Relocating can be tough transition

In April 2008, hundreds of workers walked away from Fisher & Paykel Appliances' Mosgiel factory to ponder their fate after the company informed them their jobs would be phased out the following year.

There were shockwaves through the country as the future of manufacturing in New Zealand came into doubt.

"It's appalling. I really didn't think it would happen. Everyone is pretty gutted," Mosgiel Fisher & Paykel worker Chris Chambers told the Otago Daily Times following the announcement.

Fisher & Paykel Appliances is a lion of New Zealand manufacturing. With a history stretching back to the 1930s, it hurt the Kiwi psyche to see it close an operation down and send work to Thailand, Mexico and Italy.

The move was not plain sailing for the company. Stuart Broadhurst, chief executive of Fisher & Paykel Appliances, says the investment required for the reorganisation of the company's global strategy was a contributing factor to the "turmoil" the whiteware maker experienced last year.

That turmoil saw the company racking up debts worth more than half a billion dollars and, subsequently, being slapped with a debt repayment regime by its banks.

First NZ Capital analyst Greg Main says the situation in the Thai plant now appears positive: "So hopefully we'll start to see the benefit of that coming through in the financials." But Main says things don't seem to be going so well in Mexico. "The main area of concern is that Mexico plant," he says.

Main says appliance sales in the US have been weak ever since the company started production at the Mexican site, due to the impact of the recession.

"Whether they are making money on the plant or not I guess would be questionable."

He says the company needs to improve its sales footprint in the US, but adds "there's every chance that should happen".