By Sarah Falson
NEW ZEALAND: Fisher & Paykel Appliances will close part of its manufacturing operations in New Zealand and relocate them to Thailand in an effort to cut costs, culling approximately 350 positions.
The two Auckland-based factories are responsible for manufacturing F&P Smart Drive and AquaSmart washing machines and clothes dryers, and will both be moved to Thailand, saving the company an estimated $10 to $15 million per year in manufacturing costs.
F&P CEO and MD, John Bongard, said manufacturing costs in New Zealand were creeping higher each year, forcing the company to take a leaf out of its competitors’ books and set-up shop in low-cost Asia.
“The decision to move the laundry plant out of New Zealand wasn’t one that was taken lightly,” said Bongard.
“Most of our competitors supplying the Australasian market do so from facilities in low cost Asian countries which offer generous manufacturing incentives.”
A notice to retailers from the company today said the recent announcement by “a major competitor in Australia” that they were to move their laundry production to Asia has eliminated the CER duty that F&P previously enjoyed, meaning margins for laundry products are coming under pressure.
In September last year, F&P competitor, Electrolux Home Products, announced it would axe 525 jobs and close two plants — one manufacturing laundry products and the other dishwashers — relocating them to South East Asia and Europe. The laundry contingent, based in Beverley, will close this time next year to be relocated to Thailand.
Whirlpool also recently moved its Iowa, USA laundry manufacturing plant to Mexico, dumping 1,200 jobs.
Bongard said the move is logical considering the high costs the brand pays to maintain its New Zealand facilities.
“Also the environment in New Zealand for our type of manufacturing operation has deteriorated due to a combination of factors, such as high interest rates, persistently high exchange rates and some trade and tariff policies.
“Our laundry margins have suffered considerably over the past 4-5 years. Without this relocation to Thailand our continued future in laundry design and manufacture would be doubtful.”
The company said the 350 job losses are unlikely to occur before December this year and that it will endeavour to accommodate as many staff as possible elsewhere in the organisation as vacancies arise.
The research and development for F&P’s laundry range will continue to be based in New Zealand.
“We must persist in pushing the innovative envelope for our products in order to stay ahead of the game,” said Bongard.
“If we don’t continue to innovate, we won’t survive, but in order to do this, we also need competitive manufacturing facilities. This is what this move is addressing.”
The facilities’ relocation will take place over the next 12 months, with initial production in Thailand planned for March next year.