive, a division of Pilkington (New Zealand) Ltd, has announced a proposal to close its Taita automotive glass plant in September this year.

Employees were told of the closure proposal today and consultation has begun with unions over the proposal and alternatives.

The division exports over 90 per cent of its output and is therefore very susceptible to international price and demand fluctuations and changes in the exchange rate.

Pilkington Automotive General Manager Timo Rautarinta said “over the past few years employees and management have worked hard to improve the productivity of the plant and improve its international competitiveness. This has included significant productivity improvements along with positive attitudes and contributions by employees.”

“These moves have substantially improved performance, but unfortunately the plant has struggled to remain profitable and is now losing money. It has been adversely affected by the recent appreciation of the New Zealand dollar and continuing competitive pressure from other countries with lower cost structures, with the result that sales have fallen,”

Employees and unions have been kept fully informed over the past few years, and were aware that Pilkington Automotive was considering three options: sale of the plant, closure or continuation if better profitability could be achieved. Steps to reduce costs and improve profitability have included two minor downsizings in the past couple of years.

“Unfortunately after a number of years of very hard work by everybody to improve profitability, it appears that international trading conditions are such that the plant is not viable.”

The Taita automotive glass plant was opened in 1953 to service the local vehicle assembly industry. When local assembly ceased in the 1990s, the production switched to export. During the last ten years Pilkington has made a substantial commitment to helping the plant make this transition, including a $15 million capital development in the mid 1990s.

The Taita Pilkington Automotive plant currently has sales of approximately $31 million a year, and employs about 130 people.

The consultation will begin as soon as possible and a final decision will only be taken at the end of this consultation period.

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