CSR today announced it will close its automotive glass production facilities at Geelong and Laverton in June 2009.
The automotive glass business is a very small component of CSR’s Viridian glass operations, with a negligible contribution to total earnings. It was acquired as part of the purchase of the Pilkington Australia and New Zealand glass businesses in June 2007. Given the small scale of the automotive glass business and significant uncertainty of the automotive industry, CSR ascribed no economic value to the business at the time of the acquisition.
CSR expects to cease automotive glass production in June 2009, with final deliveries to customers occurring shortly thereafter. A total of 115 positions will be made redundant. The closure will not affect CSR’s other glass operations.
“The significant recent decline in the number of cars manufactured in Australia means the automotive glass business is no longer viable,” said CSR’s Managing Director, Jerry Maycock. “We will ensure that all affected employees are supported during the closure period.”
In light of the closure, CSR is in advanced discussions with potential buyers of the property at Geelong with the net proceeds expected to approximately offset the costs of closing the facility.
The cash costs (primarily redundancies) associated with the closure are expected to be about $13 million. These costs will be treated as a significant item for CSR’s financial year ending 31 March 2009.