I HAVE a confession to make: I’m guilty of publishing hard-luck headlines to attract reader attention. Just Google ‘manufacturing Australia’ and they’re not hard to find. Factory closures have taken-up their fair share of page space over the past few months – both online and offline. But I come to you a changed woman: I’ve seen the error of my ways and realised that when a facility closes, it isn’t always bad news.
Over the last three months alone, Silex Solar announced 30 jobs would go at Australia’s only PV panel solar cells manufacturing facility, with production going to a third-party supplier; 72 workers were made redundant after Kresta moved its venetian blinds manufacturing to Asia; and Australian Envelopes entered administration, leaving its entire workforce – 300 employees – without jobs.
These stories grabbed headlines, and rightly so. It was like watching a car crash, as the saying goes. Yes, sometimes the news we provide isn’t good, but sometimes those black clouds have a silver lining – it isn’t all just bad press.
In reality, Silex Solar’s closure is actually part of a company restructure, which will see it focus on a new, high-performance solar cell. Kresta will now offer an expanded range of blinds, at cheaper prices. Australian Envelopes has been bought and renamed Envotec, and will expand its old operations to become significantly larger than ever before.
In each of these situations, workers lost jobs and the industry felt down-trodden. But when the companies re-enter the market with their smarter, leaner, more sustainable business plans, this will result in more jobs for Australians – not only in the newly-launched factories, but at the suppliers providing the machinery, IT systems, service, support and business consulting, export finance and logistics costs for the new ventures.
The majority of you reading this column are business-owners, directors, executives or staff responsible for your company’s finances. I’d say Manufacturers’ Monthly readers would understand better than anyone that cutting off the fat from your operations is just good business practice. Executives need to look after their shareholders, partners, investments and profits. Profits won’t come if the new product offerings aren’t at the heart of the new strategy, so consumers should benefit, too.
And yet, there is a stigma surrounding manufacturers that close their factories. Should they really be blamed for cutting costs? Off-shoring aside, many of these phoenixes rising from the ashes will be bigger, meaner operations, employing more workers – some with new, dedicated R&D facilities, and others with plans to use their expertise to tap into new markets.
In the case of off-shoring, manufacturers shouldn’t be cast aside as ‘un-Australian’ or ‘short-sighted’. As a regular reader of ours said recently: "It is not done because of a rising dollar or any other excuse. It is done so that they can make a bigger profit. Nothing wrong with that, just don’t try and cloak it with some other excuse."
Agreed. Yes, off-shoring is horrible news for working families and our economy. I’ve written about this topic enough to know that this can have a harrowing impact on the industry.
However, if the owner of an Australian manufacturing company looks at the books and realises there is no other option than making the tough decision to outsource production, does the media really have the right to name and shame them?
I think I can safely say that our readers always do their best by our industry – and if that’s true, then it’s all good news to me.