The New Zealand unit of Bridgestone had lost money in the past two years, despite revenues rising to NZ$217m last year, a local report said.
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Bridgestone said on Friday that it would close its Christchurch tyre factory by Christmas, sacking 275 people in a move that has devastated workers, their union said.
Companies Office files show Bridgestone, a tyre maker, retailer and wholesaler, lost $7.1m in the 2008 calendar year in New Zealand, a Business Day/NZPA report said. The loss in the previous year was $3.8m. The firm made a $1.2m profit in 2006.
In announcing the closure of the Christchurch plant and one in Adelaide, Australia, Bridgestone’s owners in Japan blamed intensifying cost competition globally. In Adelaide, 600 jobs will go.
Bridgestone’s distribution, customer service and retail networks in New Zealand, which employ more than 1,500 people, are unaffected.
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By GlobalDataThe head office is in Auckland and it also owns Tony’s Tyre Service.
While its New Zealand annual revenues rose more than $20m to $217m in the latest year, the annual report showed the cost of goods sold rose about $25m, to $148m. In the latest year, employee benefits were $33.3m, $3m higher than the previous year.
Aside from normal costs, such as rent, freight and power, Bridgestone reported an unexplained $22.4m in “other expenses”, up from $17.7m the previous year, the report said.
The “other expenses” knocked the company from what would otherwise have been a profit into a $10m pre-tax loss, before a $3m tax benefit.
Bridgestone Rubberworkers union secretary Kerry Pearce told Business Day the company had said it would pay full redundancy and holiday entitlements to the workers. They had a redundancy agreement of seven weeks’ pay for the first year of employment and two weeks for each following year, uncapped.
“There’s a lot of history on this site [it was established by Firestone – ed], with some members having worked here 45 years and some being the second and third generation of their families to have worked here, so it is a very sad day for all of us,” he said.
Bridgestone was the last tyre manufacturer in Australia and New Zealand.
The firm said tyre production in both countries had been running at a loss for several years and had been under review for some time.
Tyres for New Zealand would be imported from Japan, southeast Asia, Europe and the US.
