KEY POINTS:
It's hardly sexy. "Save the whales" - well, who wouldn't? "Save the fur seals" - irresistible. But "Save Manufacturing?"
For those who don't work in the field, the very word - so clunky and mechanical - evokes images of windowless, clanging factories and limb-endangering machinery.
But unions, economic experts and business groups are crying out for us to save our factories, mills and plants. Not just because of the 282,000 Kiwis employed in them (by comparison, 476,000 work in wholesale and retail trade).
Nor for the up to five jobs that depend on each top-tier manufacturing job. Nor because, as one of the most unionised workforces left, manufacturing employees by and large enjoy higher hourly rates and better conditions than workers in the service industry, which is where many of the former wash up after redundancy. It's not even because of the 15 per cent contribution the industry makes to our gross domestic product.
We should save manufacturing, say its champions, for its crucial role in building a strong, sustainable, resilient economy and the way of life this supports.
John Walley, chief of the Christchurch-based Manufacturers and Exporters Association (MEA), paints a grim picture of New Zealand in 50 years' time unless there are major policy shifts.
"It's going to look like Ireland in the 1960s, when Ireland had emptied young people and talent into England. I can see New Zealand emptying out to Australia."
"Either that or we'll be a nation of peasants and fast-food workers," agrees Laila Harre, national secretary of the National Distribution Union, which represents more than 20,000 workers across various industries, including some types of manufacturing.
It seems hardly a week goes by without a company announcing it's closing its plant or shifting production offshore. Last week it was Carter Holt Harvey's Kopu sawmill on the Coromandel (145 jobs going) and Whangarei's Tenix Shipbuilding (60 jobs).
Dunedin is smarting from the imminent loss of 500 jobs after Fisher & Paykel announced last month it was closing its Mosgiel plant (450 jobs) and family company Tamahine Knitwear called it quits after 40 years (50 jobs).
In the last six weeks alone, at least 830 people in manufacturing around New Zealand have learned they're about to lose their jobs.
Walley says there will be more manufacturing job losses in coming months. He was in talks last week with a North Canterbury company on its last legs, where 30 jobs will probably go and he predicts job losses nationally for the remainder of the year will number in the hundreds. Hardest hit will be the clothing and textile industries, he says, and the regions where they are concentrated particularly in the lower North Island and Auckland.
Andrew Little of the EPMU says the timber industry, with its scattered, small-scale mills unable to churn through the volumes required in today's market, is in desperate need of leadership and attention from its own players, "which is not happening".
However, a major employers' group, the Employers and Manufacturing Association, sees manufacturing's fate in a far more optimistic light. Says manufacturing spokesman Bruce Goldsworthy, "I believe that the sector has been underestimated in its ability to adapt."
In 1989, two years after powerful protections for local manufacturers were stripped away, 21 per cent of the workforce was employed in manufacturing. Last year, that figure was 14 per cent.
"Everybody said in 1987 this is the end of manufacturing in New Zealand, but after the initial shake out employment in manufacturing climbed back."
AFTER 15 years at the Kopu mill, Rodney Fraei is stoic about his looming redundancy. The 38-year-old is a maintenance fitter and father of two. His wife Julie works part-time.
Frai is confident he could get other engineering work, but it would entail either shift work, long-distance commuting or a drop in his $50,000-plus wage, none of which appeals. Instead, he's looking to change professions.
"Too many jobs, they're not about the family," he says. "Your Monday to Friday jobs are gone in these areas."
Harre and Walley argue consecutive Governments have miserably failed workers like Fraei. Yes, global market forces are hammering our manufacturers, especially those whose exports are largely beyond our control, but the way New Zealand controls inflation is greatly exacerbating the damage wreaked by these forces.
The Reserve Bank's main tool for controlling inflation is the official cash rate, or OCR, which heavily influences the cost of borrowing money. When the OCR is high, interest rates will almost always be high, making New Zealand attractive to investors and thereby pushing up the value of the Kiwi dollar.
And high interest rates plus high exchange rates - the situation we've had for most of the 2000s - "are the two worst things you could imagine for manufacturing in New Zealand", says Harre.
The latest Fisher & Paykel plant closure dismays her. "It's really, really sad, and it was totally avoidable."
Unions agree with business groups that New Zealand businesses need to become more productive - essentially get more bang for their buck - but Harre sees the OCR as the main brake on productivity. As many plants become due for upgrading, the high interest rate is tipping the balance for executives deciding whether to pour more money into New Zealand plants, or set up a state-of-the-art operation for a fraction of the cost in countries such as China.
Prime Minister Helen Clark summed up the Government's approach to supporting manufacturing in a speech she gave in Christchurch last week. "[New Zealand companies'] competitive advantage will lie in our ability to innovate, design, brand and market world class products."
She listed various Government programmes and policy changes that would further this goal, including the modern apprenticeship scheme, investment in broadband, a new 15 per cent tax credit for businesses that conduct research and development, and hands-on New Zealand Trade and Enterprise marketing support.
Harre is scathing. "Labour has lost the plot. Who says New Zealanders are brainier than the rest of the world? In order to keep the brainy jobs going you need the brawny jobs.
"It's all very well to say high-tech, high-end, high-skill, but New Zealand workers at Fisher & Paykel are among the highest-tech, highest-end, highest-skill in the world. That hasn't saved their jobs."
Green MP Sue Bradford calls the knowledge economy line arrogant. For years, Bradford has been exhorting us to preserve and expand our ability to make what we need here.
The MEA's solution would also hinge on replacing the narrow reliance on OCR, but the association wants less government (regulations and schemes) rather than more. Walley would also like to see a capital gains tax to level the investment playing field between business and property.
