Carrier Corporation unit Tadiran Appliances Ltd. is closing down its Afula air conditioner factory, the latest of 40 factory closures worldwide by Carrier as it moves production to China. The Afula factory will be shuttered by the end of the year and 200 of the company's 350 employees will be fired.
Most of the Tadiran Carrier factory's workers are over 50, and they will likely find it difficult to find new jobs, particularly in the Galilee and especially in the current economic climate. The company's service and marketing staff will keep their jobs
Although the workers are unionized in the Histadrut (General Federation of Labor in Israel), that will not help them oppose the factory closing. Except for obtaining increased severance compensation, the Histadrut can do little to prevent a US company from closing an Israeli factory.
A union official told "Globes" today, "It's impossible to fight globalization with the tools of labor relations. Globalization has to be fought through education, investment in jobs training, and development of the periphery. We cannot compete against the Chinese in low technology manufacturing. That is why the government must formulate a clear policy to reduce the gaps between the center of the country and the periphery."
Histadrut Jezreel Valley Division chairman Zeev Lieberman said that there was little to fight about. "To tell you the truth, if I was the owner, I'd also move production to China, even though the factory is still profitable. Production costs are half as much over there, which adds millions to the profits. Regrettably, this is the last air conditioning factory in Israel, and just as Israel's textiles industry is finished, this industry too is now over." He added that Histadrut was in contact with the company's management to obtain improved severance terms for the employees, including possible early retirement.
The Tadiran Carrier factory is one the two large factories for household air conditioners. The other factory is owned by Electra Consumer Products Ltd. Pereg Industry Ltd. manufactures coolers at its factory in Jerusalem, and Unique Engineering Ltd. manufactures industrial air conditioners at its factory in the Sharon.
Manufacturers Association of Israel Metal, Electrical and Infrastructure Industries Association chairman Yehuda Heiman notes that a third of Tadiran Appliance's production is exported to Western Europe and that the factory was considered efficient. The problem is the strong shekel, which results in loss-making production. He added that air conditioner purchases in Europe have been halved as a result of the economic crisis.
Published by Globes [online], Israel business news - www.globes-online.com - on August 6, 2009
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