KEY POINTS:
In another blow to Christchurch and New Zealand manufacturing, Dynamic Controls today announced it was moving 200 jobs to China.
But unlike other manufacturers, who have recently announced plans to move New Zealand-based manufacturing operations to Asia, Dynamic did not blame the high value of the NZ dollar or government policies.
Over the next 18 months Dynamic will relocate the manufacture of its electronic controls for power wheelchairs and scooters to China.
However, it said its contract manufacturing business would remain in Christchurch -- leaving the company, owned by US company Invacare, with around 130 staff in Christchurch.
The decision comes on top of large lay-off announcements from three large Christchurch manufacturers -- GL Bowron, Click Clack and Whisper Gen last month.
Two large Auckland manufacturers, Fisher & Paykel Appliances and Sleepyhead also announced plans to relocate to Asia. Most of the five laid heavy blame on the high New Zealand dollar.
Dynamic's acting chief executive Charlotte Walshe said the decision to move to China was primarily based on the need to shorten the supply chain and cut costs.
The high New Zealand dollar played only a small part in the decision and the move was not down to Government policies or local labour costs, she said. Most suppliers and customers were in Asia and shortening the supply chain would reduce costs.
"Moving our manufacturing operation to China means we will be more responsive to customer demands and therefore more competitive."
Its global research and development centre and contract manufacturing unit would remain in Christchurch.
The Canterbury Manufacturers' Association (CMA) said the decision was another blow for the economy, and particularly for Canterbury.
"Dynamic Controls' announcement is the latest in a growing list of firms that are either relocating offshore or cutting staff numbers," said CMA chief executive John Walley.
"It is no longer cost effective for these firms to retain large-scale production facilities and employee bases in New Zealand, and relocating production makes sense under current conditions."
"Unfortunately, New Zealand is rapidly losing that which would not have been lost had policy settings been different."
Mr Walley said the hollowing out of companies such as Dynamic Controls had a cumulative effect with less call for local test laboratories, component and service suppliers and the like.
"The loss of high tech, niche, innovative workplace skills and knowledge damages our collective capability to respond to future challenges and opportunities.
"Once lost, this capability is unlikely to be recovered."
He said the Government was urging manufacturers and exporters to be innovative, high-tech, productive and develop niche products and markets.
"Dynamic Controls was all of these things and they could not sustain operations in New Zealand with an overvalued currency.
"The company was cutting edge and world class on all of these dimensions but even with best practice everywhere they could not win in the environment created by our policy settings."
The failure of the Government to address domestic inflation was killing New Zealand's ability for manufacturing and exporting, he said.
"How many more companies and jobs do we have to lose before policy makers decide to rebalance the economy? When will enough, be enough?"
Dynamic said its contract manufacturing accounted for over a quarter of its business and it was expected to grow that by 20 per cent in the next two to three years.
The relocation of the mobility control manufacturing to China would happen gradually with initial production starting in four months at purpose-built facilities in Suzhou, outside Shanghai.
Ms Walshe said there were unlikely to be any immediate redundancies and the company was providing counselling, outplacement support and assistance for staff.
- NZPA
