Thailand Takes Away 350 New Zealand Jobs

[sriracha john]

Thailand takes 350 New Zealand jobs

Fisher and Paykel Appliances Holdings Ltd announced Thursday that it was moving part of its production to Thailand in a cost-saving operation that is to cost 350 New Zealanders their jobs. The manufacturer said it would start making its washing machines and clothes dryers, currently produced in Auckland, at a new factory in Thailand next March. Fisher and Paykel is one of New Zealand's most successful manufacturers with annual turnover of NZ$1 billion (about $740 million or 24 billion baht) and 4,000 employees around the world. The move to Thailand was expected to save NZ$10 million to NZ$15 million a year.

* B260.3 million to B390.4 million *

Continued here:

http://www.bangkokpost.com/breaking_news/b...s.php?id=118352

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F & P moves washing machines off shore

Fisher and Paykel is to slash 350 jobs in Auckland by moving its washing machine and clothes dryer manufacturing to Thailand. The company announced the move on Thursday afternoon, saying it would save between $15 and $20 million a year through cheaper wages and other savings.

The move is expected to take 12 months and job losses are unlikely to occur before the end of this year. The decision is a body blow for the mainly South Auckland workers who make up about 16% of the company's total NZ workforce.

The company says it regrets the need to lay people off and will try to find work elsewhere within the company for as many staff as possible. Managing director Jon Bongard says a key factor in the decision is the move by an Australian competitor to shift their production to Asia. All of the company's major competitors are already in Asia.

Currently the company buys Asian steel, ships it to Auckland, makes the appliances and then sends them back to Australia and Asia. The move will save money by allowing it to source steel in Asia and send it to Thailand to make the products.

Labour will also be cheaper and the factories will be able to operate 24 hours a day, seven days a week without the kind of penalties the company would have to pay in New Zealand. And while Fisher and Paykel will continue to make fridges and dishwashers in New Zealand, Bongard says there are no guarantees they won't one day also be moved off-shore.

About 1750 New Zealanders work in F&P's other operations but those jobs are also under threat because of the high New Zealand dollar and rising interest rates which F&P says are crippling NZ's export sector.

The company also says the government and trade officials are not helping NZ manufacturers by chasing free trade agreements with countries like China and India.

- tvnz.co.nz

Edited April 26, 2007 by sriracha john

[PhilHarries]

Labour will also be cheaper and the factories will be able to operate 24 hours a day, seven days a week without the kind of penalties the company would have to pay in New Zealand.

Irritating these bluddy labor laws, much better in the good old days when you could hire kids for next to nothing, have entire families working twelve hour shifts seven days a week for a pittance.

[sriracha john]

Labour will also be cheaper and the factories will be able to operate 24 hours a day, seven days a week without the kind of penalties the company would have to pay in New Zealand.

Irritating these bluddy labor laws, much better in the good old days when you could hire kids for next to nothing, have entire families working twelve hour shifts seven days a week for a pittance.

Plus they won't have to worry about any of those annoying environmental protection laws for any toxic waste generated in the manufacturing process... there's so many benefits to moving to Thailand.

[peter991]

Maybe the Kiwis should have a chat with Australia's Workplace Relations Minister Peter Reith. Despite doom and gloom from the unions and a rising Australian dollar, the Australian economy is booking. Australia is issuing 2000 Working Holiday Visas each week as there is a labour shortage.

Peter

[kmart]

Labour will also be cheaper and the factories will be able to operate 24 hours a day, seven days a week without the kind of penalties the company would have to pay in New Zealand.

Irritating these bluddy labor laws, much better in the good old days when you could hire kids for next to nothing, have entire families working twelve hour shifts seven days a week for a pittance.

Workin down t' pit f'ra pittance? Luxury! You were bloody lucky!

I used to buy my household appliances from the Planet Zanussi, where the "appliance of science", plus child labour, no environmental controls, and 16hr shifts gave me unbeatable prices.

Those little brown fingers don't snag conveyor belts .

