Factory closure a major blow for manufacturing.

16 May 2006

Factory closure a major blow for manufacturing.

The Canterbury Manufacturers’ Association (CMA) has described the relocation of Dynamic Controls’ product manufacture to China as another blow for the economy, particularly for Canterbury.

“Dynamic Controls’ announcement is the latest in a growing list of firms that are either relocating offshore or cutting staff numbers - Click Clack, G. L. Bowron, Fisher and Paykel, possibly Sleepyhead and now Dynamic Controls. It is no longer cost effective for these firms to retain large-scale production facilities and employee bases in New Zealand, and relocating production makes sense under current conditions. Unfortunately, New Zealand is rapidly losing that which would not have been lost had policy settings been different”, says Chief Executive John Walley.

“Today’s announcement is a major blow not only for Canterbury but also the New Zealand economy. World class companies help develop and sustain world class supply chains and help the less than world class get better, and those economies that cannot sustain such companies risk the loss of the drivers and exemplars of innovation, while others gain. With Dynamic Controls producing elsewhere, there is less call on the local test laboratories, component and service suppliers. The loss of high tech, niche, innovative workplace skills and knowledge damages our collective capability to respond to future challenges and opportunities. Once lost, this capability is unlikely to be recovered”.

“The message from the Government and its agencies to manufacturers and exporters continues to be one of innovate, be high-tech, be productive and develop niche products and markets. Dynamic Controls was all of these things and they could not sustain operations in New Zealand with an overvalued currency. The company was cutting edge and world class on all of these dimensions but even with best practice everywhere they could not win in the environment created by our policy settings”.

“Dynamic Controls is working hard to minimise the impact on their staff but the wider economy also suffers as people cease to spend in local shops and within the service industries. This aspect of manufacturing is so often lost within all the talk and superficial sentiment surrounding schemes such as Export Year and special 0800 Export Year hotlines”.

“Today’s announcement is a demonstration that change is urgent and overdue and the failure of the Government to address domestic inflation is killing New Zealand’s ability for manufacturing and exporting. How many more companies and jobs do we have to lose before policy makers decide to rebalance the economy? When will enough, be enough?”

ENDS

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