Napier firm PDL Electronics will shed about 70 jobs as production of its motor components moves closer to its offshore markets.
It said yesterday that the country was too far from its main markets in North America, Asia and Europe, meaning it could no longer compete economically.
Production at the
Onekawa plant would be phased out until March next year.
It was hoped 20 of the 90 staff would be retained within the parent company, Schneider Toshiba Inverter, either in New Zealand or further afield.
Ten people would be kept on in Napier in after-sales and service support.
The 10-year-old company is regarded as a world leader in the development of AC motor drives, used in software and industrial applications such as elevators, winches, extruders and pumps.
It was bought by French-based Schneider Electric and Japanese conglomerate Toshiba in 2001. Staff numbers have dropped from 230 at the end of 2002 to 92 now.
Operations manager Martin Lynch said its variable-speed drives had since been superseded by superior Schneider products. But the idea that the company had been bought and removed from the market by a competitor was wrong.
"It's not at all a matter of buying out competitors, but developing further the strengths PDL has had and incorporating them into a new range of drives," said Lynch.
"And from a logistics point of view, it just doesn't make economic sense to manufacture here."
Customers would benefit, as drives produced overseas would be 15 to 20 per cent cheaper than if made here.
The manufacturing services manager at the Employers and Manufacturers Association, Bruce Goldsworthy, said the decision was typical of what was happening with relatively small companies.
"A lot of European and North American companies have trouble getting their heads around what's happening down here in the South Pacific, it's just so far away."
