Fisher and Paykel moves offshore

ALI MOORE: When you think of fridges, washers and dryers, Fisher and Paykel is a brand well-known to many Australians. The New Zealand company which has a plant in Brisbane today announced it would be moving most of its operations overseas to Thailand and Mexico. The manufacturer says it can't compete with cheaper overseas made products. The move is part of a worrying trend for local manufacturers.

Michael Troy reports.

MICHAEL TROY: Fisher and Paykel has been one of New Zealand's great business success stories, but workers at the company's Dunedin plant were not celebrating this morning with news hundreds of jobs will go.

WORKER: If they were loyal to us, they would have kept us here. But they're obviously after the dollar, they're not worried about the people, so, good luck to them.

WORKER TWO: Fisher and Paykel was a family company. It's certainly not that now.

JOHN BONGARD, CEO, FISHER AND PAYKEL: The decision has been an extremely tough one for a company that's so proud of its New Zealand heritage, without a doubt.

MICHAEL TROY: A manufacturer for 70 years, the whitegoods maker has grown to be a major international player. But recently, it's been struggling to compete in the global market because of a high New Zealand and Australian dollar and high labour costs.

JOHN BONGARD: As hard as our people have worked, they've tried, the productivity is great in that plant, they've worked really hard on cost down, but we've just run out of head room I'm afraid.

MICHAEL TROY: More than 1,000 jobs will be lost in a strategy the company says will save $42 million a year. Sites in Australia and New Zealand will be shut down and sold to pay for the $100 million relocation. To aid sales in North America, the Dunedin cooker manufacturing plant will be moved to a converted Whirlpool plant in Mexico, which is located in a free trade zone and can take advantage of cheap labour costs without attracting tariffs.

In Australia, this refrigeration production facility in Brisbane will be moved to a new plant being built in Thailand.

ANDREW DETTMER, AUST. MANUFACTURERS WORKERS UNION: The AMWU is appalled and we are not prepared to stand by and allow this to happen. The AMWU says that both the Federal and State Government needs to get into a dialogue along with the AMWU with this company.

MICHAEL CHURCH, FISHER & PAYKEL AUSTRALIA: While deeply saddened by the job losses for the obvious uncertainty and upheaval the news will bring to many families, Fisher and Paykel believed it was best to inform the employees and the market of the intentions as soon as possible.

MICHAEL TROY: While the workers are angry at the decision, investors gave it the thumbs up. Fisher and Paykel's shares rose nearly 12 per cent to $2.10.

PETER ANDERSON, CHAMBER OF COMMERCE AND INDUSTRY: We do have some very good success stories in our manufacturing industry and on a day like today it's important that we don't just see our manufacturing future as doom and gloom.

MICHAEL TROY: Kevin Rudd has stated he doesn't want to be the Prime Minister of a country that doesn't make anything, but manufacturers are suffering.

CLINT MCGILVRAY, AUSTRALIAN BUSINESS FOUNDATION: There's a number of problems facing Australia at the moment. One is inflation, two is the credit crunch and thirdly, it's international competition.

MICHAEL TROY: Australian business groups believe the Government needs to encourage more innovation in the sector.

CLINT MCGILVRAY: We have to actually look at the global webs of enterprise where we best can compete, where our production or services meet demands and fill niche markets.

PETER ANDERSON: There are up and down sides to globalisation but as an overall proposition Australia has been tremendously advantaged by globalisation. We may lose jobs to some Asian countries, for example, but we all know that we are being made tremendously wealthy as a country as a result of our trade with Asian countries like China and India.

MICHAEL TROY: For the moment, the workers at Fisher and Paykel face an uncertain future, with many of their jobs to go within 18 months.