Hills to shed hundreds jobs in restructure

1 Nov 2012, 7:25 pm   -   Source: AAP

Hills Holdings is expected to shed hundreds of jobs as part of a big restructure to help it cope with the downturn in the housing, sending shares higher

Troubled clothes line, electronics and building products maker Hills Holdings is expected to shed hundreds of jobs as part of a massive restructure.

Newly installed chief executive Ted Pretty said he did not want to put an exact figure on the number of job losses until shift workers were informed on Thursday night, but he didn't deny that hundreds of people would be affected.

"I've seen that number reported and I won't be drawn, but it is a number you would expect to flow from the closure of one of our sites," Mr Pretty told a media call on Thursday.

The changes will cost the company as much as $110 million, as underperforming parts of Hills' businesses are closed.

Some products will be scrapped and jobs cut from its 2,642-strong workforce.

Hills' roofing business, Fielders, is likely to bear the brunt of the changes, while the Orrcon Steel arm and the company's lifestyle and sustainability businesses, whose brands include the Hills Hoist, Bailey Ladders and Team Poly water tanks, will also undergo major overhauls.

Shares in Hills closed 8.5 cents, or 11.2 per cent, higher at 84.5 cents on the news.

Mr Pretty said the restructure was needed because of the effect that slower economic conditions and a steeper-than-expected drop in construction activity were having on Hills' manufacturing businesses.

"My strong view is that recent events are a call to action to fundamentally review the way we operate and perform," Mr Pretty told shareholders earlier at the company's annual general meeting.

The company would consolidate some manufacturing activities, oversee the exit of certain products and businesses and sites and reduce staffing levels.

"We must now cut our coat according to our cloth," he said.

He said that Hills had no choice but to close some of its underperforming Fielders roofing branches until demand recovered.

The company expects the changes will allow it to reap savings of between $10 million and $15 million in the second half of the financial year and another $30-$40 million in 2013/14, subject to market conditions.

Shareholders were told that no dividend would be paid for the first half of 2012/13 but that the payments should return at the end of the year.

Both Orrcon and Fielders posted operating losses last financial year because of weak construction markets in Australia and New Zealand.

Mr Pretty, a former group managing director at Telstra, said the restructure would also involve Hills no longer making solar-hot-water specific products.

He also lashed out at the federal government for not recognising that businesses like Orrcon and Fielders should have been included in its steel transformation plan, along with BluesSope and Arrium.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube