Fisher and Paykel is to slash 350 jobs in Auckland by moving its washing machine and clothes dryer manufacturing to Thailand.
The company announced the move on Thursday afternoon, saying it would save between $15 and $20 million a year through cheaper wages and other savings.
The move is expected to take 12 months and job losses are unlikely to occur before the end of this year. The decision is a body blow for the mainly South Auckland workers who make up about 16% of the company’s total NZ workforce.
The company says it regrets the need to lay people off and will try to find work elsewhere within the company for as many staff as possible.
Managing director John Bongard says a key factor in the decision is the move by an Australian competitor to shift their production to Asia. All of the company’s major competitors are already in Asia.
Currently the company buys Asian steel, ships it to Auckland, makes the appliances and then sends them back to Australia and Asia. The move will save money by allowing it to source steel in Asia and send it to Thailand to make the products.
Labour will also be cheaper and the factories will be able to operate 24 hours a day, seven days a week without the kind of penalties the company would have to pay in New Zealand.
And while Fisher and Paykel will continue to make fridges and dishwashers in New Zealand, Bongard says there are no guarantees they won’t one day also be moved off-shore.
About 1750 New Zealanders work in F&P’s other operations but those jobs are also under threat because of the high New Zealand dollar and rising interest rates which F&P says are crippling NZ’s export sector.
The company also says the government and trade officials are not helping NZ manufacturers by chasing free trade agreements with countries like China and India
From tvnz.co.nz