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Fairfax & News dismiss Deloitte’s radical newspaper plant closure plan

Wednesday, 11 July 2018
By Graham Osborne
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Fairfax Media and News Corp say they’ve dismissed a proposal by their hired business advisor Deloitte to close five newspaper printing plants across NSW, Victoria and Queensland. 

Print21 has seen a draft copy of a confidential 18-page document titled Project Rain, prepared by Deloitte Consulting in January 2018, which outlines a range of consolidation options including five site closures over the next two years. Under a plan that would reshape the local newspaper publishing landscape, Fairfax plants at North Richmond and Beresfield in NSW would be shut down and consolidated into News’ Chullora, and News Corp’s Port Melbourne print site, located on valuable real estate land, would be folded into Fairfax Ballarat. Another proposal is the closure of both News Corp’s Murarrie site in Brisbane and its Warwick plant in south-east Queensland.

The consolidation would consist of closing five sites across NSW, VIC and QLD and setting printing agreements in each state, says the Deloitte report.

An excerpt from Project Rain (January 2018).

There are two options outlined for News Corp’s Queensland business. Murarrie in Brisbane, which prints the Courier Mail, would close in December, with the publishing operation transferred to News’ Yandina site and Fairfax’s plant at Ormiston. A second option would consolidate Fairfax Ormiston into an expanded Murarrie. “Two options available and decision required,” says Deloitte in a note.

Between 300-400 print workers would be made redundant under the plan, according to an industry source.

In what’s described as a ‘theoretical best case scenario,’ the report proposed beginning extension work at Fairfax Ballarat VIC and at News Corp’s Yandina QLD in March 2018.

An excerpt from Project Rain (January 2018).

Approached for comment, the companies issued similar statements dismissing the Deloitte proposal as ‘redundant.’

“Deloitte assisted Fairfax and News Corp with some scoping work around printing options,” said a Fairfax Media spokesperson. “Both companies have previously announced to the market that we have been exploring options around printing. The plans and assumptions outlined in the document are completely redundant and were found not to be feasible. Fairfax and News continue to have productive discussions around printing options.”

A News Corp spokesperson said: “The document you refer to is a redundant scoping document and none of the material it contains is of any relevance today.”

The unions are less than convinced. “It seems strange that they would pay a lot of money to a company like Deloitte to prepare a report and then put it on the scrapheap,” says the AMWU’s national print division secretary, Lorraine Cassin. 

‘Deeper strategic opportunities’: Greg Hywood, CEO Fairfax Media.

The AMWU will meet with senior management at News Corp next month to discuss the consolidation plans. “There’s all sorts of rumours out there about what they’re looking at and what sort of collaboration will be taking place, which is affecting the morale of our members,” says Cassin. “We don’t want to be blindsided by an announcement and what we’re saying to the companies is: be transparent, let’s deal with this together.”

Fairfax and News Corp have been talking for some time about sharing print facilities and collaborating on newspaper distribution in Australia. In February, Fairfax appointed a team of advisers to pursue ‘deeper strategic opportunities’ with News after posting a 54 percent fall in net profit to $38.5m in the first six months.

“We expect greater industry cooperation will deliver significant benefits,” Fairfax chief executive Greg Hywood told the ASX at the time. “We have progressed our recent positive discussions with News Corp Australia to seek industry-wide efficiencies in printing and distribution. We have had successful collaborations around shared trucking and printing titles for News in Queensland. Building on this collaboration, we have appointed advisers to pursue deeper strategic opportunities.”

3 Responses to “Fairfax & News dismiss Deloitte’s radical newspaper plant closure plan”

  1. July 11, 2018 at 1:34 pm,

    Flavio
    said:

    A shepherd was herding his flock in a remote pasture when suddenly a
    brand-new BMW advanced out of the dust cloud towards him. The driver, a
    young man in a Broni suit, Gucci shoes, Ray Ban sunglasses and YSL tie,
    leaned out the window and asked the shepherd… “If I tell you exactly how
    many sheep you have in your flock, will you give me one?” The shepherd
    looked at the man, obviously a yuppie, then looked at his peacefully
    grazing flock and calmly answered “sure”.
    The yuppie parked his car, whipped out his IBM ThinkPad and connected it
    to a cell phone, then he surfed to a NASA page on the internet where he
    called up a GPS satellite navigation system, scanned the area, and then
    opened up a database and an Excel spreadsheet with complex formulas. He
    sent an email on his Blackberry and, after a few minutes, received a
    response. Finally, he prints out a 130-page report on his miniaturized
    printer then turns to the shepherd and says, “You have exactly 1586 sheep.
    “That is correct; take one of the sheep.” said the shepherd. He watches
    the young man select one of the animals and bundle it into his car.
    Then the shepherd says: “If I can tell you exactly what your business is,
    will you give me back my animal?”, “OK, why not.” answered the young man.
    “Clearly, you are a consultant.” said the shepherd. “That’s correct.” says
    the yuppie, “but how did you guess that?” “No guessing required.” answers
    the shepherd. “You turned up here although nobody called you. You want to
    get paid for an answer I already knew, to a question I never asked, and
    you don’t know crap about my business…… Now give me back my dog.”

  2. July 11, 2018 at 11:50 pm,

    Fairgo
    said:

    Judging by my last Saturday’s SMH, Fairfax should just give it all away and stop printing. Pathetic journalism, meaningless, leftie-biased diatribe and a Good Weekend magazine that had obviously experienced a folder crash, pages were not trimmed – had to get a knife out and separate them at the top; and the bottom 10% of copy guillotined off!
    All this for $4. I’d rather give it to the Salvos.

  3. July 12, 2018 at 4:50 pm,

    William Bell
    said:

    Fairgo, Weekend Edition AFR hasn’t been great either lately. I used to get a couple of hours or more of informed business news out of it. Lately, I get through it in 1/2 an hr. Seems to be stuffed with ‘filler’ articles to bulk it up. Re the print quality, my view is the text is too small and light, even wearing my glasses in good light I find it difficult to read. I suppose I shouldn’t complain, at least it’s still being delivered where I live, I know they pulled circulation to some outlying areas. After I’ve read it, the paper comes in quite handy for lining the birds cage, although I don’t think my Conure is a great fan of the copy. Printed newspapers are a relic really, I think they’ll disappear in a few years along with Elephants in the wild etc.

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