Firestone waits on tariff issue

Press, 20 February 1987, Page 11

Firestone waits on tariff issue

Firestone New Zealand, Ltd, could not continue to reinvest profits in essential equipment until the Government had settled the tyre tariffs issue, the company’s annual meeting heard yesterday. The chairman, Mr R. L. Deal, said that the company’s greatest concern was that no tyre tariff level, if any, had been announced for 1989 onwards.

This was in spite of the original tyre industry plan recommending that this be settled in 1986, and after the recently announced progressive reduction in tariffs on tyres from 40 per cent to 25 per cent by 1989. In reply to a shareholder,s question, Mr Deal said that the company’s management had met with Government officials for six hours to deal with the tariff issue.

"Its kinda like swimming up Niagara Falls.

You get tired of it,” he said.

Firestone had spent more than $l3 million in the last five years buying and installing equipment to improve productivity and efficiency so that Firestone’s New Zealandmade tyres- could compete with imported products. Factory workers had agreed to a productivity deal to assist in ensuring that the company’s tyre factory survived, he said.

“But there are issues that Government must urgently resolve if a climate is to be created in whicb this company can make further reinvestments.” Firestone would continue making strong representations to Government, Mr Deal said.

Because the company’s modernisation programme was largely completed, and because the tariff uncertainty did not encourage' reinvestment, it was probable that Firestone’s cashflow would be

stronger. The directors hoped that this would reward shareholders as the benefits of thfe modernisation programme came to fruition.

The new financial year had started brightly. Sales of new tyres were 47 per cent ahead of last year, and 20 per cent ahead of the same period in 1985, he said.

Mr H. A. McMillan, a director and factory manager of . Firestone’s Papanui factory, said that the plant had set a production - record on Wednesday of 4021 tyres, compared with the daily average last year of 3100.

Mr Deal announced his retirement at the meeting, stating that he would be leaving the Firestone organisation at the end of the next month, and that he would be giving up the posts of chairman and managing director of the New Zealand companies at that time.