[AlexLah]

Yeah, so now the managament can get their well deserved increase in salary of 2 Million Aussie dollar a year each.....

Anyone knows the net profit last year for this company?

[peter991]

sj: Your comments reminded me about a beautiful unspoilt island off the coast of Thailand that was developed early last year. It was supposed to be a showcase of Best Environmental Practice.

There was one downside: Disposing of all the used plastic drinking bottles - it cost too much to ship them to the mainland - so they burnt them on the island.

Peter

[steveromagnino]

2006 EAT somewhere in the realm of $63-64m NZD if I recall correctly.

Man you guys are a tough crowd.

Yeah, maybe they should just stay operating in NZ, until they go bust from having to defend market share against all the other firms making these sorts of appliances in Thailand, Japan, Vietnam.... they already are sourcing materials and parts from abroad and have made a strategic decision based on their desire to sell abroad to their biggest market USA, and other markets like Singapore. What, you think they should keep making stuff in NZ even though they have a global market? Hold up, what about their facilities they already have outside NZ; are you going to complain about them too for 'hurting the poor NZ worker'?????

They already have a manufaturing facility in Clyde USA where they can manage the high cost labour there effectively because some jobs require expertise and some locations eliminate shipping costs. They, unlike some of the posters on this board, are actually business people who know what they are doing. Material prices and the high Kiwi dollar (again) must be wiping them out if they stay in NZ. And the fact that their only competitor locally making in Aussie moved, thus effectively eliminating their CER (closer economic relations) subsidy for the Aussie market makes it simply impossible to sell a medium high end product for a luxury level price. Instead they will keep doing research and development in NZ; build some items in Thailand and ship. Would seem to be to be super smart. Good for the consumer as well. Good for Thai workers too.

For all the drivel about Thailand on this board, when a country with a logical case for moving manufacturing here actually does so, some posters make the oddest comments about it, might as well complain about globalisation LOL. But hold up, some of you already do that with regards to Thailand protectionism and how this makes Thailand so TIT and stupid. Talk about playing it both ways.

Go and talk to Gary Paykel, and say to his face that he must be making a killing underpaying Thai workers, hiring kids and making staff work 7 day 12 hour days. Man he will have the biggest laugh; he loves comedy. It will make his day :-)

He may not be perfect and F&P may not have a perfect record particularly with regards to how they used to deal with their dealer network to stifle competition, but they take CSR fairly seriously; I think you'll find plenty of Thai people with skills quite happy to work at their factories for a fair, legal wage, and I think you'll find they do just fine environmentally.

[kmart]

^^Thanks for the earnest explanation stevero, but i was just having a larf up there; as I love comedy too.

[cdnvic]

Man, when the Kiwis that worked there eventually show up for work they're going to be gutted.

[steveromagnino]

Man, when the Kiwis that worked there eventually show up for work they're going to be gutted.

nah mate, they'll be like

'hey cool aye, now we can go on the dole like youse guys aye! now giz uz some burger rings, I fight youse for your company shirt bro.'

Kmart - ya got me (I think for the second time for a windup :-)

[Old Croc]

Maybe the Kiwis should have a chat with Australia's Workplace Relations Minister Peter Reith. Despite doom and gloom from the unions and a rising Australian dollar, the Australian economy is booking. Australia is issuing 2000 Working Holiday Visas each week as there is a labour shortage.

Peter

Reith!! I think you meant to say the former Workplace Relations Minister. He held that portfolio in the late 1990s. He resigned from Government, as the Defence minister, in 2001 following the scandal involving a $70,000 official phone bill racked up by his son travelling overseas. His passing was not mourned by workers following his hard line, and sometimes illegal, acts during the waterfront dispute in 1998.

The current IR minister is Joe Hockey.

[samran]

Man you guys are a tough crowd.

Stevo,

Lets go open an English language tabloid newspaper. Lets call it the "Arthit", or the "Jotmai Prajam Wan" or maybe even "Khao Tua Lok".

