KEY POINTS:
Here are earlier views:
DGMarsden
Well, having lived in NZ for almost 20 years. i can say NZ beds have always been so expensive!
Andrew Atkin
Helen Clark has suggested that the F&P closure is no big deal because it's a trend for all developed nations to outsource their physical manufacturing. She misses the point (no doubt deliberately). Yes, manufacturers outsource as their countries get proportionally richer, and that is the right reason to outsource. F per centP has outsourced (prematurely) because of our over-rated dollar - the wrong reason. F&P has basically made an investment decision as though our country is richer than it really is, and the only thing that will achieve is damage to our economy because it leaves us with a trade-balance that is even harder for us to get on top of. In turn, it erodes our ability to into develop into a truly high-wage economy (based on productivity as opposed to borrowed money). National is absolutely right to seek out ways to correct our dollar. An over-rated dollar is the last thing we need right now.
Paul H
The more rights you give to workers, the more you take away from employers. Sound business practice and strategic planning is needed in this country, but most people would rather look after number one and vote Labour.
Bravo Kilo
Selling out to The Chinese. Nostradamus foretold of this - "Beware the advent of the King of Mongols..."
John
Manufacturing problems started years ago when this country adopted an "equal wage" policy and then put floor wages (mostly female workers)up to the rate of their supervisors (mostly males). It should have been obvious that the resulting cost increases would encourage imports from lower wage cost countries. Think about the latest worker 'benefit'. A factory with 1600 workers is now required to give them all an extra week of paid holidys. That equates to 1,600 worker/weeks of less productivity - and it means that the same labour costs will now make a lesser number of products! The factory would be less than responsible if it did not seek ways of reducing its labour costs and sending a part of its manufacturing offshore seems a very logical solution. Sustainable higher wages must be supported with higher productivity or we will all lose out.
Carl Forster
The key role of the government is economic development. The government is the leader and should provide the infrastructure, tax incentives, making it easier to do business. When local companies prosper the government will prosper even more. The government thinks it from their efforts that the economy was doing well. They have absolutely no knowledge on how the economy should be run and compete with the rest of the world or at least close the gap. They just let it run its course. We cannot compete with the rest of the world when we this government will not take control of the economy.Any changes made now may take another decade for NZ to reap the results.
There has been a lack of response from the government to Fisher and Paykels announcement and the current difficulties exporters are facing?. Labour who promised to push New Zealand's export sector into the forefront back in 2000? Clearly they are failing to live up to the rhetoric instead the sector is rapidly heading backwards, and with the current Labour Government and the Reserve Bank there appears to be no comprehension as to the economic impact of current policies. As I see it we should not have this open free trade deals that seem to be the poultice this government keeps pushing we should be placing tariffs and import duties on goods that compete with NZ produced products.Every country we compete with has these duties and what does our Labour government state no worry it will level its self out Sorry Labour wrong and you have had 9 years to put it right what we have it wrong. May be we need to put our governments on a floating wage based on how the NZ$ is rated and the GDP of the economy. If this government's pay was based on their productivity and gains to the NZ economy that would have – zero wage.
Geoff Harman
Yes the dollar is relatively high - wages in NZ can not compete with a lot of Asian countries - also in the last few years the price of land and a lot of infrastructure costs have rocketed and as a whole people feel richer but in cases no better off. History teaches us that change is inevitable - our low skill economy is under threat we like to purchase all the goodies from these low cost producing countries but what they buy of us is limited as a whole. It is like changing of the guard and until we come to grips with that fact and upskill we can expect much more of the same - China and India are the new drivers of the world economy. Get used to it.
Stewart
If every man, women and child in New Zealand could each earn a profit of around $40,000 in overseas funds to pay off our $143 billion dollar international debt, then the demise of any manufacturer or other export income earner would be of much less concern. If we ran our nation in the same way that prosperous families organize their personal income and control their spending, New Zealand would also be prosperous as a country. We reap what we sow - its not hard to understand.
