There’s been a fair amount of hyperbole this week over the closure of two carpet making plants in the North Island. To give a synopsis of the situation, a few years ago Feltex carpets went bust. After a length liquidation the assets were purchased by an Australian carpet manufacturer wo undertook to “maintain the production status quo”. Lo and behold, a year or so later comes news that the plants will close.
The thing that surprises me is that anyone was actually surprised by this move – we’ve seen it happen dozens of times in recent years in New Zealad, be it in the high-tec, manufacturing or other industies. The process goes like this;
- Offshore company buys domestic company that was founded, manufactures ad runs operations from here
- Acquirer swears they have no intention of tinkering with the business model and the status quo will remain
- Acquirer waits 6 months or so til the media forgets about the story
- As quietly as possible the acquirer announces that trading conditions have changed substantially since acquisition
- Trading changes force closure of New Zealand part of the operation
Net result – profits, jobs and IP are nicely moved offshore.
It’s not a surprise people – it’s a direct result of NZ being primarily a commodity player not having an ambitious global view, and inviting foreighn acquisition in return for cheap consumer goods.
Welcome to the global village….
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Not too surprising, given out lack of savings, our willingness to buy homes not investments, our focus on primary products rather than services…
Love this from RWW http://www.readwriteweb.com/archives/relocalization_opportunities_l.php
The key to all of it tho is a connected reality. Moving from growing and shipping raw products to IP based services.
What i don’t quite get is how you retain that. We have a few examples now of successful businesses that get sold off. Mail marshall, aftermail, trademe … in the end how do they help??
It seems then, as a geographically distant producer of commodities, NZ is about to get triple shafted by the carbon crisis, the localisation fad and the absorption of our industries by globalised competitors.
Now there’s a cheery thought. On the other hand, the world is hungrier than ever for food and oil, both of which we seem to enjoy an abundance of at present. I can’t see that demand abating any time soon. The question is then, how to use this window of opportunity to create a sustainable future.