Dyson to move to Far East

Two months ago the Queen visited the Dyson factory in Malmesbury

Dyson, the UK company which pioneered the "bagless" vacuum cleaner, is set to move its manufacturing to the Far East with the loss of about 800 jobs.

A final decision has yet to be made, and staff consultation still has to take place.

It's been an agonising decision and very much a change of mind

James Dyson

But company founder James Dyson left little room for doubt that barring exceptional circumstances the move will take place.

"I don't think I can (see an alternative)," he told BBC News Online. "It's been an agonising decision and very much a change of mind."

Points east

But the chance of much lower manufacturing costs in the Far East is clinching it - as well as the prospect of being much closer both to suppliers and new markets.

Costs

UK worker: £9 per hour

Malaysian worker: £3 per hour

UK office rent: £114 sq m a year

Malaysia office rent: £38 sq m a year

Source: Economist Intelligence Unit and BBC

"Increasingly in the past two to three years our suppliers are Far East based and not over here," he said.

"And our markets are there too. We're the best selling vacuum cleaner in Australia and New Zealand, we're doing well in Japan and we're about to enter the US. And we see other Far Eastern countries as big markets as well."

Although Dyson already has a plant in Malaysia, other countries - including China - are being seen as possible sites.

How is the local economy expected to soak up these redundancies?

TUC Secretary General John Monks

Mr Dyson has long been a strong proponent of the euro, and has previously threatened to shift manufacturing overseas if the UK does not clarify its position on the single currency.

That, he said was only one factor here.

Trade unions said a decision to shift Dyson manufacturing away from the company's base in Malmesbury, Wiltshire, would hit the local economy hard.

"Malmesbury is a small market town and Dyson is the only major manufacturer in the area. How is the local economy expected to soak up these redundancies?" said John Monks, General Secretary of the Trades Union Congress.

Mr Monks added that a European Union directive obliging employers to consult their workforces over possible lay-offs, now going through the final stage of the EU legislative process, " will stop the Dysons of tomorrow making mass redundancies with no warning."

R&D stays

Whatever decision is made, research and development will remain at the firm's base in Malmesbury, Wiltshire, which has received £32m of investment in the past two years.

That makes Dyson products still "British-engineered", Mr Dyson said.

The firm will also continue to make washing machines in the UK, he said, and at least 1,000 staff will still be working there.

The money saved will be reinvested, Mr Dyson said.

"Remember we're a private company, so in order to invest we need a lot of cash. We want to stay a private company, and we're staying here in Malmesbury."