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The Forum > Article Comments > Securing the future of Australian manufacturing > Comments

Securing the future of Australian manufacturing : Comments

By Kim Carr, published 10/4/2008

Kim Carr lays out his plans for the future of Australian manufacturing.

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Daggett/cacafonix, show me where I said that manufacturing exports were a
significant part of the Australian economy, as you claim. More strawman arguments
from you, as expected.

As I have said all along, Australian manufacturing got fat and lazy, hiding behind
huge tariff walls. Well the sheep collapsed in the end, you can’t ride on its back
anymore. Now you ride on the back of mining, until you learn to make a living
in the real world, as the rest of the world has to.

Manufacturing in Australia today is largely geared towards supplying mining and
farming with niche products. Some of those products are also exported.

Some niche manufacturing industries, such as exporting ferries worth 70 million$
each, are actually doing quite well. But they cannot expand due to a labour shortage,
so are moving off shore more and more.

Australia is already protected by moderate tariffs. The MV industry, Nufarm etc,
all protected by moderate import tariffs.

The problem was that Australian tariffs were not moderate, but outrageous.

As an exporter at the time, I was competing on global markets, yet having to
pay for inputs with 140% tariff protection! The result was that our products were
far less competitive, as people in Melbourne, were getting fat and lazy hiding behind
that kind of protection.

With a mere 20 million population, what you land up with is lots of little monopolies,
thriving behind tariff walls, rather then efficient industries.

Perhaps that is what Daggett/Cacafonix is after. Extremely little work for huge pay.
It won’t work, sorry.
Posted by Yabby, Thursday, 17 April 2008 3:47:26 PM
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Perhaps Leith or Yabby would care to comment on a story in today's Courier Mail:

http://www.news.com.au/couriermail/story/0,23739,23554201-5003402,00.html

Fisher Paykel does not fear backlash after job cuts

FISHER & Paykel Appliances Holdings Ltd is confident its decision to axe 740 jobs in Australia and New Zealand will not prompt a local consumer backlash.
The New Zealand company is closing its Brisbane plant with the loss of 310 jobs as part of a strategy to concentrate its production operations in Thailand, Mexico and Italy.

Another 430 jobs will go at the whitegoods maker's Dunedin, New Zealand, plant and 330 jobs will go at its DCS cooking plant in California.

...

Mr Bongard attributed the decision to globalisation - as developed countries struggle to compete with low labour costs in developing countries - exacerbated by local factors.

The Fisher & Paykel chief cited the high New Zealand dollar, complex and expensive compliance costs in manufacturing in Australia and New Zealand and free trade agreements with China and Thailand as factors.

"When you're having to compete on a playing field where you've got zero tariffs from low cost countries, it doesn't matter how smart and how tough our guys are, you can't compete against unlike economies,'' he said.

Labor costs in Mexico, where Fisher & Paykel has acquired a plant from rival US whitegoods maker Whirlpool, are one sixth the cost of labor in New Zealand, he said.

In terms of its local manufacturing operations, the restructure leaves Fisher & Paykel with refrigeration and production machinery facilities in Auckland with 350 workers.

...

Fisher & Paykel, which has been a substantial manufacturer in New Zealand for almost 70 years, expects to to save $NZ14.5 million ($12.24 million) per annum by closing the Dunedin plant, after a one off cost of $NZ26.0 million ($21.95 million), pre-tax.

The company, which started manufacturing in Australia almost 20 years ago, will start the relocation of the Brisbane pant to Thailand by March 31, 2009.
Posted by cacofonix, Thursday, 17 April 2008 3:57:11 PM
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One of the comforts of being a thorough researcher is that one can compare real world scenarios.

The 1950s and 1960s were the greatest period of prosperity in Australian history.

This was also the period of maximum union influence and protective tariffs.

Let me put a human face on this. We were all happy. We all could buy a home. We all could have a holiday. We all could buy a car, or two. We were all healthy, and we knew we lived in the greatest country on Earth.

What fool would say this today.

The difference? Compliance with the WTO, WB and IMF dictums.

