KEY POINTS:
Prime Minister Helen Clark says the closure of a Fisher & Paykel plant in Auckland is the "way of the world" and that the future of manufacturing in New Zealand lies in design, research development and niche products.
Kiwi whiteware maker Fisher & Paykel announced last week it was moving production of its washing machines and clothes dryers to Thailand, at the cost of 350 jobs in the next year.
The company said many of its competitors were already making machines in low-cost Asian countries. It expects the move will deliver annual benefits of $10 -$15 million.
Clark said yesterday: "It's the way of the world... For a long time, processing work like the type Fisher & Paykel does has been migrating from western centres to low-cost centres...
"The key for [New Zealand] is where the company is based, and where the high-value design R&D work is done, where it's branded, where the export revenue comes."
The F&P news triggered a warning from Sleepyhead that manufacturers were being squeezed out of New Zealand by interest-rate hikes and the high dollar. It said others would be forced to move offshore if conditions didn't improve.
Clark said: "That's a business decision for them."
The Green Party and the Engineering, Printing and Manufacturing Union both say the Government's sole reliance on the official cash rate as a brake on inflation is hurting exporters.
Clark yesterday conceded the official cash rate was a "blunt instrument".
But she said there was no cross-party consensus on workable alternatives.
She also dismissed suggestions Government spending was driving the dollar upward.