Catherine Thomsen
The move by Fisher & Paykel for the manufacturing for their washing machines overseas has only reinforced mine and my husband's view that it will be to the further detriment of their reputation and brand. Fisher & Paykel's reputation is built on being an innovative NZ icon. Moving manufacturing overseas will make it no different to other brands such as Samsung and Westinghouse. Our experience with Fisher & Paykel is that their brand is not reliable as it once was. -Moving manufacturing overseas will remove any reassurance for backup service. -Not to mention the loss of jobs.
Don
Im a kiwi living in Thailand. The prices of whiteware is definitely cheaper than it counterparts in NZ. EG we recently bought a Toshiba fridge/freezer approx 5 foot, frost-free, with ice maker for 16,000 baht or NZ$640. and this model wasnt the cheapest 5 foot either. Once the free trade agreement(with Thailand) on whiteware comes into effect, there will be cheap appliances coming into NZ, no doubt about it.
Robin Stanford
This government has pursued ideological pacifist and union indulgent policies without due regard for proper and effective governance and balanced analysis of the situation. Despite the evidence to the contrary they have systematically overseen politically correct policies which have neutered the armed forces and the police, crippled the health service and created a nation of dependency and failure through its dumbing down of the education sector. Their foreign policy is that of a third world despot. Such stupidity has not been witnessed since the Battle of the Somme. Their legacy has inflicted mortal wounds on a once proud and successful nation. It is time to declare a National emergency; let's get rid of them before we bleed to death on politically correct claptrap.
Don Chooi
Why is this move made by F&P comes as a shocking surprise to most? I would have thought that us NZers would have been desensitised by now, considering all the frequent upheavals that has / is impacting heavily on our socio-economy. Yes, much like having been over-exposed to gory, blood-filled movies, we should have shrugged off this piece of news. It doesn't matter if there are 350 jobs laid off at once. Apparently, our unemployment levels are at an all-time low, we have a more-than-adequate surplus and homeowners are (allegedly) mega-millionaires and the people needs to be taxed more. Our future must have been looking so bright that it must to be dimmed. Someone buy the-powers-that-be some sunglasses. Please.
Marc
A knowledge-based economy is built on credibility. If NZ stops making things, we stop having the credentials and expertise to design and contract for things to be made elsewhere. In 1-2 generations, the designers, engineers, production managers and tradespeople that form the backbone of our fledgling knowledge economy will have gone from the workforce. Those coming behind will lack the platforms for pragmatic learning, for establishing their credentials. As a nice place to live, we may choose to be content serving experienced professionals in the knowledge economy who move here from other geographies where they have trained and gained their reputations. They will have the expensive homes and enjoy our peaceful, clean environment. Our children, those who remain in NZ, will commute on electrified trains from worker slums in order to make their coffees and clean their houses. Unless we want a future for our children here in NZ. If so, we need to maintain a vibrant manufacturing economy and culture - to underpin our own participation in the knowledge economy: - get unproductive government spending down, stop competing for $ and relieve pressure on the $ vs. overseas currencies - establish a level playing field with overseas manufacturers, and knowledge workers - health & safety, vacation entitlements, investment incentives, etc. We don't need to make everything, but we do need to have a strong manufacturing base.
Bart Schroder
My small company operates in a global market just as F&P does. Without that market, and the communication power the internet brings, I would not have a business. Globalization means much larger opportunities for companies such as mine, admittedly reducing the opportunities for less skilled workers whose jobs inevitably will go to lower cost countries. Our goal as New Zealanders is to maximize the opportunities globalization brings based on resource or skills advantage. I agree the F&P activity is a wake up call - we educate far too few people to fuel tomorrows competitive productive sector - we need more engineers, technologists and scientists. Further we actively discourage them by charging large university fees, with much lower pay than other employment opportunities which do not contribute to NZ's global position. As a result companies such as mine can't get the people we need, and our, and NZs' future suffers. Our goal should be a high pay, high reward and satisfaction economy based on superior education in the right sectors, not on low cost workers or battalions of service graduates.
Norman
What a good idea! The environmental restrictions are much lower in China. Manufacturers can take advantage of a lowly paid workforce and I believe you can smack the workers if they act like children!
Sam
Perhaps NZ should move its industry towards hi-tech.Manufactoring is a lo-tech industry and don't earn you a high GDP. Its time to move on!
