[comment] Whiteware manufacturer Fisher and Paykel has dropped a bombshell, announcing it is moving its Mogiel manufacturing offshore.
The move will result in 430 job losses, F&P said in a statement to the Stock Exchange.
The closure of the Range & Dish Drawer factory in Mogiel is part of a "new global manufacturing strategy" which will also result in plant closures in Australia and California.
The Mosgiel plant will be relocated to three offshore sites starting early next financial year.
John Bongard, Fisher and Paykel Appliances CEO and Managing Director cited ongoing manufacturing cost escalations, particularly in New Zealand and Australia, as the main reason for relocating production.
"We have been faced for many years with an extremely unhelpful exchange rate fuelled by high interest rates. Increasingly complex and costly compliance costs of manufacturing in our home countries have not assisted."
"On top of these factors, free trade agreements with low cost labour countries like China and Thailand have created a playing field we are unable to compete in," he said.
The decision to relocate the Dunedin factory was taken after consultation with the Engineering, Printing and Manufacturing Union in New Zealand, he said.
The Dunedin shift is expected to save the company $14.5 million a year, at a one off cost of $26 million.
The DishDrawer line that currently supplies all non North American markets will be shifted to Thailand.
In a move similar to the Auckland Laundry plant last year, DishDrawers will be made in Thailand and exported to New Zealand, Australia and other non-US markets.
The cooking portion of the plant will be relocated to three separate sites in Mexico, Thailand and Italy.
Engineering and product development for these products will continue to be based in Dunedin.
"Although we are shifting some of our production facilities offshore, our products will continue to be developed in New Zealand by Fisher & Paykel Appliances engineers," Mr Bongard said.
"We have some 300 engineers in New Zealand continuing the excellent design work that has resulted in world leading, innovative product releases over our long history.
"We are also sending key New Zealand, Australian and USA personnel to oversee and manage the manufacturing processes in these new facilities, to ensure the highest quality standards are maintained.''
>>Updates to come
