Invensys to shut doors in Mt Maunganui

1.00pm

Invensys Appliance Controls is shutting its Mount Maunganui plant and moving its manufacturing base to China.

Staff were told yesterday that Invensys could employ 18 Chinese labourers for the price of one Western Bay of Plenty worker.

The firm said it would shed half of its 65 workers by the end of August and make the rest redundant before Christmas.

The firm is part of a global group that makes electrical parts for ovens and bench-top stoves. It has been operating at the Mount for nearly 30 years under a string of different owners.

Only a highly skilled design team of seven would remain in the Western Bay to develop new electrical products for the multi-national parent, which has branches around the world.

An employment consultant who was present said the staff were shocked and stunned. The plant's longest-serving employee had been there 27 years.

Invensys dominates the New Zealand and Australian market, mainly supplying Fisher and Paykel and Electrolux.

Its Asia-Pacific managing director, John Douyere, travelled from Sydney to break the news. He said the electrical parts had to be made cheaper or Invensys could lose its contracts.

Most staff being laid off worked on the factory floor, assembling the thermostats and power regulators.

Supervisor Dot Gallon said many staff cried yesterday when told they would lose their jobs. Many could not afford to be made redundant as some had just taken out new mortgages, were the sole breadwinners, or had school-aged children to support.

Mr Douyere said the huge difference in costs meant the company had no option but to move its manufacturing base for appliance controls to stay alive.

"We have no choice in order to protect our business," he said. "If we did not move we would have to shut down in nine months' time."

Chinese manufacturers had been putting pressure on New Zealand companies for at least 18 months. Several companies here and in Australia had already moved to China, Mr Douyere said.

The move is part of a pattern being repeated in other centres.

In May, Sunbeam said it would close its Palmerston North electric blanket factory, with the loss of 122 jobs, so the blankets could be made in China.

The outdoor manufacturer Macpac is hoping to return to profit this year after laying off 150 Christchurch staff in favour of cheap Asian labour.

Invensys cut costs 18 months ago in the hope of saving jobs, but Mr Douyere said the cutbacks were too small to match savings from cheaper Chinese workers.

The Mount Maunganui company earns $11 million a year for the Invensys group, whose head office is in England. The group has manufacturing plants in 60 countries.

Workplace consultant Charles Pene from Workplace Support has monitored staff satisfaction for more than four years and was with employees when they heard the bad news.

Mr Pene said some workers were already talking of banding together and starting their own business with redundancy payments.

Managers said all workers except those on casual contracts would get redundancy money.

Of the plant's 65 staff, 55 are factory workers. The other 10 are office staff and specialist toolmakers who design the tools to make the appliance parts.

Invensys was given an $86,000 Technology NZ grant to produce the world's smallest and smartest regulator, which controls the power flow in an oven.