9 February 2005
Interlock – another one bites the dust
Interlock – yet another New Zealand manufacturing icon bites the dust.
The Interlock withdrawal from Wellington shares many of the characteristics of the withdrawal of Electrolux from
Christchurch. Foreign ownership, foreign decision making, operational rationalisation and significant price pressure
brought on by globalisation.
The Government rush to implement preferential trade agreements with Asia is driven by the desire to open markets to the
New Zealand Primary sector. At the same time the Government is lifting the cost base of employment throughout New
Zealand.
The impact of these changes sits most heavily on small locally owned manufacturing companies. Without any clear policy
support for manufacturing the conclusion must be that Government has little interest in growth for the high value
manufacturing sector in New Zealand.
Many countries have direct and significant support for research and development, have much more supportive depreciation
rules for investment in productive equipment and better support their innovative, locally owned, small to medium sized
companies than does New Zealand.
Some believe that this issue is becoming critical; the slow erosion of the manufacturing base may well be at the point
where we start to lose the vital infrastructure that supports our manufacturing exporters. If that happens the decline
in our manufacturing sector will accelerate quickly.
The issue is not really about trade barriers or even preferential trade agreements. In manufacturing trade barriers have
been negligible for a long time. It is really about the dynamics of global competition.
Without any particular interest in New Zealand, international decisions will be driven by price only thinking.
Our salvation in this new world will be based on competitive activity with an interest in New Zealand; primary without
doubt – the grass grows here; tourism absolutely – the sights are here.
More than any other, the presence of a manufacturing sector is policy driven. If we want a manufacturing sector we had
better get policy behind our locally owned, innovative and productive manufacturers.
ENDS