The Government appears to be backing away from providing any guarantee to preventing Fisher and Paykel Appliances from failing after the company indicated on Monday it was in some difficulty.
Prime Minister John Key said on Monday, and again on TV3's Sunrise, that talk of committing to a bail-out of Appliances was premature but letting such an important company fail because of a temporary crisis would be unacceptable.
Fisher and Paykel Appliances announced it expected a significant drop in profit and a large increase in its debt as global demand slowed.
Mr Key said the Government would reserve the right to become a stakeholder in the company if it went to the wall but suggested it had the strength to tackle the crisis itself.
The Government needed to stay engaged with Appliances as it was a "very unusual and unique" New Zealand company and important to the economy.
"We don't want to be destroying the basis of New Zealand's manufacturing solely because there is a temporary credit crisis."
However, Labour Party economic development spokesman Trevor Mallard said the Government must make its position on Appliances clear after the mixed messages it had given.
Fisher and Paykel Appliances chief executive John Bongard had said on radio that Mr Key gave him an assurance the Government would not let the company collapse, Mr Mallard said.
"But in the House today, Transport Minister Steven Joyce, acting on behalf of the Finance Minister [Bill English] refused to confirm that assurance.
"There are 1600 jobs at stake here and the last thing either the company or the workers need is mixed messages from different Government ministers."
In the House, Mr Mallard pushed Mr Joyce to answer the question about whether Mr Key had given a categorical assurance to Appliances the Government would not let it fail, earning a telling-off from Speaker Lockwood Smith in the process.
Mr Joyce fudged the answer, saying companies in trouble would be encouraged to try every avenue before approaching the Government, which saw itself as a last-resort option.
Engineering, Printing and Manufacturing Union national secretary Andrew Little said in an interview that any Government bail-out of Appliances must be attached to commit-ments to New Zealand and its workforce.
"As a major employer, Fisher and Paykel Appliances should receive help if it needs it at this time but any support should come with a proviso that the company show a greater dedication to keeping jobs in New Zealand.
"Any taxpayer bail-out should also come with some public equity in the company otherwise it's a bad situation of privatising the profits in the good times and socialising the losses in the bad."
Any deal had to be for the benefit of more than just shareholders, many of whom lived overseas, he said.
The union was dealing with a company just north of Auckland which had announced that 75% of the 300-strong workforce were to be made redundant.
Although the firm was United States owned, the people it employed lived in a small community and probably should qualify for government help.
Otago-Southland Employers Association chief executive Duncan Simpson said the focus from now on should be how to protect jobs.
Something might come out of next week's job summit, but he did not expect a relief package to emerge immediately after the summit.
There were other things companies needed to try before approaching the Government.
Fisher and Paykel Appliances was still making a profit, albeit much smaller than last year.
The company was looking for capital. That might be difficult to find, so it could come back to the Air New Zealand case where the Government took a stake to prevent a company from failing, he said.
Companies Mr Simpson had dealt with were looking at opportunities to hold off redundancies.
Rio Tinto, the operator of the aluminum smelter near Bluff, was introducing a scheme to allow workers to take sabbatical leave of up to two years with a guaranteed job at the end of the period.
"The company was astonished by the response, which I understand was double what they expected.
The company is facing a 30% loss in production and can't retain the whole workforce."
Reduced hours was another method to help save jobs as it was important for the country to retain the base of skilled workers so when the recovery came, the manufacturing industries were in a strong position to capitalise.
"We don't have to bail out General Motors, Ford and Chrysler or the banks, as they have done in the United States.
Any government help can be targeted exactly to where it is required," Mr Simpson said.