Steve
It is time to face the facts. It is not economical to make products in NZ. The cost of living is high, so labour is expensive. Taxes are high and production capacitity is small. Large scale production is more economical that small scale. Additionally, when you buy in smaller quanitities, raw materials are more expensive. This is just not a race NZ is equipped to win. The best thing would be to accept the limitations and focus on the parts of the economy that we can be world leaders in, like agriculture, tourism, timber, movie-making, and information technology.
Philip
How can you compete against countries offering incentives to encourage manufacturing and economic growth plus the added bonus of the average person's wage being $1 per day??? And Helen Clark wants a free trade deal with them???? Wake up,Helen! Perhaps, the government should consider taxing imports to give NZ manufacturers a more level playing field.
Tom
This whole issue is the fallout from the adoption of monetarist policy back in the '80s. NZ is no longer in control of its currency. This effectively constrains control of exports, as their price is dictated by currency speculators more than the government or industry. China's currency is heavily regulated by government, which is one of the reasons why their export market (and economy) are doing so well. When competing in a global market, this means NZ and countries like it are at a competitive disadvantage if they manufacture locally and export at prices set in local currency. The same policy has had a number of other effects, especially when coupled with a lack of regulation on foreign ownership.Like the UK, NZ is becoming an aircraft carrier for foreign businesses at best - and an empty shell with no manufacturing base at worst.
Peter C
Increased government spending (on what?) = higher inflation = higher interest rates = higher $ = firms can't compete with offshore competitors = they have to relocate and NZers lose jobs. I see Mallard says don't worry - he obviously knows better than the OECD who critiscized our economic management 2 days ago but the best he could say was it "read like a Natinal Party manifesto". Lets hope so - bring on next years election - but how many more job losses and people being priced out of property? On well, lets focus on important issues like parents smacking their children and putting a rugby stadium on the waterfront.
Joe
Not just F&P but the list will grow quicky ,Strong New Zealand Dollar and high interest rate ,what you expect ,have look to Japan always the government work hard to push JPY down ,RBA should feel with exporters and they should do something or everyone in NZ will suffer . The government and RBA should do something ,they have wrong policy they pushed the inflation and NZD higher ,they should change the policy and push NZD lower ASAP before the nation bankrupt.
Paul King
Maybe the unions will stop getting everyone to vote Labour now.
Dan
Unfortunately much of the economic debate in this country is controlled by those who make money out of money, not those who actually make things. Instability is great if you make money out of money, you move it in when the rates are up and out when rates go down, and unfortunately instability is what is killing the NZ economy. We've never recovered from 1987, the exchange rate rises and falls, commercial power prices are dangerously unpredictable - who in their right mind would set up a large company in NZ? There are a lot of sensible ideas in the previous posting but you can bet nobody will do anything, at least not until after the next crash. Here's another thought - if Kyoto is such an issue why aren't we charging tariffs to offset the cost of nonexistent environmental and labour laws in China? Actually you already know the answer to that one.
Barbara
Asia in particular China, is a giant vacuum cleaner sucking in all the raw materials and producing high quality cheaply manufactured goods. NZ cannot compete nor should it. New Zealand has a comparative advantage in agriculture and if the political Green party allows it NZ could be world leaders in GE genetically modified biotechnology for agricuture. I am not talking about cloning humans. For centuries farmers have breed naturally hybrid crops and seeds, to produce new flowers, better fruits, better livestock etc naturally. But here in NZ we are regulated by a bawkward luddite political Green party. NZ are world leaders in agricultural products so we should stick with that. Former Prime Minister Lange said if you wanted to employ everyone in NZ give them a tea spoon to dig a tunnel. The fact is NZ is highly mechanized in agriculture so we have a surplus of people that don't need to hand pick our crops. What should they do? Capitalism dictates that we can develop new industries with our surplus labour such as IT Information technology, software etc. Tourism and English language schools are industries NZ is good at. I can think of many industries such as sail boat building. The list goes on.
