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….

Ben Kepes

Ben Kepes is a technology evangelist, an investor, a commentator and a business adviser. Ben covers the convergence of technology, mobile, ubiquity and agility, all enabled by the Cloud. His areas of interest extend to enterprise software, software integration, financial/accounting software, platforms and infrastructure as well as articulating technology simply for everyday users.

  • 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

    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.

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