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Air conditioner maker Tadiran Appliances, a fully-owned subsidiary of U.S. giant Carrier, is considering closing its Afula factory and moving production to China. The Israeli plant employs 350 people.

Management has told its employees of the possibility, but no final decision has been made.

"We are considering alternatives for production, and when we decide we will inform all the relevant bodies," Tadiran said.

A senior company executive said on Thursday that all worldwide production of consumer products is moving to China due to the low costs and size of the market.

"Eighty percent of international activity is moving to China. We have fought to keep the factory in Israel, but the global crisis makes that very difficult," the executive said. As the real estate industry collapsed, so has the air-conditioning business, which is closely tied to demand for homes, he added.

In addition to Tadiran's manufacturing business in Afula, the firm has marketing, sales and customer-service operations in Israel. These businesses will not be affected and may even expand.

The Histadrut labor federation is working to keep the factory open, but said "it would be difficult, if not impossible" to keep it from closing. Histadrut representatives said Tadiran is different from other companies recently in the headlines for closing plants such as Off Haemek and Vita Pri Galil, where the unions were able to help employees keep their jobs.

"Vita Pri Galil and Off Haemek were Israeli factories that collapsed, and all that was needed was to find other investors to buy them and provide funds," the Histadrut said.

"Tadiran Carrier is owned by an American company that owns similar factories in a long list of countries around the world. The company decided to transfer its manufacturing to China to reduce labor costs to almost nothing, without binding labor laws, without generous social benefits and without pension contributions."