...about bloody time
KiwiRail to cull another 300 jobs UPDATED
By Newshub digital staff
Tuesday 2 Feb 2016 4:14 p.m.
Huge job losses are on the horizon for KiwiRail this year, with 300 positions on the chopping block.
It's part of the state-owned rail operator's drive to cut costs and break even ahead of the Government's final cash injection this coming financial year.
Chief executive Peter Reidy casually revealed the move today when he appeared before MPs at a select committee at Parliament.
"Two years ago we had 4200 staff, this year we will probably have 3700, we'll get down to 3400," he said.
It'll mean 800 jobs would have been cut over a two-year period.
"This business in the past, in prior years, through all sorts of different ownership models has not been as efficient as it could be so we'll measure ourselves globally. It is a different market here, it is tough when we don't have the big revenue growth."
The company has been bailed out by the Government each year since it was re-nationalised in 2008 and Mr Reidy is under pressure to change.
"Let's put the facts on the table, we are reducing the cost base of our business because we need to be competitive so we can go to the market and offer attractive rates to exporters.
"It's about future-proofing the business for future jobs and future generations. We're 150 years old and we'll be here another 150 years, but not unless we make some change."
Mr Reidy and KiwiRail chair John Spencer told the committee there isn't enough demand for rail in New Zealand for KiwiRail to be self-sufficient.
They were questioned by MPs about the cost of running KiwiRail and why it's freight was reducing.
The executives said 46 percent of freight was bulk, mostly coal and milk, and production had fallen significantly in both industries.
"There is not enough demand for rail in New Zealand to generate the revenue that would allow the company to be self-sufficient," Mr Spencer said.
"Despite the challenges, we are making changes that will reduce government investment over time."
Finance Minister Bill English said in December taxpayers were going to have to continue to subsidise KiwiRail with hundreds of millions of dollars a year.
Mr Spencer said the Government's money went into tracks and their maintenance, the same way money was spent on roads.
Mr Reidy said a lot of effort had gone into reducing costs.
Newshub. / NZN
Read more:
http://www.newshub.co.nz/business/kiwirail-facing-insufficient-demand-2016020216#ixzz3yzC9Uo00
