5 May 2020

James Hardie plans to close Penrose manufacturing plant

2:34 pm on 5 May 2020

James Hardie is to shut a manufacturing plant in Auckland with a possible loss of 120 jobs.


Photo: 123RF

The Australian building products company said the Penrose factory, which makes fibre cement products, had been underperforming for years.

Asia Pacific region general manager Conrad Groenewald said that after 80 years of manufacturing in New Zealand, it was a difficult decision to make.

"However, the company's local manufacturing operation has underperformed over a number of years, struggling with old facilities and equipment fragmented across multiple sites that would require significant ongoing investment to upgrade.

"Covid-19 has also negatively impacted performance. We believe this shift would provide a more sustainable, reliable supply of high-quality products to our customers."

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Consultation with staff and E tū union would take place over the next two weeks before a final decision was made.

The company also proposed to expand outsourcing of its freight and logistics management to a third-party logistics provider, which said it may hire some of the James Hardie team.

E tū union negotiation specialist Joe Gallagher said the timing of the announcement was appalling.

"These are difficult times ... and to hear it the way they did, we were notified by email and through a press release ... that they want to close down the plant and basically import the products from Australia."

"[Workers are] pretty upset and pretty angry."

Gallagher said the rationale - that the plant would cost too much to maintain - was unacceptable.

"The concerning thing for me is this under-investment, so companies don't invest in their equipment and then it's a convenient argument to say that it requires a whole lot of investment."

"We have a perfect opportunity as a country to rebuild New Zealand and to do that we need to have strong local manufacturers providing the products and services to do that.

"So it's pretty disappointing we have a company saying the equipment's old and they can't afford to upgrade it when really they should have been thinking further out.

He said the workers were concerned about finding new employment when the country was most likely headed into a recession.

E tū will meet with James Hardie management tomorrow morning to go over the proposal in detail.

The company said it would keep supplying the New Zealand market and would retain marketing, administration, and support operations in this country.

The proposal is part of a global review of James Hardie's operations, with changes announced across several regions.