Behind the scenes !

The full glare of the nation's media have been concentrated on the coming Holden plant closure in Australia, but behind the scenes another such announcement virtually passed without comment.   Breakfast cereal manufacturer Kellogs will close it's central coast Charmhaven plant in 2014 and transfer operations to Thailand.   This closure will result in the loss of a hundred jobs.

It seems that the death of Australian manufacturing is by way of a thousand cuts rather than any one huge amputation.   Unfortunately, sentiment has no place in the decision making process.   If a rival can present a competitive product cheaper because of lower manufacturing costs then it is likely that an Australian made brand will suffer a sales decrease.   Remaining competitive is the prime essential that resides on the shoulders of management.

Some choose another course to keep that bottom line healthy.  It seems that the ACCC is investigating a case of forming a cartel to stifle competitive pricing and extract an extra $ 146 million from retail customers.

Unilever, Cussons and Colgate Palmolive have confessed to fixing the price of washing powders in connivance with a major retail chain.   The three met together and agreed to a mutual change in the formulation of the powders they produced which should have resulted in savings passed on to retail buyers.

They entered into a " Gentlemen's agreement " not to change the price structure or advertise the fact that the composition had changed, thus maintaining the former retail prices and increasing their profit margin - something that is illegal under Australian law.

It is quite possible that the forming of this cartel will be defended on the grounds that it was an alternative to moving production offshore.  It could be argued that rigging the retail price is preferable to entering into a price of manufacturing fight which would involve labour costs - as this would be detrimental to maintaining production in Australia.

The wage structure comparison is not the entire picture.   The issue of productivity is the influencing factor that allows some high wage countries to compete effectively in the world market - and in this regard Germany comes to mind.

Australia has an intelligent, well educated work force quite capable of multi tasking.   It is hampered by working law restrictions and union opposition to change that prevents this reaching it's potential.  We urgently need to reassess the way we do things.   This is the twenty-first century and it can not abide by work practices that evolved back in the twentieth century - and in some cases - a century before that !

It is not a case of lowering wages.  It certainly is a case of increasing productivity by doing away with unnecessary restrictions and opening opportunities for workers to use their skills to maximum effect.  This slow job erosion will continue until we face reality and tune our workforce to the world we live in !