Blundies to be made overseas

Wednesday, 17 January 2007 - Tasmanian bootmaker Blundstone is about to move its manufacturing operations to Asia within months. The Aussie icon company, was founded in the 1870s. Blundstone says it can't compete against low-cost imports. The company says it will shut its doors within months after 137 years of operation and move to Thailand and India to reduce high manufacturing costs.

Up to 300 workers in Tasmania and 60 in New Zealand will lose their jobs.

The closure highlights the need for the Howard government to abandon its push for a free trade agreement (FTA) with China...

"Since 2003, we have not been able to pass the price increases - fuel increases, inflation, and labour - on to consumers," Blundstone manager Steve Gunn told the corporate media. "If we hadn't made this decision, the market would have determined Blundstone boots irrelevant in a relatively short period of time."

Mr Gunn said it was not worth asking governments for further assistance and said Blundstone would not be the last manufacturer in the sector to close onshore operations. "I would make the point that we are not the first Australian manufacturer to make this call there are others that have been identifying the need to do it," he told ABC Radio. "I don't believe that manufacturing in Australia is a sensible option."

The factory closure and the loss of 300 jobs in Hobart is a "major blow for the state and for Australian manufacturing," said Greens Senator for Tasmania, Christine Milne. "Blundstone did everything it could to keep the business operating in the face of falling tariffs and cheap wage competition from overseas. But the company was let down by the inherent contradiction in federal government policy which lowers tariffs and gives industry restructuring assistance knowing full well that such assistance will never be enough to compete with low-wage economies," Senator Milne said.

"The Howard government's headlong rush into FTAs must stop. Prime Minister John Howard must be the only person in Australia who believes that he can negotiate an agreement with China that will benefit Australia rather than the Chinese," said Senator Milne in a media release. "Australia should identify those manufacturing opportunities in the industry sectors of the future, such as energy efficiency and renewable energy, and build competitive advantage in those."

"Blundstone has been forced to leave because it can't compete with low
wages whereas Vestas and Roaring40s have gone offshore because of Prime
Minister Howard's stubborn refusal to move Australia to a low carbon
economy and develop innovation in industry accordingly," said Senator Milne.

"The Howard government has an obligation to look after the 300 workers who will lose their jobs because of its ideological commitment to free trade and zero tariffs. It is not enough to merely provide short-term financial assistance. Retraining must be accompanied by industry innovation and development, particularly in renewable energy in which Tasmania already has competitive advantage."

The textile union is also blaming the Federal Government's trade policies for the imminent closure of Blundstone's factory, and warns more jobs in the sector will go if changes are not made.

Tony Woolgar, national secretary of the Textile, Clothing and Footwear Union, said the Federal Government's trade policies were ruining Australia's manufacturing industry. "We've got a Government hellbent on doing a free trade agreement with China, we're allowing a flood of imports into Australia from China in the TCF sector, and unless the government is prepared to change it's policy on trade, then I think you'll see this sort of thing continue to happen," Mr Woolgar said on ABC radio.

Industry Minister Ian Macfarlane said the Government was disappointed, but said Australian companies found it difficult to compete with lower wages in Asian countries. "The textile, clothing and footwear industry in Australia has been under big pressure since the mid-1980s and that pressure has come from right around the world, as other countries have moved and Australia's standard of living has continued to rise and... wage rates rise, making this industry a little uncompetitive compared to that product coming out of Asia."

"We have committed almost $1.5 billion as a government towards supporting the textile, clothing and footwear industry in Australia and the company itself has been a recipient of many millions of dollars worth of assistance," he said.

Meanwhile the CFMEU – which represents almost half a million manual labourers – will shortly unveil its campaign to stop Blundstone’s management from moving offshore. "The majority of Australia’s 500,000 construction workers were proud to wear Blundstones, knowing they were supporting a great Australian company," CFMEU national secretary Dave Noonan said. "All that would be put at risk if Blundstone takes the low cost road to off-shoring production."

The legendary brand produces about a million pairs of boots a year.

All workers are expected to be paid their full entitlements.

Sources:
Senator Milne Media Releases
Tas bootmaker to move operations offshore - ABC
The Australian - Government blamed for Blundstone move
Union ban on Blundstones - Daily Telegraph
Blundstone.com