KEY POINTS:
Labour was isolated yesterday as two coalition partners and the National Party called for cross-party talks to solve New Zealand's manufacturing crisis.
It follows the announcement by iconic New Zealand manufacturer and exporter Fisher & Paykel that a significant portion of its manufacturing sector would be sent overseas, costing 350 jobs.
As New Zealand First, the Greens and National said they were prepared to talk and find a solution, Prime Minister Helen Clark had a stark message for the sector: "All western economies have seen manufacturers migrate to lower cost centres. It's been the way of the world for a long time."
Manufacturing employs 235,000 people, accounts for more than 65 per cent of our exports, and 15 per cent of GDP.
Last night, National deputy leader and finance spokesman Bill English said National would consider cross-party talks but only if they led to actual policy change.
"We would need to see an indication that the Government was willing to change its policies to make these industries more competitive and stop treating them as a cash machine for Labour to spend their money."
English said current policy had been of no benefit to manufacturers, despite the industry providing a strategy to the Government. He said flexible labour law, less red tape and competitive ACC are essential to making the industry more competitive.
He also said if the Government hauled back their spending programme it would take pressure off interest rates and lower the dollar, easing pressure on exporters.
English said he believed there was a future for manufacturing in this country. "New Zealand manufacturing has proven to be very resilient. They've had a decade where they haven't had any protection at all and they've changed enormously in that time. I don't believe they're doomed. I don't think it's the end for New Zealand manufacturing.
"They're getting good at finding their niche and they don't have to be high-tech. As Fisher and Paykel proved being more sophisticated doesn't get you out of China's grasp.
"There's no doubt that a US75-cent dollar is a crisis for some manufacturers and they need all the help they can get."
The Green Party's Sue Bradford, who's driven the Buy New Zealand Made campaign, said manufacturing would be saved by addressing big-picture issues - especially how we tweak the value of our dollar through monetary policy. Bradford agreed that New Zealand needed to focus on the high-skilled, high-value elements of manufacturing - design, research and development - and niche products.
She said the low-tech end was also important - specialising in the brainy stuff won't be enough as the Asian economies, with their bigger populations and good universities, become more sophisticated and move in on this territory.
Although global economic forces were beyond our control, New Zealand needed to retain the ability to manufacture here to avoid becoming more open to those external forces.
Fisher & Paykel bowed out with reasons that were an echo of those from other major New Zealand manufacturers - it was tired of trying to keep up with competitors who had already taken advantage of the cheap labour and other savings offered by China and other developing Asian economies. At home, high interest rates and the high dollar have also squeezed profit margins.
Bedmaker Sleepyhead has come out saying Fisher & Paykel's departure shows the sector has reached tipping point. Unless things change, expect more firms, including the bedmaker, to shift their factories - and jobs - offshore.
"Manufacturers are not asking for hand-outs," says Sleepyhead's Graeme Turner. "They are asking for economic policy that assists them to be globally competitive."
The sentiment was echoed by the Engineering, Printing and Manufacturing Union (EPMU), which estimates that in the past 12 months the high dollar was behind 1200 redundancies, either through cheap importers pushing local firms out of the domestic market or exporting costs becoming too high.
The smaller manufacturing businesses tended to simply shut rather than outsource overseas.