Fill it up with contradictory bad news stories (apart from na 3 where there will always be a luvlie), and charge 15 baht. We can swap the editorial duties everyother day, knocking everyone and everything. We can toss a coin as to who can author the "sky is falling" column, except you better take care of the "bloody foreigners taking all our jobs and don't mix in...(but I don't count cause I'm too old to fit in)" column.

No article ever needs to be more than 50 words (except of course the editorial, 200 max in bold type). The pet monkey up the road can write the business and economics section. We can advertise for the 'those whacky russians' columist at later date.

Are you in, brother? There is a market, I can sense it.

[chuchok]

While Gary Paykel was ment to be a top bloke (I think that he new most of his workers by first name basis...no mean feet!!) it wasn't that long ago that they used bully tactics when dealing with suppliers.ie:buy everything off F & P or you don't get to stock any of our products.

Being such a large firm in NZ, i'm sure that they obtained pref duty rates for quite a while,but I am not 100% on that.

Make good products though....

[sriracha john]

Go and talk to Gary Paykel, and say to his face that he must be making a killing underpaying Thai workers, hiring kids and making staff work 7 day 12 hour days. Man he will have the biggest laugh; he loves comedy. It will make his day :-)

He may not be perfect and F&P may not have a perfect record particularly with regards to how they used to deal with their dealer network to stifle competition, but they take CSR fairly seriously; I think you'll find plenty of Thai people with skills quite happy to work at their factories for a fair, legal wage, and I think you'll find they do just fine environmentally.

So are you saying that they won't make more profits by utilizing Thai workers versus New Zealand workers? Or are you saying that factory workers don't work 12 hour shifts?

And you have full confidence that they will be in full compliance with following New Zealand-level environmental protection practices here in Thailand?

If they do... they'd be a rarity.

[kiakaha]

To be more accurate, Thailand didn't take the jobs...NZL outsourced the jobs...and a very important precursor event was the 2005 NZL-Thai CEP agreement.

[Shrubbery]

350 jobs is nothing to what has been lost by the UK to India.

Banking and energy suppliers being the main.

[kmart]

350 jobs is nothing to what has been lost by the UK to India.

Banking and energy suppliers being the main.

When informed by my boss that my job was being sent to India, I was initially very excited as I'd never been there before, and I love a good curry....

Imagine my dismay when I found out the truth?!?!?

[Donnyboy]

Good move really as the future doesnt look rosy for NZ made appliances when the free trade agreement with Thailand on whiteware comes into effect. F&P have been profitable by being innovative and a developer of excellent products. Used to have a "dishdraw" dishwasher. Best dishwasher,even better than the european brands IMO.

At the end of the day, F&P need to grow and be profitable to look after its employees and shareholders, and this step is one of the ways to achieve that.

this industry (in NZ) and many others(car assembly, clothing, footware, etc) have fallen by the wayside due to "globalisation" and NZs open economy and deregulation.

[steveromagnino]

Go and talk to Gary Paykel, and say to his face that he must be making a killing underpaying Thai workers, hiring kids and making staff work 7 day 12 hour days. Man he will have the biggest laugh; he loves comedy. It will make his day :-)

So are you saying that they won't make more profits by utilizing Thai workers versus New Zealand workers? Or are you saying that factory workers don't work 12 hour shifts?

And you have full confidence that they will be in full compliance with following New Zealand-level environmental protection practices here in Thailand?

I doubt their factory in USA meets NZ level environmental protection practices; and stand by my comments:

- I don't think the staff will be working 12 hour 7 day weeks (it is one phrase, you can't take half of it and not the other half :-)

- he won't be underpaying or not meeting Thai labour/environmental law and most likely will be exceeding both

I totally agree with the point that the laws are easier to deal with here and the pay is lower; that's why people come and make stuff here, and why most NZ manufacturing complain bitterly about many of the crazy laws in NZ like the resource management act. But if NZ wants to play the super green and clean image then it is worth it for them to do so even if it means that companies outsource the manufacturing elsewhere. Why F&P should be singled out as a bad guy? This comment was replying to some of the respondents who were hinting that F&P would:

