Fischer and Paykel – Victim or Villain

With the recent proposed closure of their Brisbane plant, Fischer Paykel are most likely being frowned upon whereas they may in fact be the first victim of the recent wage rise allocated in what can only be described as ‘tough times’.

In my opinion it puts light on the fact that pay increases MUST be linked to either productivity gains or improved profits, not just because someone feels the workers need a boost.

With some 300 workers involved, which, when calculated amounts to in excess of $400,000 per year from an already suffering bottom line, perhaps this is the first of many such cases on the pipe line because of what may well of been an un-warranted wage rise.

I sure hope the ‘do-gooders’ that lobbied for this rise have a contingency plan for the people whose jobs may well be in jeopardy.

To be honest, I reckon it has more to do with lousy management and poor quality, if my own experience is any guide. I used to be a dyed-in-the-wool F&P buyer with a houseful of their gear, which the missus got when she shot through. When it came time to get new gear, i went the F&P route again, buying a washing machine and a fridge. The fridge lasted only a month before the first plastic door shelves started breaking and only 24 months in total, at which time it was cheaper to replace it (with a decent Westinghouse this time). F&P were happy to keep supplying me with shelves at $20 or so a throw, but the dud compressor was the clincher. Likewise with the washing machine. 2 replacement solenoid valves so far and more expected, along with one (very expensive) mylar control panel. The solenoid valve is a known corrosion problem with these machines, apparently. It'll be going soon in favour of the mate's 15 year old whirlpool, which they've just updated.

If F&P were producing decent gear, they'd be in business, simple. not the workers' fault, either, it's down to lousy design or poor materials.

"In my opinion it puts light on the fact that pay increases MUST be linked to either productivity gains or improved profits, not just because someone feels the workers need a boost."

Losses have more as much to do with the poor strtegic decisions as with poor productiving, e.g., expanding too quickly moving outside core expertise. Circa 1990 lost Westpac six billion dollars lending toWA entrepreneurs and others at top-end of town with Board breaking Westpac's Credit And Risk Assessment guidelines.

When the small shareholders complained about Sir Eric Neal et al and moved a vote of no confidence in the Board, a Board member having the proxies of the AMP Society outvoted every one on the floor.

Perhaps the behaviour of Boards needs closer scrunity. Where directors st*ff-up, maybe share splits should be used, so government canre-sell the devaluated shares to the Public. The existing shareholders losses are the penalty they pay for having voting the wrong directors or giving proxies to institutions.

If F&P were producing decent gear, they'd be in business, simple. not the workers' fault, either, it's down to lousy design or poor materials.

I think you are missing the point, they are not going broke, nor are they going out of business. They are simply out-sourcing their labour citing 'increased labour costs' as their reasoning.

You see as I said in my previous post, 'awarding a pay increase just because people are struggling may well be flirting with danger'.

Well it looks like I may have been right. Only time will tell but I fear this is the first of many because businesses, of any size, can't simply grant a pay rise without justification. Businesses must be profitable or why have millions of dollars tied up for the sake of 'jobs creation'.

As for the quality of their goods, well they are simply supplying a product of a certain quality to a certain market.

The problem is that many consumers pay peanuts then bag the manufaturer because they wanted the 'benz' but paid for the 'mini'.

Sorry, can't have it both ways!

The choices are these;we either raise tarrifs or decrease wages.We cannot have it both ways.This is the price of Globalisation.Why do so many try to evade the real issues?

rehctub please! you and your threads have always had interest for me.
But you fail to understand the issue of industrial relations.
Minimum wages was raised and you started a thread about its impacts.
Those on minimum wages, who got that increase are not these workers, not one of them.
These folk work on an EBA such agreements always yes every time, include productivity increases and mostly measures such as KPI,s key performance indicators to insure more productivity comes.
Better quality less injury's, all targets for increased wages EBAs get more bang for the buck.
Now the race away from manufacturing in our country and New Zealand is fueled by cheaper , very much so wages in Asia.
To ask us to work for that money is to ask some to starve while others prosper.
In time we will have to confront the fact we already do just that.
No suffering for FP we will buy cheap washing machines like every thing Asia sells us and not blink when asked to think about jobs.