350 jobs to go as WesTrac wields axe
The company, a division of Seven Group Holdings, provides Caterpillar machinery such as bulldozers and trucks to miners and builders.
WesTrac blamed "challenging market conditions" for the job cuts.
"It is anticipated that the restructure will result in approximately 350 redundancies across WesTrac's NSW-ACT business which will be implemented in the next month at an approximate cost of $10 million," the company said. WesTrac had introduced cost-cutting initiatives over the past eight months, but has had to take further steps.
Across Australia, WesTrac has more than 3500 employees, primarily in Western Australia and NSW.
This week more than 1000 jobs were lost in the coal industry as miners reacted to low contract prices, weak demand and high costs.
Most exposed are steaming coal producers in the Hunter Valley, along with some of the higher cost operators in Queensland.
At the same time, the largest companies in the industry, including BHP Billiton and Rio Tinto, are seeking to sell some mines as part of moves aimed at reducing losses in the sector. The deepening industry-wide cuts come as the federal government considers either removing or reducing the size of the carbon tax, which may provide some relief.
However, since many of the coal industry's pressures stem from rising competitive pressure from the US and Indonesia in export markets, any impact from changes to the carbon tax may be minimal.
The carbon price is fixed at $23 a tonne, which will rise to $24.15 a tonne on Monday and $25.40 a tonne from July 2014.
A decision on a faster transition to a floating carbon price is expected as soon as next week.
Frequently Asked Questions about this Article…
WesTrac, the mine services operator and Caterpillar machinery dealer that is a division of Seven Group Holdings, announced a restructure expected to result in about 350 redundancies across its NSW and ACT business. The company blamed "challenging market conditions" and said the changes follow cost-cutting steps taken over the past eight months.
WesTrac said the restructure will cost approximately $10 million and will be implemented within the next month for its NSW-ACT operations.
Across Australia WesTrac employs more than 3,500 people, with the workforce primarily based in Western Australia and New South Wales.
The article notes that more than 1,000 jobs were lost across the coal industry in the same week, as miners reacted to low contract prices, weak demand and high operating costs.
Steaming coal producers in the Hunter Valley and some of the higher-cost operators in Queensland are described as the most exposed to the current pressures in the coal sector.
The largest companies in the industry, including BHP Billiton and Rio Tinto, are seeking to sell some mines as part of efforts to reduce losses amid the deepening sector-wide cuts.
The carbon price is fixed at $23 a tonne, rising to $24.15 a tonne on Monday and to $25.40 a tonne from July 2014. The federal government is considering removing or reducing the carbon tax or moving faster to a floating price, which may provide some relief, though the article notes the impact could be limited because many pressures come from international competition.
Everyday investors may want to monitor company announcements about restructures and costs (for example the $10 million WesTrac charge), sector job-loss trends, asset sales by major miners, coal pricing and demand, and government decisions on the carbon tax — all factors highlighted in the article that can influence industry performance.
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