More than 500 people working at the Electrolux manufacturing plant in Orange, NSW stand to lose their jobs after the company’s board in Sweden decided to close down the plant by 2016.
After months of speculation and hoping that the refrigerator manufacturer remains in Australia, the board has chosen to concentrate production to the major appliances plant in Rayong, Thailand. The announcement came along with the company reporting lower third-quarter profit due to the weakening European demand and negative currency impacts.
“The difficult measures announced today combined with our strategic focus on growth in emerging markets and increased consumer relevant product innovations make us convinced that Electrolux is well positioned to meet and exceed our long-term key financial targets,” said President and CEO Keith McLoughlin, quoted in a NASDAQ report.
According to a report on Sydney Morning Herald, John Brown, managing director of Electrolux Home Products Australia and New Zealand said the company had spoken to all levels of government before reaching its decision. Mr. Brown said Electrolux understood how sensitive the decision is, but their six-month investment study has found that the company can manufacture refrigerators more cheaply in other factories in Asia and Eastern Europe.
The announcement of the Orange plant’s closure caps off a difficult fortnight for manufacturing jobs in the Central West after Downer EDI announced that its rail manufacturing plant will be closed and more than 100 food manufacturing jobs will be cut from Simplot at Bathurst.
Industry Minister Ian Macfarlane said he was disappointed by Electrolux’s decision to close its factory and acknowledged that it is a difficult time for affected workers.
Mr. Macfarlane vowed to act over the closure and said in a statement that the Coalition government still believes there is a future for manufacturing in Australia.
“The government will continue to consult with industry representatives in a methodical way to work on a sustainable, long-term future for the sector in Australia,” the Minister said in an AAP report.
He pointed out that the industry is dealing with several challenges and that the government is already acting on the key issues such as energy costs by releasing legislation to repeal the carbon tax.
Meanwhile the Australian Manufacturing Workers’ Union said Mr. Macfarlane should take a trip to Stockholm to secure the Electrolux jobs.
“Saving these jobs and saving this manufacturing capacity should be the number one priority for the Industry Minister right now,” said AMWU NSW Secretary Tim Ayres.
“The time to act is right now – Mr Macfarlane should be in Sweden next week making the case for the world class workforce and production capacity Orange has to offer.”
“For the sake of the five hundred workers and their families whose livelihoods depend on Electrolux, I hope Mr Macfarlane steps up to the plate.”