Fisher & Paykel loses 50 more jobs

Photo / Richard Robinson

Overseas moves and a nine-day fortnight have not been enough to stop whiteware manufacturer Fisher & Paykel Appliances axing more staff.

The business yesterday said about 50 people would be leaving its
New Zealand and Mexican offices in the next few months and blamed the global economic downturn.

But Fisher & Paykel appears to have had its $80 million funding lifeline extended for two months.

Paul Brockett, vice-president of investor relations, said yesterday the business deeply regretted the staff cuts but found it unavoidable because of the international credit crunch.

He also explained that Fisher & Paykel had until June 30 to negotiate new funding facilities and the company would not be forced to sort this out by the end of next week - the deadline previously announced in its NZX notice on its funding issues.

Last month, Fisher & Paykel saved 60 jobs by negotiating a nine-day fortnight for its Auckland refrigeration assembly workforce.

Under the agreement, the 35-hour work week would be supplemented with an additional 3.5 hours' pay made up from the Government's nine-day working fortnight scheme and an equivalent company contribution.

Prime Minister John Key said that under the scheme, the jobs of 350 workers at Fisher & Paykel's Auckland factory were guaranteed for the next six months.

Brockett said yesterday the poor international scene had forced layoffs in other areas of the company.

"We're downsizing our engineering staff globally. There will be about 50 people let go," he said in response to Herald inquiries.

Laying off staff now did not conflict with the nine-day working week agreement because the cuts were being made in completely different divisions of the business, he said.

Six to nine people would leave Fisher & Paykel's Mosgiel engineering design and dishwasher businesses, he said. About 20 people would leave the East Tamaki refrigeration and laundry businesses in Auckland.

About 30 people would leave Fisher & Paykel's Mexican refrigeration, dishwasher and cooking businesses, he said.

Brockett stressed that only about half the layoffs were pure redundancies and Fisher & Paykel had found other ways to downsize its staff without laying off all the 50 people.

"It's a combination of redundancies, attrition rates and retirements. Some people are going overseas, some are retiring but just over half the people will be made redundant."

The redundancies would be almost immediate but other people would leave Fisher & Paykel between now and next March, he said.

"We're just realigning staffing levels according to global demand. We're no different to any other country.

"It's tough times. It's unfortunate but the way it is at the moment, these jobs are not being farmed out offshore," he said.

Earlier this month, Fisher & Paykel cited cheap Thai labour for its decision to lay off 340 Australian workers at a refrigerator factory in Queensland which built 120,000 fridges a year.

Fisher & Paykel has emphasised that people are the key to its success, saying it "created a culture where people and innovation can flourish".

The appliance giant, whose shares yesterday closed unchanged at 44c, last month secured an $80 million lifeline.

But Brockett stressed yesterday that the company did not have a repayment deadline of next Thursday as some people had thought.

"April 30 is not the drop-dead date. We said the funding facility had to be repaid by April 30 or at a later date which is by June 30," he said.

Asked about negotiations on this loan, Brockett said Fisher & Paykel was "still working with the banks" and would not comment further.

The $80 million came from a syndicate of six banks led by the ANZ and BNZ.

F&P'S TROUBLES

* Hit by rising costs and global slump.
* Sales in the United States declining.
* June repayment deadline for $80m of funding.
* 430 jobs lost as Mosgiel factory closes and manufacturing moves to Thailand, Italy and Mexico.