TWO hundred workers at the Electrolux fridge factory in Orange will be out of work by the end of the year, following the announcement yesterday of a major restructure.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
General manager of the Orange factory, Scott Ostini, said the company would shut its small refrigerator manufacturing plant and outsource more production work.
The decision, which affects 20 per cent of the company's total workforce in Orange, will have a major impact on the local economy. (See report Page 3).
Plant workers, union representatives and the city's civic leaders have all expressed concern and disappointment at the decision, which Mr Ostini said was made on Wednesday night. (See report Page 3).
Mr Ostini said the future of Orange's small refrigerator plant, which was opened in 1985 to make bar fridges and chest freezers, had been in doubt for several years.
Electrolux would now import equivalent products from China and Thailand for sale on the domestic market, he said.
The affected workers were told of the company's decision yesterday morning, just prior to a press conference for the local media.
Mr Ostini said the company would make every effort to minimise the impact on workers, by providing them with "out placement" services including financial advice and job search skills training.
All affected workers would receive their full entitlements and redundancy payments, he said.
Jobs will be shed over six months, beginning in June.
However, Mr Ostini yesterday stressed that Electrolux was committed to the future of the Orange plant.
He said it would invest a further $14.2 million in the plant, to enable it "to focus on producing world-class large refrigerator and freezer models".
"The new investment we are announcing today brings to a total of $65 million that has been invested in this plant since Electrolux bought it just over three years ago," he said.
"So why commit $65 million in Orange? It is because Electrolux believes that despite the challenges of converting a 58-year-old factory into a modern assembly plant, refrigerator manufacturing in Orange has a good future.
"Let me reinforce that - Electrolux believes refrigerator manufacturing in Orange has a good future."
He said the company had identified a competitive edge for it in producing "large, high-value, high quality, fully-featured refrigerators" locally.
"It is by producing large products that the Orange plant has a competitive advantage and can maintain market leadership," he said.
"We have competitive advantage in the large products, where we have the expertise in frost-free manufacture and we have really innovative products so we can provide our customers with value for money."
Mr Ostini said he wanted to assure the local community that the future of the Orange plant was secure and that "those employees who are affected will be looked after".
THE loss of 200 jobs from the Orange Electrolux plant could actually cause as many as 300 more jobs to disappear from the local economy, through what economists call "the multiplier" or flow-on effect.
Tom Murphy, an economist and director of the Bathurst-based Western Research Institute, said yesterday economic models developed by the institute suggested as many as 500 jobs would ultimately be lost in the Orange economy as a result of yesterday's decision.
It could take as long as 12 months for the flow-on effects to be fully felt, he said.
However, the impact would only be this great if the affected workers were unable to find other jobs, he said.
The decision could increase the city's unemployment rate by as much as three percent, from about 5 per cent to 8 per cent.
The multiplier effect occurs when the loss of one job impacts directly and indirectly on other jobs and services. The effect continues on through the economy.
