Posted at 9:14am on 28 Apr 2007
The Engineering, Printing and Manufacturing Union says it will spearhead discussions to find ways of keeping local manufacturers in New Zealand.
It follows Fisher & Paykel's announcement on Thursday that it will shift its laundry factory to Thailand to save an estimated $10 million a year, with the loss of 350 jobs in Auckland.
Sleepyhead, the country's biggest bed manufacturer, is also considering moving its operations to China next year. It employs about 500 people in New Zealand. About 250 jobs are expected to be lost.
The union's national secretary, Andrew Little, says an urgent review of manufacturing policies is needed to prevent a mass exodus overseas.
Mr Little says he plans to assemble representatives from the business community, other unions and the Government to discuss incentives for manufacturers to stay in New Zealand.
Sleepyhead managing director Graeme Turner says high interest rates and a huge array of costs have led it to look at China as a manufacturing site. He says the only things that would keep Sleepyhead in New Zealand are a drop in interest rates and a change in government policy.
The Canterbury Manufacturers Association says it is the same situation for many manufacturers and warns that more will either leave or go under. Spokesman John Walley says manufacturers are being abandoned.
The Employers and Manufacturers Association says it makes sense for companies to move overseas because the business environment in New Zealand is not good.
Chief executive Alasdair Thompson says it is a mess for exporters trying to operate in the face of high taxes and other costs.
He says countries such as Thailand and China are offering manufacturers tax cuts and cheap land to help them to get started.
New Zealand 'unfriendly'
Fisher & Paykel Appliances says New Zealand is an unfriendly environment for manufacturers and the company cannot rule out further job losses.
Managing director John Bongard says it can no longer compete with its main competitors, which are already manufacturing in cheaper Asian markets. He says the booming property market is also not helping, and believes the whole economy is being punished for that one sector not being in line.
The Reserve Bank on Thursday raised the Official Cash Rate by 25 basis points to 7.75% - the second increase in the past six weeks. The rate is the highest in the industrialised world.
Mr Bongard says Fisher & Paykel cannot rule out further job losses and other parts are under review. He says the Thai government has offered tax breaks and help with training for engineers as the company moves its production there.
Fisher & Paykel was founded in 1934. Strict import restrictions led it to branch into making its own washing machines and refrigerators. The company boomed in World War II and went international in the 1960s.
Manukau mayor Barry Curtis believes workers set to lose their jobs at Fisher & Paykel's east Tamaki plant will easily find work elsewhere. He says "hundreds of jobs" are going spare in the district each month and it is unlikely that his constituents will be unemployed for long.
Clear sign - union
The EPMU says the move by Fisher & Paykel Appliances is a clear sign that something is seriously wrong and the Government must urgently review its manufacturing strategy.
The union says it understands the company's difficult decision and says the Government should stop relying on raising interest rates to control inflation and look at targeted policies that do not endanger the manufacturing sector.
Global trend, says Clark
The Government says it acknowledges the pain many exporters are feeling but says it has an economic strategy to help.
Prime Minister Helen Clark says there is still a place for manufacturing in New Zealand, despite some companies shifting their production overseas. She says what is happening in New Zealand is typical of many developed countries where manufacturers are moving their operations to low-cost countries.
Miss Clark acknowledges the high value of the dollar is causing problems for exporters, but points out that the Australian and British currencies are also at 25-year highs against the US dollar.
Minister of Economic Development Trevor Mallard says it is unfortunate some manufacturers feel they are being forced overseas, but the sector is changing. It is difficult to compete against other countries that supply cheap labour and land.
He says options apart from capital gains tax and mortgage levies need to be explored to try to help businesses that are struggling.
Mr Mallard says New Zealand must focus on high-end manufacturing that come from local research and design initiatives. Any wide-ranging change to monetary policy would need to have the support of all the main political parties.
National urges Government to act
The National Party says the Government should be doing what it can to help struggling businesses.
National finance spokesperson Bill English says the Government needs to stop charging record amounts of tax and change the business environment. He says the Government also needs to rein in its own spending, which would take pressure off interest rates and the dollar.
Copyright © 2007 Radio New Zealand
Union determined to keep manufacturers in NZ
Aotearoa/NZ is the most trans nationalized economy in the OECD. Workers and their families have been kicked in the guts because of the states addiction to neo liberal bullshit. The Fisher & Pykel factory at East Tamaki has employed generations of Maori & Pacific Island families. Taking these jobs away means pushing down local conditions, and condoning the exploitation of workers in Asia.