CSR announced yesterday that it would cut 150 jobs at Viridian, its poorly-performing glass division, due to a challenging environment for building products manufacturers.
An analysis piece in Fairfax Media contends that CEO Rob Sindel “doesn’t really have a choice” but to make cuts at the glass business. It is pointed out that Viridian was written down by $280 million in 2009, $250 million in 2010, then $121 million in 2011.
In the same period, the Australian dollar has increased by 40 per cent, while the construction market has shrunk by 30 per cent.
Sindel told The Australian Financial Review that the high dollar – which has particularly hurt sales of Viridian’s higher end products through the availability of cheaper import options – was something the company was adjusting to.
“We have accepted the Australian dollar is going to be stronger for longer and you can’t rely on construction markets to underpin your business, so you take the factors that are in front of you and set up your structure based on that,” said the CEO.
“We don’t know [what the dollar will do] but we do know . . . you can’t rely on it to weaken. There’s some realisation that you can’t control these changes and there’s not going to be a V-shaped recovery that you may have seen in the past.”
As reported by Manufacturers’ Monthly and others yesterday, costs from the restructure are estimated to be $34 million, but savings of $27 million a year will start to take effect in 2015.