Cuts ahead at Fletcher Building
New chief executive ‘disappointed’
Fletcher Building will announce job losses in the coming weeks, following the disastrous $952 million of losses in its building + interiors unit due to major New Zealand construction project problems.
Ross Taylor, chief executive, said in an interview with the Herald that the business expected to announce lay-offs in June to trim overheads and said he was deeply disappointed about that prospect.
“We will be looking at trimming but have not talked about losses yet. We’re doing that out of respect to people and will work through that,” he said of the process where staff could be offered various options.
The business has previously said it had around 18,000 staff.
Asked if cuts would be in the hundreds or thousands, Taylor said: “We’re not talking about numbers. It won’t be thousands. It will be smaller.”
Asked how he felt, Taylor said: “I think it’s very unfortunate. You don’t want to have to ever do that. People are here doing the right thing and supporting what we’re doing.
“So if you find overheads have outgrown the business, it’s very disappointing. I don’t feel good about it at all but it’s the reality. We can’t run the business with too much overhead.”
Taylor said no precise date in June had yet been set for the announcement.
The sale of Fletcher’s metal roof tile business was more advanced than Formica, he said, although he refused to give any indication of valuations or expected proceeds.
“We don’t talk about values because there will be people out there — purchasers — and we want to get it away for as much as we can,” he said of Formica. The sale process would not begin fully until around July.
The metal roof business was smaller than Formica, he said: “I’m hopeful of having that sold by the end of June.”
Asked what he is paid, Taylor said that was public information and he got a base salary of $2m, with annual and three-yearly incentives.
“I had to buy 1 million shares and bought at $6.90 and now they’re at $6.21. The beauty of that is I’m very bullish about the long-term outlook and the board asking me to do that helps,” he said, referring to alignment of his interests and those of other shareholders.
Fletcher is interested in the two big Auckland roading projects announced today, Taylor said.
“It’s in our sweet spot,” he said of Penlink north of the city and Mill Rd in south Auckland.
“We do big road infrastructure projects and we have Higgins which is a roading specialist, so we had a large amount of capacity.”
Asked to respond to a Rider Levett Bucknall report saying Fletcher’s high-rise construction exit would leave a gap in the market, Taylor said: “There will be plenty of people to fill that position. Others will step in. I’ve never seen a market where that doesn’t happen. It doesn’t mean there won’t be short-term issues.”
Taylor and wife Kathy from Australia are now renting in Parnell “but we’re looking to buy, somewhere between Parnell and Remuera, the right side of town because our office is in Penrose. I want a house, not an apartment. I just like living in a house. The sooner I buy, the better because it will take the pressure off me,” said Taylor, an Australian who took over from Mark Adamson five months ago.
“My issue is how many weekends I have off,” he said, referring to long hours and intense work pressure at Fletcher. “Time has been my enemy.”