DECISION ON MILL

Press, Volume CII, Issue 30287, 13 November 1963, Page 13

DECISION ON MILL

Mr Whitehead Critical

(From Our Own Reporter) NELSON. November 12. When the National Government chased Smith and Nephew out of New Zealand, the country not only lost the opportunity of establishing an industry that would absorb some of the vast young labour force and help the Dominion's economic progress, but also an extremely valuable rayon industry that the company believed could also be established, the Labour member of Parliament for Nelson (Mr S. A. V’hitehead) told an audience in Stoke. Mr Whitehead dealt at some length with the abandonment of the Nelson cotton mill and charged the Government with succumbing to political pressure to abandon the agreement from its “National Party friends.” “Let me remind you that Smith and Nephew was not the only firm interested in coming to New Zealand to start this industry,” he said. “There were seven worldwide firms interested in the venture, and I would say now that if this industry had decided to go to Auckland instead of Nelson, it would not have been chased out of New Zealand,” said Mr Whitehead. Labour Force

The firm was interested in the labour force in Nelson schools, and considered that by 1970 the mill would have a staff of 1500. The firm was even prepared to build its own technical schoolroom at the mill to train young technicians, he said. There had been much talk about the higher costs of cotton goods to be turned out by the company, said Mr Whitehead. “Do you know that since leaving New Zealand the company has established three other mills, and their costs are below those of Pakistan and Hong Hong?” he asked. “Do you know that we are importing cotton goods from South Australia, where the wage rates are 25 per cent, more than here?

“Smith and Nephew were not worried about labour costs. Today the work is done by machines, and the £sm they were going to spend was going into the most modern machine in the world, a machine that would, through its efficiency, keep the cost of the article down. It is not so much a question of wages today as of efficient machines, and the firm’s representatives told us when

they were here that the factory building in Nelson was one they had not expected to build until 1980,” said Mr Whitehead. “Crucified” “Before the last election we had no indication that the National Party was going to crucify this industry. The party supported it. Its candidates suppported it. All said they would honour the agreement to set up this industry. Mr Marshall said it was a matter of principle that he would not pay £lm compensation, but he paid £500.000. so where were his principles?” said Mr Whitehead. There had also been much talk about monopolies. “But Mr Marshall said there was no monopoly. When the company reached peak production in 1970 it was going to produce about £4m worth of goods. At that time, in 1961, we were importing a total of £2om worth of cotton goods, and the figure would be more like £3om today. “And Mr Marshall said that the 80 per cent, guarantee in the agreement was only in respect of a particular article agreed to by the Department of Industries and Commerce, and it had to comply in price and quality before that guarantee was given. And what is wrong with that, if we can produce an article at a comparable price and quality with that from overseas.”