Home appliances business, Fisher and Paykel (FPA) announced today its decision to axe 740 jobs in Australia and New Zealand as part of new strategy.
The New Zealand based group is closing its Brisbane plant as part of a strategy to relocate production operations to Italy, Thailand and newly acquired refrigeration plant located in Reynose, Mexico.
The move is expected to realised a benefit of approximately $50 million per annum. The funds used from the sale of the current properties will be used to facilitate the move.
The Range & DishDrawer factory in Dunedin, New Zealand, along with the refrigerator plant in Brisbane and the DCS cooking factory in California, USA will all be relocated over the next 12-18 motnhs.
Fisher and Paykel said the remaining production facilities in Auckland and Italy will not be affected.
John Bongard, Fisher & Paykel Appliances CEO and managing director cited ongoing manufacturing cost escalations, particularly in New Zealand and Australia, as the main reason for relocating production.
“We have been faced for many years with an extremely unhelpful exchange rate fuelled by high interest rates. Increasingly complex and costly compliance costs in manufacturing in our home countries have not assisted.”
“On top of these factors, free trade agreementds with low cost labour countries like China and Thailand have created a playing field we are unable to compete in,” said John.
Shares in FPA surged 13% on the news. as the extra saving for the company signify more value for investor.
