7 Nov 2012

Rakon blames job cuts on high dollar

6:13 am on 7 November 2012

Rakon plans to cut up to 60 jobs in Auckland as part of plans to shift production to China, blaming the high New Zealand dollar.

The electronics company says some its crystal manufacturing output, which is used in mobile phones, can be made cheaper at its plant in Chengdu.

Investors have been unhappy since Rakon reported its second annual loss in three years in May,

Its shares slumped to a low of 38 cents in August this year, but after Tuesday's announcement they rose 10%, or 4 cents, to 45c each.

Managing director Brent Robinson says 60 of the 430 jobs at Rakon will go by early next year, but research and product development will remain in New Zealand.

Mr Robinson says the move will help Rakon take advantage of a global growth in demand for smart wireless devices and save $10 million a year with 70% of that happening by April 2013.

But a union says Rakon's decision to move some production to China is a sign that the crisis in manufacturing is deepening.

Lousia Jones, from the Engineering, Printing & Manufacturing Union, says the New Zealand Government is refusing to act to protect manufacturing jobs.

New Zealand now has 40,000 fewer manufacturing jobs than it did in 2008, she says.