Developments

-Dieter Adam, The Manufacturers’ Network (formerly NZMEA) The Labour-led Government’s plan for its first 100 days covers a range of areas, a number of which have the potential to impact manufacturers – some directly, many indirectly. Among the latter, the first one to come to mind is housing – anyone trying to find and retain quality staff, especially in Auckland, knows the extra pressure the recent years house price appreciation has put on people and wages. The banning of foreign ownership, alongside extra effort on the supply side through Housing New Zealand, may contribute to easing housing cost pressure. There has already been some softening of the market, but time will tell if the Government’s new response can tackle the long term problems, both on the supply and demand side of the coin. Questions remain as to how realistic big plans to increase the housing stock are in the face of a crippling skills shortage in the building and construction industry. Further restrictions on migration may put pressure on new builds, unless new migration policies really manage to have a highly targeted impact. In terms of the tax working group, any tax changes aiming at tackling our poor productivity, one of the root causes of our lack of real economic growth in terms of GDP per capita, and per hour worked, need to make it easier for businesses in the productive economy to access capital. Funding the investment in people, machinery and equipment required to maintain an internationally competitive manufacturing position won’t happen out of operating cash flows alone. We need a tax system that effectively incentivises and pushes investment into the productive areas of our economy, rather than the current system which tilts the playing field towards investment in speculative activities by not (adequately) taxing profits. A combination of […]

New Zealand’s leading wiring and assembly solutions manufacturer says it has a long-term commitment to Samoa and hopes it will lead the way to other New Zealand businesses setting up operation there. Fero is an Auckland-based family-owned business that manufactures wiring looms for local technology manufacturers, ranging from automotive and marine lighting, to air conditioning units, air quality sensors and aeronautical units. It is in the process of setting up operations in the premises formerly occupied by Yazaki EDS, which closed recently puttig more than 700 people out of work. Fero has already signed up 60 former Yazaki employees and plans to employ more once its Samoan operations begin later in the year. The company intends to expand to 200 people over the coming two years. General Manager Sam Fulton says the decision to relocate Fero’s off-shore operations from China to Samoa came about after the company analysed its long-term prospects. “We are always looking for ways of doing things better, faster, cheaper for customers and we want to be known for being relied on to deliver – no matter what the timeframe, quantity or specification. Growing challenges with China were making it increasingly difficult to live up to those promises.” Fero investigated several alternative off-shore options before learning of Yazaki’s intended departure from Samoa. It presented the perfect opportunity because, like Fero, Yazaki manufactured wiring looms and also had very high-quality standards and skilled employees. Mr Fulton says Fero had three major requirements of its new off-shore operation: quality, productivity and minimal impact on its New Zealand management resources. “Yazaki’s premises are perfect for our needs and its employees ticked all three boxes in abundance. Their quality standards were so high that they had gone four years running with zero production defects. Its former employees are therefore extremely knowledgeable, […]

-Dr. Wolfgang Scholz, Director HERA  Now we have a new government – we have a left of centre mix of policies. Which on first principle should be building innovative, high value local manufacturing with the aim of increased prosperity and our ability to pay our way in the world. And for me, I congratulate the team around Prime Minister Jacinda Arden for being in the driver seat and look forward to seeing her make true on her promise “let’s do it”. You may recall some of our advocacy clearly advised that our local SME’s should gain from these policies. And, although still lacking details – we need to make sure that the promised R&D tax credits and business innovation, government procurement rules applying for subcontractors and pushing low emission technologies are indeed implemented. But for this to happen, we all need to continue formulating policy to our new coalition partners and make sure our voices are heard by them. The original election policies got it right While keenly awaiting the announcement of the agreed policy framework for our new government, I stumbled across the pre-election policies. It’s a worth-while read that reminds us what we requested and what was promised to us in respect to key policies affecting our businesses. We advocated that for our economy to grow sustainably we needed to “get of the grass” and invest in niche market industries with higher paying wages and export potential. A move that would increase the number of companies with sound R&D innovation strategies in New Zealand. We also said it couldn’t just be start-ups such as the IT industry, but had to include transforming our existing companies – as without them, we miss the critical mass. But for this to happen, accessible incentives for those willing to invest in R&D […]

ExportNZ says news that TPP – now CPTPP – is back on track will be appreciated by exporters. ExportNZ Executive Director Catherine Beard has welcomed signs of movement in the deal. “It’s great news that the deal is still alive, and that New Zealand is still in there. “It sounds like some concerns with the deal have been addressed while core elements such as tariff reduction have been retained. “On the back of the just-released ExportNZ DHL Export Barometer where exporters are very confident for the year ahead, this bodes well for export growth. “ExportNZ looks forward to working with the Government as it progresses the deal back in New Zealand.”

Clive Hickman, chief executive of the Manufacturing Technology Centre (MTC), and Jeremy Hadall, chief technologist of the MTC, outline the business changes they expect to see over the next five years as a result of automation. 1. Productivity will increase Think about the introduction of robots to a car production line. Volkswagen has gone from around 4,000 people working in this environment to nearer 150, while at the same time increasing overall employee numbers from 30,000 to 70,000 across the business. Business Impact: Improved productivity is good news, as businesses will get more bang for their buck. When you become more productive, you create more demand, and therefore more jobs. More jobs could also mean a higher skill level of employee. 2. Workers will be safer and happier We strongly disagree that people will be replaced by automation. Yes, people will be redistributed, but this will be one of the most important benefits automation brings. Wherever there exists a dirty, dull and dangerous job with humans exposed to risk, there exists the perfect opportunity for automation. Business Impact: Workers’ quality of life could be drastically improved as well as allowing them to move into a more highly skilled role including operating the robot. For businesses, this means a workforce with improved prospects, better morale, and a higher skill level. 3. Customer service will reach new heights Ocado is one of the best examples of how customers can benefit from a business adopting automation. To a large extent, they are only able to fulfil their promise of the faster delivery times that you and I have come to expect because so many of their processes are automated. Business Impact: Automation can be an invaluable tool for cutting down on errors, facilitating faster deliveries, and for speeding up processes such as restocking. […]