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End of an era: Fairfax and News confirm landmark newspaper printing deal

Wednesday, 18 July 2018
By Graham Osborne
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Fairfax Media and News Corp have announced a ‘landmark’ consolidation initiative that will see the once-bitter rivals sharing each other’s printing networks. Fairfax print sites at Beresfield (NSW) and Ormiston (Queensland) will close, with the loss of at least a hundred print jobs. The AMWU has called emergency meetings of affected workers at several sites.

Fairfax flagships The Sydney Morning Herald and The Australian Financial Review will now be printed at News Corp’s Chullora site. “As part of new arrangements, Metro work currently produced at North Richmond (The Sydney Morning Herald and The Australian Financial Review) will transition to News Corp’s Chullora print site,” Fairfax told the AMWU this morning via email. “This change will open up print windows allowing North Richmond to absorb work from Fairfax’s Beresfield site, including for a number of ACM titles, as well as some products for News Corp.

‘A rational approach to complex issues’: Greg Hywood, CEO Fairfax Media.

“The announced changes will impact printing schedules at the North Richmond site. Once the transition of work is complete, the company will assess its operations, including rostering and staffing levels, and consult and engage with staff regarding any changes that may be necessary.”

In statements to the ASX on Wednesday morning, the companies say News Corp will provide a range of printing services for Fairfax in New South Wales and Queensland, while Fairfax will print publications for News Corp out of its North Richmond (NSW) plant.

“These are landmark initiatives,” said Fairfax CEO and managing director Greg Hywood. “They demonstrate a rational approach to the complex issues facing the industry. The printing arrangements make the production of newspapers more efficient for both publishers. Better utilisation of existing print assets makes sense and will deliver economic benefits to Fairfax Media.”

Hywood says there will be no change to the availability of Fairfax newspapers. “The agreements deliver greater cost variabilisation, enabling us to produce newspapers well into the future.

“Our decision to rationalise some printing assets reduces capital intensity. We expect the combination of the new arrangements, and the changes to Fairfax’s printing network to result in an annualised full-year benefit of approximately $15 million. The financial benefits are expected to begin towards the end of FY19 H1.

“From today, we are consulting with staff at our printing centres affected by the new arrangements. Fairfax is committed to providing comprehensive assistance and support and will meet all our employment obligations.”

Following consultation with staff and a transition period, work will progressively shift to other sites and the Beresfield and Ormiston print sites are scheduled to close, Fairfax told the AMWU. “As a result, all positions at Ormiston and Beresfield sites will be redundant and employees will be exiting unless suitable redeployment opportunities are able to be identified.

“Management has commenced meetings today with affected employees to inform them of the changes. As part of the consultation process, the company will seek feedback and discuss measures to mitigate or avert the effects of changes. This will include exploring any potential redeployment opportunities and providing outplacement services.”

‘This is a commercial deal which makes commercial sense’: Michael Miller, executive chairman, News Corp Australasia.

In its announcement, News Corp says it will provide seven-day printing services to Fairfax in NSW and Queensland. Fairfax will print some publications for News Corp out of its North Richmond plant.

News Corp Australasia executive chairman Michael Miller says the arrangements demonstrate the company’s confidence in the future of printed newspapers and in the influence and impact of trusted newspaper journalism.  In addition, he said the arrangements with Fairfax Media provides benefits of scale and efficiency.

“As a publisher, we have absolute confidence in the ongoing significance of newspapers.  Within this framework, we need to continue to look at the most effective and efficient ways to produce newspapers. This is a commercial deal which makes commercial sense by enabling better use of our existing print facilities.”

In addition to NSW and Queensland, Miller says talks are continuing to develop further opportunities that ensure the competitiveness and viability of News Corp’s mastheads.

News says the arrangement mirrors that in place in New Zealand, where HT&E Media (formerly APN Media) prints certain Fairfax newspaper titles, and in Britain where News UK prints the newspapers of its competitors e.g.  Daily Mail, Evening Standard, The Daily Telegraph(UK) and the Daily Express.

The new printing arrangement will commence this month and the companies say they will continue to explore further opportunities. There has been no announcement yet about their newspaper printing sites in Victoria.

Last week, Fairfax Media and News Corp said they had dismissed an earlier proposal by their hired business advisor Deloitte to close five newspaper printing plants across NSW, Victoria and Queensland. The AMWU said hundreds of print workers would have been made redundant under the plan. That proposal would have shut down Fairfax at North Richmond, which will now continue operations.

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