Fisher & Paykel to pay $20/hour to US workers

By Kent Atkinson

New Zealand appliance manufacturer Fisher & Paykel Appliances says it will pay American workers US$14 ($20) an hour to build its washing machines in Clyde, Ohio.

It has started job interviews and plans to fly the American workers to Auckland and Australia in November and December to be trained on the company's existing production lines, the Toledo Blade newspaper in Ohio reports.

New Zealand staff doing similar work are paid "just under $15 a hour" said a company spokesman, who emphasised the production shift was for better transportation economics, rather than labour costs.

In July, the company announced it would be relocating its Smart Drive washing machine line, currently located in Cleveland, Australia, and a motor manufacturing line, located in Auckland, to a North American site.

Fisher & Paykel chief executive John Bongard said Clyde had skilled workers and the state was the most central location for shipping products to US and Canadian markets.

He told the Toledo Blade that by next March the company will have hired 128 Americans, after rejecting a site in Mexico with much lower labour costs, and places such as California.

"Labour costs in Mexico are very low and attractive, but the bottom line for us was we had to weigh the lower labour costs in Mexico versus the cheaper logistics facing us in Ohio," he said.

"While California is a pretty good place to be, the freight costs of getting product to the east coast and to the central region is pretty high," said Mr Bongard.

Fisher & Paykel already has a plant in Huntington Beach, California which makes stoves and barbecues.

"Our labour costs here (in Ohio) are proportionately lower than moving our product costs around to our customers."

The US$31 million ($45.68 million) project is on a fast track. It will lease a 6967sq/m warehouse in Clyde.

The site is owned by a private investment group, KM/H Ventures. If more production space was needed, more land was available, local officials said.

The plant's annual payroll will be about US$4.1 million ($6 million), and jobs will pay about US$14 ($20) an hour.

The company is being paid state tax incentives worth US$355,452 ($523,879) for the project.

Equipment will be moved into the factory in February, and production is to begin in March.

Fisher & Paykel's goal is to establish a US manufacturing base over two years. Its biggest market is Australia, but it hopes that by next year the US will take pole position: the company sold 254,000 units in the US in 2004.

Mr Bongard said the selection of Clyde was helped by the presence of Whirlpool Corp, which has a large factory that makes washing machines.

Fisher & Paykel supplies components to Whirlpool and distributes Whirlpool products in New Zealand.

The area had available workers who possess the skills that Fisher & Paykel wanted, he said.

"What's important to us is not just the price of labour, it's the quality of labour," Mr Bongard said.

The area around Clyde, Sandusky County, had 1900 unemployed and a 5.5 per cent jobless rate last month.

Besides its Dynamic Cooking Systems plant in California, Fisher and Paykel has warehouses in Dallas; Chicago; Charlotte, North Carolina; Orlando, Florida; and Vancouver, Canada.

- NZPA