Manufacturing a crisis

The opposition parties continue to try promoting a crisis in New Zealand manufacturing. Green Party spokesperson ‘James Henderson’ posted at The Standard:

The manufacturing crisis & the Right’s wilful blindness

Is there a crisis in manufacturing? Hell yes.

And part of that crisis is due to the fact that National and its lackeys refuse to acknowledge the problem.

Is the Left wilfully exaggerating? Commenter ‘tsmithfield’ thinks so.

I have to disagree with the word “crisis”. This has the implication of something, sudden, unexpected, adverse, and in need of a urgent solution.

I think the word “trend” is more appropriate. There has been a long-term trend, as in many other western countries, for manufacturing to be relocated to countries that provide cheaper labour rates for mass production (e.g. China et al.). The currency situation doesn’t help. But it isn’t the cause.

If we see the situation as a long-term trend, then the answer might well not be in “fixing” the manufacturing “crisis”. This might well be akin to trying to stop the tide, and simply mean tipping money and resources down the toilet. The answer might well be in adapting to the reality of the world, and focusing on our strengths. This might well mean a continuation of the trend in manufacturing. But as long as we are focusing on our strengths, and competitive advantages, then the country as a whole should prosper.

For example, for the last several decades we have seen many, if not most of our manufacturing clients relocate their production to the likes of China. We have adapted by aligning our business associated with food production or construction.

I think manufacturing can succeed in NZ. But it needs to be more “botique” in nature. That is, we need to focus on shorter-run, specialised type products, and high-end products that can’t economically be produced in the likes of China. However, I believe the days of long-run production of products for export in NZ are pretty much over. Other than for food related products where we have a competitive advantage.

In contrast to the Green rhetoric that is far closer to the reality of the situation with manufacturing.

I worked for a manufacturing company in the mid 1980s. It closed down in about 1987 due to the difficulties competing with cheap labour based manufacturing in Asia. I then worked for Fisher & Paykel at their Taieri appliance factory.

A generation later my son worked in the same F&P factory, and was just able to complete his apprenticeship before the factory shut down, moving it’s manufacturing to Thailand and Mexico – that was in 2008, while Helen Clark’s Labour ws still in Government.

Claiming we suddenly have a crisis now is one of the worst kinds of political overstatement and scaremongering, because it could impact on business confidence.

New Zealand manufacturing certainly faces challenges – as it has for decades. Another opposition ‘cry wolf’ won’t help them.

A party poll crisis does not justify manufacturing a crisis.

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