Fairfax Media and News Corp Australia are to finally merge some of their printing operations to cut costs with around 120 jobs going.
The news was contained in a statement to the ASX on Wednesday from Fairfax. Talks were first suggested in Fairfax’s interim profit results earlier this year, but have been sporadically held between the two companies for years.
Both companies came close when Fairfax rationalised its printing operations in Sydney and Melbourne in 2014 when they announced the closure of the Chullora and Tullamarine plants in Sydney and Melbourne respectively.
Those decisions were part of a brutal cost cutting that saw 1,900 staff sacked, including printers, journalists and others. Fairfax and News talked about combining plants, especially in Sydney where the News plant is just down the road at Chullora, but nothing came of it.
The two companies have been collaborating with shared trucking and printing in Queensland.
In Wednesday’s statement, Fairfax CEO, Greg Hywood said the new arrangements would make the production of newspapers “more efficient for both publishers”, with Fairfax to see a full-year benefit of about $15 million from the end this calendar year.
“These are landmark initiatives. They demonstrate a rational approach to the complex issues facing the industry,” Hywood said. “Better utilisation of existing print assets makes sense and will deliver economic benefits to Fairfax Media.”
News Corp will to provide printing services for Fairfax across NSW and Queensland, while Fairfax will print News Corp publications from its NSW-based North Richmond plant.
This will mean closing Fairfax’s print centres in NSW’s Beresfield and Queensland’s Ormiston, after a transition period. So the 120 job losses (which will drive much of the $15 million in savings).
The statement from Hywood did not mention Victoria and the printing arrangements there.
Fairfax shares rose 3.2% to 79.5 cents.