Yabby; you are either blind, a sociopath, or both. Either way, I give up treating you like a rational and emotionally balanced human being. Contrary to your claims, no significant trade factor on this planet has changed since those times. Only absurd trade ideology. Further discussion is pointless.
Posted by Tony Ryan oziz4oz, Friday, 18 April 2008 12:06:35 AM
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Tony, in the 50s and 60s, Australia rode on the sheep's back. That
sheep eventually collapsed from all the weight that you put on it.
Now you are riding on mining's back.

If you think that Australia can live in blissfull isolation from
the rest of the world, think again.

People who are economic realists, like Keating and others, are
aware of the fundamentals, you clearly are not.

Daggett, its really up to F&P, if they want to manufacture
whitegoods here or not. Personally, all the whitegoods that
I buy are Australian made, so they will lose me as a customer.

With our near full employment levels, those workers will soon
be absorbed by other industries.

Whilst Australia still imposes taxes like payroll tax etc on
manufacturing, plus a heap of beurocratic nightmares to go along
with it all, I certainly don't blame anyone for moving offshore.
Posted by Yabby, Friday, 18 April 2008 9:22:07 AM
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I will keep on repeating this, to counteract the propaganda of the neo-feudalists:

Bulletin Gallop survey of 1999... More than 23% without a job that pays a livable wage (the whole point of having a job).

Survey by the Australian Independent, July 2006... 19% unemployed; and a more conservative assessment than the Bulletin/Gallop.

All Job Network offices between Maroochydore and Emerald; 2007-2008... absolute consensus that national unemployment is 20%.

This is 5% higher than for any sustained period of the Great Depression; yet the ALP Governments (the worker's party - ha ha) is about to introduce mass scale third world workers to Australia.

I request that readers either accept my quoted figures and repeat these at every opportunity, OR do their own research and surveys and proselytise the results. The criminal propaganda of the Government, BBC and SBS, and Murdoch media must be rebutted.
Posted by Tony Ryan oziz4oz, Friday, 18 April 2008 11:51:47 AM
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Here's some more great news about Fisher & Paykel. (Note how the sackings are a consequence of the China New Zealand Free Trade agreement. Australia is now also negotiating an FTA agreement with China):

http://www.news.com.au/business/story/0,23636,23559063-462,00.html
Fisher & Paykel jump after mass firings
By Gavin Evans April 18, 2008 12:00am
Article from: Herald Sun

NEW Zealand's Fisher & Paykel (F&P) Appliances jumped almost 12 per cent yesterday after the company announced plans to fire 1070 workers and shift production to Italy, Thailand and Mexico.

In addition to closing its Brisbane plant which gave it the biggest saving of $NZ28.6 million ($24 million) a year, the company will shut factories in NZ and California during the next 18 months.

The moves were forecast to save $NZ50 million a year, after a matching one-time cost, F&P said.

The dual-listed shares jumped 22¢ ... to $2.10 on the ASX.

The closures are the latest by F&P, which last year shifted its electronics and laundry units from Auckland to Thailand, citing the rising NZ dollar, increasing competition and higher steel and plastics costs. A trade accord signed between NZ and China this month will cut tariffs on Chinese-made whitegoods by 2013, increasing competition.

...

F&P managing director John Bongard said "exchange rates, interest rates, FTA agreements and relative labour costs" made it difficult for an NZ manufacturer.

...

F&P said it was investing $US41 million ($A44 million) ... in Mexico, where labour rates are about a sixth of those in NZ and transport is cheaper than the US.

---

http://www.theaustralian.news.com.au/story/0,25197,23558203-2702,00.html
Anger as jobs go offshore

...

Unions claim that workers in Thailand will be paid about $2 an hour, while the workers at the Cleveland plant were receiving $18-$21 an hour.

...

"The loss of these jobs is particularly worrying because they are relatively hi-tech and not jobs down the bottom of the manufacturing scale," (said Australian Manufacturing Workers Union national president Julius Roe).
Posted by cacofonix, Saturday, 19 April 2008 12:40:41 AM
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