Dynamic Controls to shed up to 60 Christchurch jobs

Dynamic Controls, which designs and makes controls for powered wheelchairs, is to wind down its contract manufacturing business in Christchurch in a move the EPMU union says could result in up to 60 job losses.

The company is owned by US-based Invacare Corp and had sales of about $90 million last year. Actual jobs losses cannot be confirmed yet as some workers may transfer to the company's Medical Mobility division, chief executive Charlotte Walshe says in a statement.

"The impact of changes in global economic conditions over the last 9-12 months have been significant for our contract manufacturing business, to the point where it is no longer profitable," she says. "We believe these conditions are unlikely to improve in the foreseeable future."

She confirmed that 40 to 60 jobs would be lost, though the work is likely to be picked up by other manufacturers in Christchurch.

Dynamic Controls is ultimately owned by NYSE-listed Invacare, which last month posted quarterly results that included a pretax loss of $US2 million for the Asia-Pacific region. Much of that is because of "a significant reduction in net sales volumes" in its Australian distribution business, it says.

The decline in the company's subsidiary making microprocessor controllers "was primarily related to its contract manufacturing business for companies outside of the healthcare industry," says Invacare, which acquired Dynamic Controls in 1993.

Dynamic Controls shifted its own manufacturing to China in 2007 while retaining the contract manufacturing unit in Christchurch. Design and R&D work is still done in the city, where the company employs 200 of its 400 staff globally.

The EPMU, which represents workers at the Christchurch plant, says the announcement is a blow to the manufacturing sector after Rakon this week said it would cut 60 jobs and relocate the work to China.

The union says 40,000 manufacturing jobs have been lost to New Zealand since 2008.

Invacare stock last traded down 1.9% to $US14.07 on the NYSE and has shed about a third of its value in the past year. It is rated a "buy" based on two recommendations compiled by Reuters, with a price target of US$18.

(BusinessDesk)

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