Sixty-five staff at a Mt Maunganui electrical assembly factory will lose their jobs by Christmas as the work is transferred to China.
Workers at Invensys Appliance Controls were told that the firm could employ 18 Chinese labourers for the price of one Western Bay of Plenty worker.
The company said it would shed half of its 65 workers by the end of next month and make the rest redundant before Christmas.
The firm is part of a global group that makes electrical parts for ovens and benchtop 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 will remain in the Western Bay to develop new electrical products for the multi-national parent, which has branches worldwide.
An employment consultant who was present when staff were told of the move said they were shocked.
The plant's longest-serving employee had been there 27 years.
Invensys dominates the New Zealand and Australian market, mainly supplying Fisher & 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 work on the factory floor, assembling the thermostats and power regulators.
Supervisor Dot Gallon said many staff cried when told they would lose their jobs. Some had just taken out 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.
"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 firms here and in Australia had already moved to China, Mr Douyere said.
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 Mt 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 said some workers were already talking of banding together and starting their own business with redundancy payments.
Made in China
* Cheap labour is encouraging NZ firms to shift operations to mainland China.
* 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.
* Outdoor gear manufacturer Macpac hopes to return to profit this year after laying off 150 Christchurch staff in favour of cheap Asian labour.
- NZPA
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