In a double blow for Dunedin, only hours after yesterday morning's Fisher and Paykel announcement, Tamahine Knitwear announced it would close in July, with the loss of a further 50 jobs in the city.
The knitwear company cited the ‘‘flood of low-cost Asian imports'' and the high New Zealand dollar as the primary causes for the closure.
The Fisher and Paykel Appliances retrenchment, with the first of the 430 job cuts to be in December this year and the last in May 2009, will see the end of manufacturing at the plant.
The whiteware manufacturer is also closing plants in California and Cleveland in the United States, and in Brisbane, under its ‘‘new global manufacturing strategy'' - with a total of about 1000 job losses. Production will move to a just-purchased plant in Mexico, or to production facilities in Thailand or Italy.
The move will leave about 90 jobs at the Mosgiel plant in its design and product engineering group - where Fisher and Paykel's signature DishDrawer product has been the manufacturing mainstay for 11 years.
At its peak, the 22-year-old plant employed 600-700 workers seasonally.
The past two years have been unsettling for Mosgiel staff as Fisher and Paykel redundancies elsewhere climbed to about 500 - including 450 laid off in Auckland.
Mr Bongard described yesterday's announcement as ‘‘devastating'' for staff and a ‘‘horrible day'' for the company, but defended the decision in operational terms.
‘‘If we had not taken this decision we would not have had a company left,'' he said from Auckland, immediately after Mosgiel staff were informed of the decision.
The decision has long-term implications for housing, employment and growth in Dunedin and Mosgiel.
Chamber of Commerce chief executive John Christie, hearing of the announcement yesterday while in Shanghai, said although Fisher and Paykel had been an integral part of the community for decades, the decision revealed ‘‘they were turning their back on Dunedin and New Zealand''.
‘‘This is gut-wrenching for families. Economically, this is going to be very hard to get over, but Dunedin has shown resilience in the past,'' he said.
The Council of Trade Unions (CTU) denounced yesterday's decision.
With an after-tax profit of $61 million last year, the company was making hundreds of New Zealanders redundant in an effort to maximise profits for shareholders using cheap labour overseas, it said.
CTU president Helen Kelly said Fisher and Paykel's decision would take a ‘‘heavy toll'' on Mosgiel and the wider Dunedin community.
‘‘These were good jobs that didn't need to be lost. The announcement reinforces the need for an acceleration of investment in modernisation, infrastructure and skills in New Zealand,'' Ms Kelly said.
Mr Bongard cited the ‘‘increasing difficulty of doing business in New Zealand'', with the high New Zealand dollar, high interest rates and free trade agreements as compounding factors, noting the biggest cost savings would be in labour and freight.
EPMU national secretary Andrew Little, at Mosgiel yesterday, was scathing of the redundancies, saying Fisher and Paykel ‘‘was obsessed with working in low-wage economies''.
‘‘The decision is based solely on the bottom line in favour of shareholders, not the workers and community,'' he said.
Mr Bongard rejected the suggestion Fisher and Paykel was focusing on doing business in low-wage economies, but noted New Zealand manufacturing could not compete against imports from those economies.
‘‘No. It's not all about labour [costs],'' he said.
The total one-off redundancy and closure costs are set at about $50 million, but offset by savings of $50 million.
Similarly, capital expenditure is about $100 million, which is offset by property sales worth up to $100 million.
During the next 13 months Mosgiel jobs will initially be lost from the cooling division through to completion of redundancies in May 2009, when DishDrawer division staff will be laid off.
Mr Bongard said there were no immediate plans for the Mosgiel site but it was likely to be sold eventually.
