BRITISH TYREMAKERS PROTEST

Auckland Star, Volume LXXVI, Issue 146, 22 June 1945, Page 6

BRITISH TYREMAKERS PROTEST

DOMINION PROPOSAL

Fear Local Manufacturing Monopoly N.Z.P.A. Special Correspondent Rec. 2.30 p.m. LONDON, June 21. The belief that tne New Zealand Government will issue a license to one firm to manufacture motor tyres in the Dominion is causing grave concern among tyre manufacturing companies in Great Britain. They foresee that this will eventually mean the end of the trade with New Zealand and the granting of a virtual monopoly. A meeting has been held in London to discuss the position, at which were present executives of the John Bull Rubber Company, Ltd., the Michelin Tyre Company, Ltd., Henley's Tyre and Rubber Company, Ltd the North British Rubber Company, Ltd., and the Avon India Rubber Company, Ltd. In a memorandum they drew up in protest against the proposals of the New Zealand Government, they referred to dissatisfaction expressed in New Zealand at the quality of milking machine rubbers which had been produced in the Dominion under monopoly for the last five years. Mr. Nash's Assurance They recalled the assurance given by Mr. Nash in a White Paper of July, 1939, wherein it was stated it was not the intention of the New Zealand Government to employ the import licensing policy in order to give protection to local industry against the imports of United Kingdom goods, on a scale which prevented full opportunity of reasonable competition., It stated that since the signing of this agreement, a number of industries were believed to have been established in New Zealand not merely under the protection of a high tariff, but under the protection of a complete prohibition of imports. It expressed the opinion that the proposed manufacture of tyres in New Zealand would inevitably add another monopoly, preventing a "full opportunity of reasonable competition." The memorandum emphasises that the United Kingdom was the market for 82 per cent of New Zealand products in the last 26 years. N.Z. Tyre Importations It also states that in the three •vears immediately preceding the war New Zealand imported annually 420,729 tyre covers and 325,82.9 tubes, including tyres on imported vehicles, the local manufacture of which would occupy a small factory; and, on a basis of using natural rubber, only 400 employees would be needed, in addition to a small number of engineering and maintenance staff. It believed the amount of new employment provided would be appreciably reduced by the displacement of personnel normally engaged by the tyre importers. Regarding costs of production, under 10 per cent would represent wages, while the imported materials would be over 70 per cent and the remainder, about 18 per cent, would represent overheads. The local labour involved would, therefore, be small. 1 Freedom of Choice Question ilt also pointed out there- would be little saving of overseas funds as a result of orders not being placed in Britain, that users of tyres would have no freedom of choice, while it was certain that production costs in New Zealand would be higher than overseas. Both factors would be seriously detrimental to all classes of users and would be an added burden on New Zealand's future ability to compete in her export markets. It suggested there was insufficient justification for the considerable capital investment which would be involved in the whole undertaking.

Members of the tyre trade in Britain emphasise that their objection is not so much against local manufacture as against the ■ prospect of monopoly and loss of full opportunity of reasonable competition. If the New Zealand Government persists in its intention they urge a demand for public assurance that the market will not be closed to facilities for trading. This, they declare, is the only safeguard that users have against exploitation. . .