Job losses in Canterbury

Canterbury Manufacturers’ Association

6 September 2006.

Job losses caught between local cost escalation and low cost competition

The Canterbury Manufacturers’ Association says that the redundancies at Christchurch sheepskin tannery G. L. Bowron is a consequence of New Zealand manufacturers having to compete with the cost base of low cost countries in the global market.

“Firms based here struggle to compete with low cost competitors and maintain large scale production facilities and a sizable employee base at the same time”, says CEO John Walley. “For many companies in this situation, something has to give and as the Bowron case shows, the local operation pays the price with the loss of jobs from the local community”.

“Employment at Bowron has fallen from 700 to around 200 in the past 18 months, the company cannot make the ends meet in New Zealand with exchange rate fluctuations along with other examples of escalating costs like compliance and electricity”, says Mr. Walley. “The company is now looking to develop high quality products and rebuild a future at the top end of the market but this will take time, this sort of trend must be a wider concern for the economy and employment.”

“There has been so much talk recently about the need to drive New Zealand’s export growth”, says Mr. Walley. “Yet for all the talk and sentiment, the ability to export might be gone for good before we know it”.

Mr. Walley says that the Government has to see policy as a competitive issue. “If other countries focus on stability in their export sectors, exchange rates and targeted taxation and New Zealand does not, then our export companies start on the back row of the grid”.

“The result is that without Government support, the options left for New Zealand companies will be to relocate their operations offshore, hopefully there will be some residual activity retained in New Zealand, but in any event, Buy Kiwi Made will not matter anymore”.

ENDS

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