The news was released yesterday that Contact Energy is looking at outsourcing its retail processing positions based in Lower Hutt with the possible lose of 70 jobs.
Contact Energy is in talks with staff over the potential outsourcing of around 70 jobs to India.
Consultation began yesterday over plans to outsource the work to India-based technology company Wipro Technologies as Contact sought to upgrade its retail processing software, corporate communications manager Jonathan Hill said.
Mr Hill said the proposed outsourcing was part of “a significant transformation of its business processes”, including changes to Contact’s retail billing systems.
The jobs in question were retail processing positions at its Lower Hutt branch, where around 200 people were employed.
Consultation began yesterday and they had put a proposal to staff. No decisions had been made, he said.
It appears that the cost of business in becoming harder and harder for NZ busineses service industries to compete against significantly lower labour costs in other parts of the world. Being a listed company, shareholders expect maximum returns, and in the current environment that generally means a cost reduction model, versus a growth strategy.
The impact is where these jobs are based, and unfortunately that is the Hutt Valley. Recent examples in the Hutt have been more about manufactors with Unilever, Formway and Mountain Buggy making approximately 120 people between the three companies redundant earlier this year.
The ongoing significance of these job losses or changes in operations have significant impacts on local communities and the people involved. The Hutt Valley has experienced significant changes in the businesses that exist here over the years, but it seems that increasingly we, that is New Zealand, cannot compete in areas where labour costs offshore are what we expect to earn in a day what others earn in a month
NZI Business this morning played an item on Mountain Buggy and its production moving offshore.
Unfortunately as our earlier reports have mentioned, it is exceedingly difficult for local manufacturers to compete against their business opponents if they are manufacturing offshore, especially in China.
Wages rates in China are the equivalent of about $100 US per month, and unattainable wage rate in NZ. Akin to nearly all manufacturers, including the new owners Phil & Teds, intellectual property is retained in New Zealand and production is moved overseas, generally to a lower cost base.
Further evidence that the economy is not as strong as the media is portraying, in fact in the surrounding weeks there have been mixed signs as to where NZ economy is currently at. This announcement comes on top of Unilever another local Petone based manufacturing business making 50 redundancies last week, again unable to compete with offshore wage rates offered by China.
“Mountain Buggy” a baby buggy manufacturer will shift manufacturing to China with about 45 jobs to go at its Seaview Lower Hutt plant.
Mountain Buggy was picked up by its rival phil&teds after previous owners Tritec went into receivership in January (debts of about $22 million).
Phil&teds buggies are designed in Wellington but has them made in China to be sold around the world, hence the move.
Phil&teds owner Campbell Gower told the Dominion Post it was not possible to keep making Mountain Buggy products in New Zealand and production would shift to China at the beginning of next quarter.
“It was hard for the former owners to deal with the economic equation and it hasn’t been any easier for us,” he said.
The number of staff at the Lower Hutt factory had dropped from 100 in December to 61.
The shift will result in about 45 redundancies as some staff will be shifted to roles at phil&teds or Mountain Buggy’s seat-making business.
EPMU national secretary Andrew Little is understandable upset that these workers will not be receiving any redundancy compensation
Announced late today two Lower Hutt firms, laundry powder manufacturer Unilever will make 33 people redundant, while furniture maker Formway will shed 50 staff.
Formway chief executive Alan Buckner says the company, which opened in the 1950s, and recently won design award has decided to outsource its manufacturing and focus on design, sales and marketing.
Formway hopes 15 to 20 people will be offered jobs with the company it is outsourcing to but does see overall job losses.