RETREADING OF TYRES

Press, Volume LXXXV, Issue 25934, 14 October 1949, Page 8

RETREADING OF TYRES

STATE INVESTMENT IN PROCESS OPPOSITION CRITICAL OF “ GAMBLE” (New Zealand Press Association.) WELLINGTON, October 13. The Government’s entry into the tyre retreading business was discussed jn the House of Representatives today when the Industries and Commerce Committee reported on the petition of Hawke’s Bay Tyre Rebuilders. Ltd., and 13 others (all members of the New Zealand Tyre Retreaders’ Association). Their petition, which was presented last year, asked that the retreading or recapping of Government tyres should not be confined solely to the Flex Grip process and that the method of calling for tenders for the work be reintroduced or, alternatively, that the work be fairly distributed among retreaders throughout New Zealand. The committee’s recommendation I was that the petition be referred to i the Government for reconsideration. Mr C. M. Eowden (Opposition, Karori) said there were 63 retreading firms throughout New Zealand and he could not understand why the Government should have put up £6OOO against £lOOO on the part of the proprietor in this case to develop a process of retreading or recapping that had not been proven and after a few weeks had been found to be unsatisfactory. The company into which the Government had paid £6OOO did not own the patent rights of the process and there was a likelihood of the Government’s having to pay royalties. Several agents had given up using the process in favour of the conventional method of recapping tyres. Reason for Investment Wanted Mr Bowden said one estimate was that Government wnrk would be worth £lOO.OOO and evidence had been given to the committee that the cost of the new process was not cheaper than the conventional process and that tenders had not been called for Government work.

Mr Bowden said he was satisfied that the full story of why the Government was induced to put up £6OOO had not been told to the committee and he considered that the Government should take steps to call the Retreaders’ Association into consultation to see if some scheme could not be devised in order that all firms could share in Government business.

Mr J. Mathison (Government. Avon) said that, while he thought the Gov ernment should call all the parties together to see if an agreement could be reached, he did not agree with the

view that the Government should not have invested money in the comoany It was veil known that vested interests purchased patent rights simply to prevent new processes being put on the market. Mr Mathison said the retreaders in the association did not object to the monopoly but to not being in it. He believed the new system had great possibilities which would have been lost if + he Government had not acted as it did in making finance available +o the comoanv. of which the inventor of the Flex Grip process was a direc-

Evidence had been that, although the cost of the new process had been to date somewhat higher than that of conventional retreading, it promised to be a more durable job ana would probably be more economic in the long run. Mr D. M. Rae (Opposition. Parnell» said the Government had subscribed the people’s money to this particular company before its new industrial process was proved. That was an unwarranted gamble. Many firms were threatened with the loss of some of their business through the Government’s action. Retreaders Criticised Mr R. Macdonald (Government. Ponsonby) said the evidence of the Retreaders’ Association before the committee had been inadequate and sometimes misleading. The committee was told that Government departments were critical of the Flex Grip process, but further inquiry did not support that allegation. He thought there was a case for appointing some additional agents of this process in order to reduce the cost of transporting the tyres used by Government departments to the few centres where retreading bv the Flc . Grip process was now done. Mr J. T. Watts (Opposition. Riccarton) said that in addition to the Government’s investment of six-sevenths of the capital of in the company promoted by the inventor of the Flex Grip process, the State Advances Corporation had advanced another £lOOO by way of debenture. The Minister of Finance (Mr Nash) said the new process was developed several years ago. Shortly after it became known that the Government had arranged for tyres used by State departments to be retreaded by this process he received a deputation from the Retreaders’ Association asking for a more equitable distribution of Government work, yet their association had already circularised its members asking them to have nothing to do with the Flex Grip process. He would be glad to look further into the matter and he would be happy if the process was such as to warrant redistribution of the Government business on a wider basis. Agreement Possible Mr Nash said that if members of the association were now prepared, as apparently they were, to use the Flex Grip process to obtain Government work, he thought an agreement between the parties could be reached, but the Government ought not to be placed in the position of giving work to those who were pledged not to have anything to do with the new system. Mr Nash said he would take the matter up with the directors of the company ‘‘on the basis of the Government’s interest in the company, to see what arrangements can be made.” The chairman of the committee. Mr C. R. Petrie (Government. Otahuhu) replying to the debate, said he saw no obstacle to a satisfactory agreement if the petitioners were now prepared to approach the matter in a co-operative attitude instead of with the hostility that had been evident in the past.

The committee’s report was adopted.