KEY POINTS:
Sleepyhead boss Craig Turner never got to do the big OE with his mates.
When he was 21 , he completed his fitter and turner apprenticeship and was all set to take off when his Dad asked him to fill in over Christmas at the family's bed making factory.
"And I'm still here," he says.
He's not the only one. Craig, now 54, and his brother Graeme, are the third generation of Turners to run the company, with the fourth one right behind them.
"My 12-year-old son said, 'There's only one place for me Dad'," Craig Turner says.
However, by the time junior can join siblings already working at the family firm the manufacturing landscape could be a more lonely place.
Manufacturing is being left to die, Turner says.
"What's being done to re-invigorate manufacturing in New Zealand? - absolutely nothing," he says.
"We're just seeing a steady flow of people leaving ... they're voting with their feet and that's really a concern for us."
Sleepyhead will keep assessing the environment but is determined to stay put and invest in its local operation.
"We're here, we're not moving," Turner says.
The company has a capital expenditure plan of $2 million this year and is installing technology including a computer system that enables all staff to log production and earn bonuses above normal wages for productivity gains.
Employee movements could also be recorded to identify specific actions associated with jobs, which could then be re-engineered to save time.
"You can measure the productivity, then work out how to get the gains," Turner says. "These are the things New Zealand businesses have got to do."
Sleepyhead was founded in 1935 by Arthur Mudd before Turner's grandfather Sidney Turner - who had worked as a contract electrician - bought the business in 1946.
The Auckland-headquartered firm makes about 390,000 mattresses or bases each year and employs about 350 people in New Zealand and 120 in Australia - where it started large-scale manufacturing in 2000.
Profits are now flowing from New Zealand-funded expansion across the Tasman - which lost money for four years - including factories in Melbourne and Brisbane, and plans for Sydney and possibly Perth.
"Now we're making money we're bringing those profits back to New Zealand to re-invest," Turner says.
The company did not export beds from New Zealand but set up operations within specific markets, which had proved necessary to minimise the time to market and maximise the ability to react to competition.
Forecasting demand from a distance had proved too difficult.
The next expansion target could be in South America where the company has had a cursory look.
"We think that's a country that's in development, that has opportunities."
However, despite the overseas growth the company will continue to invest in its New Zealand home.
"We believe that imported beds into New Zealand eventually will run their course, the cost of freight, those countries becoming Westernised [and] getting more efficient here."
Companies that did move away from New Zealand would never come back and the skills and industries would be lost, Turner says.
However, savings made from using overseas labour could be countered by improving domestic productivity.
The major issues facing local manufacturers were not material and labour costs but a shortage of skills, the costs of compliance and massive subsidies handed out by foreign governments.
Running a family-owned business has made it easier for Turner to take a longer-term view on investment pay back than public companies.
"Our discounted cash flows absolutely don't stack up," he says.
"So when I put my proposal to the board it won't be on a discounted cash flow ... when they look at it they'll hate it, it'll be awful but by the time we get into it and we'll have taken decisions based on where we see the market [and] the opportunities for the future - that's how we drive our business."
Turner wants greater encouragement from the Government for companies to invest in equipment and research, possibly through tax breaks, lower rates or capital grants for proven productivity gains.
"The simple fact is this country needs re-investment," he says. "Without reinvestment we have no hope of increasing our productivity and being competitive."
The company's business model provided some protection against the fluctuating kiwi dollar but interest rates had made investing harder.
"I don't understand the thinking because the housing market's overheated with inflationary pressure then you put your interest rates up and you cripple business," he says. "They've really hurt us now."
The Government was listening to manufacturers concerns but the state machine was too slow and inflexible.
"That's really the question - are we serious about keeping manufacturing in New Zealand?" he says.
Turner planned to keep some profits in Australia for the next two years, thereby avoiding a double tax hit - firstly when earning money in Australia and secondly when bringing it back to New Zealand.
"It's a disincentive to bring money back to New Zealand," he says. "It just seems like there's all these things to stop us doing business."
The country needed a vision for the development of the economy, including the balance between sectors including farming and manufacturing.
"If I was setting up a business with a proper business plan I'd have to say how is my business going to work and I don't believe we're doing that in New Zealand [as a country]."
Turner had hoped to buy failed carpet manufacturer Feltex last year - put into receivership by ANZ bank with the assets eventually sold off to Australian rival Godfrey Hirst.
Feltex would have been a good match for Sleepyhead with the same customer base, similar machinery and aligned products.
It's a loss that still smarts.
"I know more about Feltex than probably most people still to this day," he says. "I spent weeks in the factory with the staff.
"I knew exactly what machines we needed to buy, I knew exactly what buildings we needed to deal to and it definitely could have worked."
The fight for Feltex dominated Turner's life for three months.
"I did nothing else, the only time I came here [Sleepyhead] was to photocopy things."
An official close to the situation told Turner that the bank had been given a deadline by Godfrey Hirst to do a deal or else they would walk away.
"The ANZ on one hand had us saying let us take it to the shareholders and Godfrey Hirst on the other hand saying if you haven't dealt with it by Friday, we're gone.
"So from their point of view they couldn't deal with it by Friday and so the only option they had open to them was to put it into receivers' hands and let the receivers decide who was going to get it."
Turner still rues Feltex as a missed opportunity.
"It actually seemed like a no-lose for anyone, apart from Godfrey Hirst."
Sleepyhead itself has been the focus of a number offers to sell up, he says.
"The carpet's worn out."
But Turner has not considered accepting, even for a nanosecond.
"I don't want to sit on a beach in Honolulu," he says.
Turner is the joint managing director of Sleepyhead but with the next generation of the family already making their mark in the business he sees himself merely as a gatekeeper.
He has a 25-year-old daughter working in marketing in the firm's Australian operation, a 20-year-old son and two nephews working in New Zealand and other family members setting their sights on a career in the bedmaking business.
"I don't think you ever own something," he says.
"When you're talking about a thing like a passion it's more than just a whole set of assets."
And he would not work anywhere else.
"It's pretty exciting, it's just [a] huge opportunity, so much growth and so many more things to do."
But he never did get to follow the lead of those mates and go on his OE.
"That's the price you pay but the path I went on opened up fantastic opportunities and I wouldn't change it."
Craig Turner
* Job: Joint managing director, Sleepyhead
* Born: 1953, Auckland.
* Home: Auckland.
* Family: Married with six children.
* Education: Glendowie College.
