Tatung to move lines to China

Tatung Co (大同), a leading home appliances maker in Taiwan, said on Saturday that it planned to relocate most of its local production lines to China and Vietnam to reduce costs amid stiff competition.

"In order to expand market share and boost competition, Tatung is starting to integrate its capacity around the world and to adjust its workforce," Tatung said in a statement filed to the Taiwan Stock Exchange late on Saturday.

The plan includes moving the production line for large home appliances such as refrigerators and compressors to Vietnam and China, it said.

Tatung's board approved the company's plan to invest another US$8 million in its Vietnam affiliate in November.

The company said 389 of its employees would be affected as it planned to streamline a local factory in Tucheng (土城), Taipei County.

That would mean a reduction of approximately 64 percent of the Tucheng factory's workforce of 600.

The staff adjustment would be completed by the end of March, the home appliances maker said.

Affected workers can apply for 200 positions offered by Tatung to work at the company's affiliates, the company statement said.

The 89-year-old home appliances manufacturer said the job adjustment would not adversely impact its operation and bottom line as it had alloted sufficient funds for retirement packages and severance pay.

Tatung said it would retain its headquarters, research and development centers, financial department and its domestic workforce for small home appliances.

Tatung said that losses narrowed to NT$3.64 billion (US$111 million) in the first three quarters of last year, compared to NT$4.21 billion in losses during the same period in 2005.

Shares of Tatung declined 12 percent to Friday's closing price of NT$13.2 since the beginning of the year, underperforming the benchmark TAIEX's 1.47 percent loss.

Separately, Tatung dismissed a report in the Chinese-language Apple Daily on Saturday that the company had embezzled NT$720 million from an employee welfare fund.

The report cited a representative of the company's labor union.

The statement said that the fund was under the supervision of an independent committee and that two-thirds of the committee members were employees of Tatung, while only one-third were management.

"The fund is not under Tatung's control," the company said, adding that it may pursue legal action against the Apply Daily and the representative cited in the article.