Swedish whitegoods manufacturer Electrolux has announced it will close its refrigerator plant in the NSW town of Orange by 2016, putting more than 500 people out of a job.
The announcement comes less than two weeks after federal Industry Minister Ian Macfarlane visited the factory. It is believed Mr Macfarlane had urged the company to delay its decision until December to give the government time to consider providing help.
The board of Electrolux met in Stockholm on Thursday and decided to close the plant, which injects tens of millions of dollars into the local economy each year.
After more than 70 years, the plant will wind down in the final quarter of 2015, before closing in 2016. The plant employs 544 people, but is believed to create employment for hundreds more.
The refrigerator plant has been under the microscope since February, when Electrolux announced a six-month investment study to see if Orange was globally competitive enough to make a new range of refrigerators and freezers.
John Brown, managing director of Electrolux Home Products Australia and New Zealand, said the company understood the sensitivity of its decision, but its investment study concluded it could make refrigerators cheaper in other factories in Asia and eastern Europe.
He said the company had spoken to all levels of government before reaching its decision. "In the end a compelling business case could not be made for investing the necessary funds to upgrade the Orange plant for the company's future manufacturing needs in the Asia-Pacific region," Dr Brown said.
Mr Macfarlane said he was disappointed by Electrolux's decision and appreciates "this is a difficult time for affected workers" whose commitment he had seen first-hand on his visit to the factory.
"The Coalition government believes there is a future for manufacturing in Australia," he said. "The government is already acting to address some of the key issues, including energy costs, by releasing legislation to repeal the carbon tax.
"The government will continue to consult with industry representatives in a methodical way to work on a sustainable, long-term future for the sector in Australia."
State MP for Orange Andrew Gee said he was disappointed with Electrolux's decision to produce its Australian fridges in Thailand. "This is one of the saddest and darkest days in Orange's history," he said. "It comes down to the fact that our market here is small and Electrolux can make greater profits in Thailand, where labour is $2.50 per hour, compared with $25 to $30 in Australia.
"Electrolux is a foreign company and it has no particular allegiance to Australia. It's all about money.
"The Australian team at Electrolux did absolutely everything it could, but this was a decision made in Europe. The board should rethink this flawed decision."