Low tariffs killing local whitegoods industry

By James Wells

ADELAIDE: The closure of whitegoods manufacturing facilities by Electrolux in Australia and Fisher & Paykel in New Zealand, should demonstrate that low tarriffs have led to overseas production and increased imports within this commoditised category.

The closure of Electrolux’s Regency Park dishwashing factory yesterday follows the announcement last week by Fisher & Paykel that it would close two factories at East Tamaki in New Zealand and relocate the manufacturing of SmartDrive and AquaSmart washing machines to Thailand which will save the company between $10 million to $15 million and cut approximately 350 positions.

Fisher & Paykel Appliances managing director, 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.

“Most of our competitors supplying the Australasian market do so from facilities in low cost Asian countries which offer generous manufacturing incentives.”

Bongard said the recent announcement by “a major competitor in Australia” to move its laundry production to Asia has eliminated the CER duty that Fisher & Paykel previously enjoyed, meaning margins for laundry products are coming under pressure.

The competitor Bongard referred to, Electrolux, announced last September that will close its Beverley plant in South Australia which employ 350 people  manufacturing commodity whitegoods including washing machines and dryers.

According to a report on the closure of Electrolux’s dishwashing factory published in today’s Adelaide Advertiser, Regency Park worker Peter Jaffer, 58, summarised the situation facing the local whitegoods industry, despite indicating he was satisfied with his redundancy package and hoped to take some time off work before seeking another job.

"Low tariffs is killing off the whitegoods industry in Australia," he said.

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