Lichfield closong puts 77 off work

Press, 3 June 1989, Page 1

Lichfield closong puts 77 off work

By

CULLEN SMITH

Government deregulation and tariff cuts are blamed by Lichfield (N.Z.), Ltd, for a decision to close its Christchurch factory at the end of the month with the loss of 77 jobs.

Staff were told late yesterday that the 72-year-old Christchurchbased company would abandon domestic manufacturing and import all its clothing lines from June 30.

In a swipe at Government policies, Lichfield’s managing director, Mr John Rogers, said the move was the company’s response to deregulation in the clothing industry, removal of import licensing and the reduction of import duty.

“This is an economic decision which has become necessary as the deregulation process has taken effect,” Mr Rogers said. "Labour costs in New Zealand of $lO per hour, inclusive of bonuses, compare with labour costs in mainland China of $3O per month, and the availability of product from such low labour cost countries has made local manufacture uneconomic.” Lichfield’s domestic manufacturing had been reduced over recent years to shirts only in a business employing 77. This now accounted for only a small portion of Lichfield merchandise, most of which already came from a variety of SouthEast Asian and Pacific countries.

Imports from Fiji free of licence and duty signalled the future.

“By July, 1992, all import licensing will be removed and tariff protection will be reduced to a minimum,” Mr Rogers said. Lichfield management would work with union officials over the next few weeks in a job search programme to minimise the number who would be unemployed and to secure a redundancy agreement. The secretary of the Clothing Trades Union, Mr Hugh McCrory, said he was horrified by the announcement. The union received a letter at 2 p.m., notifying it of the company’s plan to tell staff later in the day. “Unfortunately this is exactly what we told the Government would happen with the deregulation of the clothing industry,” Mr McCrory said. "And now the chickens are coming home to roost.”

It was a fact of life that companies would move to import cheaper clothing from overseas, availing themselves of the cheap labour markets.

“The point that really bugs us is that we made this point repeatedly in our submissions to the Government,” Mr McCrory said. Many of the Lichfield staff had given long and loyal service to the company and were now being thrown out on the streets.

“I think it’s disgusting,” he said.

Lichfield had given the union the minimum four weeks notice of redundancies.

“We’ll need to negotiate. We’re not happy about the situation, but we need to secure the best deal for our members,” Mr McCrory said.

The Deputy Prime Minister, Mr Palmer — whose Christchurch Central electorate includes the Lichfield factory —

defended the Government’s deregulation policy. The clothing industry was one of the most heavily protected in the country. Even when the deregulation process was complete, it would still be favoured by a 40 per cent tariff. Mr Rogers' reference to Fiji was unfortunate. Trade with Fiji was heavily weighted in New Zealand’s favour, he said. Mr Palmer said there were also protection methods included in the freeing-up of trade with Australia. The clothing industry could not be regarded as unprotected.

"I’m very sorry people are going to lose their jobs. It’s always sad in situations such as these,” he said. The director of the Canterbury Manufacturers’ Association, Mr lan Howell, predicted a continuing loss of jobs in labour-inten-sive industries.

It was sad to see such a longestablished manufacturer as Lichfield forced to import all its production. “But obviously this is the only way Lichfield could survive under the Government import policies,” Mr Howell said. History, page 8