Hillside fate 'economic sabotage'

Going, going, gone ...
Going, going, gone ...

The times are changing for the venerable Hillside workshop, after last week's announcement by KiwiRail that most of the site was destined for closure. Mike Houlahan looks at how things came to this point, and asks what the future holds.


Five generations ago, Hillside Engineering works was established in South Dunedin.

Three generations ago, it was one of the South's largest employers - 1200 people. About 1 per cent of Dunedin's population worked there, making trains and carriages to ply the main trunk line.

Last week, 90 of the 115 people remaining of Hillside's workforce were told the end was nigh. Negotiations about final redundancy figures are under way, but by next year only the foundry - sold to Bradken - and heavy lift equipment will remain in operation.

Hillside's decline has been slow and painful to watch. Unionists point an accusing finger at the Government and company management for refusing to accept tenders from Hillside to build units for the Auckland commuter rail system, but the groundwork for Hillside's closure was laid well before then.

During Hillside's heyday, road transport was no rival to rail for transport freight but those days are long gone. The railways are now a state-owned enterprise called KiwiRail, a company obliged to make a profit for its shareholders, the taxpayer.

That imperative has seen KiwiRail accept tenders for rail contracts from overseas - the cheapest option - when once the Railways Department might have spent millions on upgrading infrastructure at Hillside to keep the work in house.

KiwiRail have always argued such an upgrade would be hugely expensive and likely to be of use for one contract only, hence economically unviable. Hillside's workers - with their livelihoods on the line - have begged to differ.

However, in the past three years there has been an inexorable decline in the amount of work sent to Hillside and a gradual cutback in staffing levels. In May, KiwiRail put Hillside up for sale, hoping to dispose of it as a going concern.


Going, going, gone.

Last Thursday KiwiRail announced it had sold the Hillside foundry - the most desirable part of the engineering workshop - to Australian manufacturing firm Bradken. KiwiRail said its freight business would now operate the heavy lift facility and the rest of the site would be progressively closed down over the next few months as work was either completed or transferred to the Hutt Workshops in Wellington.

Reaction was swift and pained.

"The loss of 90 highly skilled Hillside manufacturing jobs has destroyed livelihoods across Dunedin and is the result of KiwiRail's blind execution of Government directives," Dunedin South Labour MP Clare Curran and Dunedin North Labour MP David Clark said.

"The decision to close part of Hillside is an act of economic sabotage. The consequences will be felt not only by the workers and their families but by the wider community and businesses as well. Many suppliers and sub-contractors will also lose work because of today's decision."

The Rail and Maritime Transport Union said the preservation of the foundry and heavy lifting equipment was some solace but the closure of Hillside's manufacturing workshops were a body blow.

"Ever since then Transport Minister Steven Joyce went back on his May 2010 promise that Hillside would be building ‘hundreds of wagons', the clock has been ticking for Hillside and its workforce," union acting general secretary Todd Valster said.

"Hillside is more than just a factory, it is a symbol of what New Zealanders once were - a practical, self-reliant and confident people who built a nation that once had the world's highest standard of living. This Government has chosen to destroy that heritage."

The Otago Chamber of Commerce - which played a leading role the vain battle to keep Hillside going - tried to take a glass half-full perspective on the news.

"It quickly became clear that the historic business would not emerge intact from the sale, and we continued to work hard to ensure the most positive outcome possible could be reached," chamber chief executive John Christie said.

"We're very hopeful that the business (Bradken) will continue to grow and make a positive contribution to the local economy, increasing jobs in the future."


While Bradken does not plan to expand to fill all of Hillside's available 7ha, the firm does intend to become a fixture in South Dunedin.

Matthew Criss - Bradken's general manager industrial - said the firm intended to move its 50-strong Dunedin workforce to Hillside and from there provide a broader base of manufacturing work. Lines had yet to be drawn on a map but he envisaged Bradken might end up occupying "less than a quarter" of the Hillside site.

"We have been in Dunedin as Bradken for 48 years and we have a strong, well-skilled, dedicated workforce that currently supplies the forestry, general industrial, quarry and mining sectors. That base and the skills of our people, and the skills of the KiwiRail people we are looking to bring on board, means we can build upon that and seize upon the opportunity with the Hillside foundry."

Criss said Bradken believed the Hillside acquisition would see the firm expand its manufacturing capacity and scope, and allow it to broaden the range of customers it serviced and products it sold. The firm was already very export-focused, and on any given month as much as half the output from its Dunedin plant was sold overseas.

"We think there will be opportunities for expansion and job growth in the future."

The Southland Times