'have entire families working twelve hour shifts seven days a week for a pittance' (obviuosly there are labour laws that not only exclude using child labour but also restrict work hours and minimum pay standards are not a pittance)

'they won't have to worry about any of those annoying environmental protection laws for any toxic waste' (there are SOME laws, but less than NZ for sure)

In answer to a few other things:

Samran, not sure it will work as there is already the free internet service where any news can be distorted to make Thailand look like a bunch of idiots and thugs, i'll send you a link sometime :-) The monkey idea is good, perhaps we can have a room full, and see if they DO produce some Shakespeare

Chuchok, I did allude to the F&P practice of forcing distributors to carry only their products, knowing full well that many of their distributors would be unable to survive without F&P as a mainstay; Noel Lemming effectively stopped that practise in the market place as they had everything under one roof; I think they also were stopped legally from doing this via the Commerce Commission and given a major slap on the wrist. Abuse of dominant market position I think it was.

The dishdrawer and a few other things they did was what made F&P so popular in NZ; good branding and ad campaigns helped. Doubt too many Kiwis (other than the 350) would care much where the stuff is made; not much consumer stuff of this type gets made there; everyone should be busy making high value add stuff like Cookson Boats TP52s and the like rather than low value add factory operations. Besides which, this is part of a campaign to supply their foreign markets (which are bigger than NZ) more efficiently.

There are about what 80,000 unemployed, and the rate is less than 4%, lower than it has been for a while. I suspect these workers will have little problem finding more work somewhere else; most of the 80,000 unemployed are just dole bludgers anyway. We should persaude that lot to move over to the GOld Coast like the other 100,000 of them over there :-)_

Edited April 27, 2007 by steveromagnino

[torito]

Good move really as the future doesnt look rosy for NZ made appliances when the free trade agreement with Thailand on whiteware comes into effect. F&P have been profitable by being innovative and a developer of excellent products. Used to have a "dishdraw" dishwasher. Best dishwasher,even better than the european brands IMO.

At the end of the day, F&P need to grow and be profitable to look after its employees and shareholders, and this step is one of the ways to achieve that.

this industry (in NZ) and many others(car assembly, clothing, footware, etc) have fallen by the wayside due to "globalisation" and NZs open economy and deregulation.

Right on the spot 'Donnyboy' ...a simple business decision, possible due to globalization and open market.

Edited April 27, 2007 by torito

[steveromagnino]

Good move really as the future doesnt look rosy for NZ made appliances when the free trade agreement with Thailand on whiteware comes into effect. F&P have been profitable by being innovative and a developer of excellent products. Used to have a "dishdraw" dishwasher. Best dishwasher,even better than the european brands IMO.

At the end of the day, F&P need to grow and be profitable to look after its employees and shareholders, and this step is one of the ways to achieve that.

this industry (in NZ) and many others(car assembly, clothing, footware, etc) have fallen by the wayside due to "globalisation" and NZs open economy and deregulation.

Right on the spot 'Donnyboy' ...a simple business decision, possible due to globalization and open market.

large chunk of it was due to the Aussie/Kiwi markets having a tarriff arrangement that fovoured AUssie/Kiwi companies; once the AUssie one outsourced, the Kiwi company didn't get the tax break anymore.

WORST YET!

http://www.wingmusic.co.nz/player/cd13.html

they have outsourced AC/DC to CHINA!!! The shame of it! If anyone should be complaining, it should be Angus!!

[kmart]

WORST YET!

http://www.wingmusic.co.nz/player/cd13.html

they have outsourced AC/DC to CHINA!!! The shame of it! If anyone should be complaining, it should be Angus!!

Sacrilege!

I hope someone has "Wing" clipped anytime soon. Irritating bloody eunuch turns up all over the Internet when you ain't expecting him. A bit like "Kato" in the Pink Panther... Little minkey.

[steveromagnino]

A bit like "Kato" in the Pink Panther... Little minkey.

I want a ruem.