Fred Tan
One of the many roles of the government is economic development. The government is the leader – provides the infrastructure, tax incentives, making it easier to do business, making it competitive for NZ companies to compete with the world, etc. Only when the local companies prosper will the government prosper even more. NZ is fortunate to have the agriculture and dairy to prop up the economy, but soon they were also be overtaken by the likes of India and China and other protectionist countries. The government thinks it from their efforts that the economy was doing well. They have absolutely no knowledge on how the economy should be run and compete with the rest of the world or at least close the gap. They just let it run its course.NZ is termed a low wage economy. Yet it cannot compete with the rest of the world. Something must be very wrong. You don't need a rocket scientist to realise that it is sliding from 1st world to 3rd world. If nothing is being done now, it will only get worst. It will soon be like just one of the many poor pacific islands. Mind you, any changes made now may take another decade for NZ to reap the results.
Graeme Petrie
People need to realise that manufacturing in NZ is all but gone and will never be ressurected. We cant compete against Asia with regard to labour costs and the government is not going to do anything magic to change it as we need Asia to trade with as this is where the majority of NZ exports are sold to that brings money into NZ.We need Asia more than they need us to survive as a country and if we want them to buy our meat, wool and dairy products then we have to buy their products. Its a pity as manufacturing always provided jobs for people but we have to get on with life and train young people to learn new skill which are relevant. The goverments policy of encouraging NZ made is just a bullshit scenario to appease the Greens and is nothing more than a waste of money.
Your Boss
The reasons of job loss are Minimum wage, The Holiday Act, high Government spending => high interest rates => Strong $D. See, the damages from the Labour Government are long term and irreversible => the plants will never move back to NZ.
Tim Spooner
One misconception that needs to be shot down is the idea that Thailand is an underdeveloped country with "slave labour". That could not be farther from the truth. There are many many foreign owned factories which are easily comparable if not superior to F&P at East Tamaki, the majority of which are only a few years old and employing the latest technologies, far superior to most NZ manufacturers. Employees are well trained, loyal and willing to work in conditions that are superior to many NZ operations, including provision of apartments, transport to work, cafeterias etc. Quality assurance to ISO9001 is the norm, rather than an exception and many factories proudly display their accreditation at the front gate. If you want to work on the counter at MCDonalds, you need a Bachelor Degree. Anything higher and you'd better have a Masters Degree. NZ has lost ground against the rest of the world due to complacency, lack of investment, lack of education (NCEA!!what a joke, no losers)! Already, we have a service economy with most roles filled by immigrants who are skilled but unable to work in their own skill area. Low wages, high prices, high taxes, ludicrous house prices and politicians interested in what??4 weeks Annual Leave!! Certainly not manufacturing support, but the glory of being a Minister swaning around the world (The Winston Effect) and stopping parents discipling their own children. Now we are going to reap what has been sown in the past 8 years. Don't talk about keeping manufacturing in NZ or bringing manufacturers back. It's too damn late.
Pete Botting
I would suggest anyone reading these comments or interested in what is really going on should read a recent book by David Korten, The Great turning from empire to earth community.
Richard L
"What's gone wrong with NZ manufacturing?' About 20 years of inaction by the NZ electorate. Get off your butts and change monetary policy. It's called wealth creation, not giving your hard earned cash to Westpac, ANZ and AMP. "Earth to Kiwi."
Will
Companies move to places like China and Thailand because the cost of labour, which is a big cost in assembling things such as washing machines, is a lot cheaper, in my opinion they save their money because they don't have to pay workers things such as sick leave and holidays. What it boils down to is exploitation.
M Hawkes
The mismatch between the level of the NZ$ and our high cost structure, both of which have been made dramatically worse by our schoolteacher government, the productive sector of the economy is hamstrung. Extra holidays, Kiwisaver, public holidays act, OSH, RMA costs are all luxuries which have to be supported by income, we do not earn enough to enjoy such luxuries.The unrestrained borrowing by the banks (All the banks) from foreign sources to fund (un)real estate 'investment' and support consumer spending makes the report card unsustainable. Thailand has a much more attractive tax system for manufacturing, excellent infrastructure and a progressive workforce. The loss of F & P and the likely future loss of manufacturing capacity, and management jobs from NZ is a logical consequence of government policy. Forgive them for they know not what they are doing.
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