KiwiRail fails to find Hillside buyer, but foundry sold to Australia’s Bradken

KiwiRail has failed to find a buyer for its unprofitable Hillside workshops in Dunedin apart from the foundry operation, which it has conditional agreement to sell to ASX-listed manufacturer Bradken for an undisclosed sum.

The heavy lift facility at the 7.2ha site will now be operated by state-owned KiwiRail's freight business and other operations will be progressively closed down over the next few months as work is either completed or transferred to the Hutt workshops.

"Despite a rigorous sales campaign there simply wasn't a buyer out there for the whole operation," chief executive Jim Quinn says in a statement.

"This will be very difficult for our staff and although some will be transferred to Bradken or the KiwiRail Freight business, there will be redundancies."

A spokeswoman for KiwiRail could not say if the sale price would be made public. Bradken already has foundry operations in New Zealand and will continue to do some work under contract for KiwiRail.

There are 115 workers at Hillside.

The rail operator is on a drive to strip out $200 million in annual spending if it is to meet forecast earnings of $64.6 million by 2013.

Shares of Bradken fell 0.1% to $A4.55 on the ASX today, valuing the company at $A772 million, and have declined 41% in the past year.

The New South Wales-based firm employs 6000 people worldwide.

(BusinessDesk)

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Where are the Unions? Why didn't the unions buy this? The top 10 unions have a combined income of nealry $100M annually - surely since they have all the answers to everything, they could have brought this for their members - and kept them employed.

Yet another fail for Little and EPMU...

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I suspect Hilside's heavily unionised work force is part of the reason for its demise? Just like Solid Energy, paper mills etc. The Unions wouldn't buy into a business where they would have to meet their own demands? This could be good thing eventually, business closes, private company picks it up out of the ashes for a song on the back of oil discovery re-employs labour without union influence company runs proftably, returns the improved productivity with good wages to staff and engineering in Dunedin booms again? "Yeah right' I can hear some of you saying already, but it could happen?

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Had these workshops been contracted to build the trains, theres a good chance the land, buildings and business could have been sold as a going concern.

This is bigger picture stuff, however this CE and the National Government dont seem to understand the long term value of skilled employment and maufacturing to this economy.

This government time and again appear to be clueless, run by a salesman who doesnt give a toss about people below his level.

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