RATIONALISATION

Evening Post, Volume CXVI, Issue 23, 27 July 1933, Page 13

RATIONALISATION

WOOLLEN INDUSTRY

EXPERIENCE ELSEWHERE

SOME DISADVANTAGES

The contention that many of the statements which had been made in recent months in support of the rationalisation of the New Zealand woollen industry had been made for tire most part by ihose without a knowledge of the industry and the experience of other countries, was made by Mr. J. Evans in his statement to the Tariff Commission today on behalf of the New Zealand Woollen Mill Owners' Association. Ho said that the '' Textile Journal of Australia had written on this subject as follows: — 4 "One wonders why this talk about rationalising the wool industry as a whole should be persisted in with so many examples of their impotence to command the trade. The American Woollen Co. is a striking example of how a tremendous corporation has failed as badly or worse than others in U.S.A. The American Woollen Co. in 1928 suffered a net loss of 1,262,264 dollars, compared with a profit of 6,001,129 dollars in 1927. In the first six months of 1929 they reported a loss before depreciation of 1,520,801 dollars, and after depreciation of 2,499,159 dollars. During "tho year this company closed fourteen small and unprofitable mills. . The results shown by the American Woollen Co. are duplicated in many other directions whore rationalisation of the industry has been a/ttemptcd." <' OBVIOUS WEAKNESSES. '' Mr. Evans also;quoted a short article on the same subject from the "American Wool and Cotton Exporter":— "Great bankors and great merchants assure us that great consolidations are necessary in the textile industry, and that only in this way will come about the necessary economies in manufacturing and tho necessary efficiencies in merchandising. Perhaps mergers are needed; but there are obvious weaknesses to be considered in any such consolidations. A good organisation that has been built up over a long period of years could not make up for poorly led organisations in five or six or twenty mills that might be consolidated with it.' Invariably the successful mills are those in which there has been an unbroken continuity of good management and good merchandising over a long period of years. It would kill a rich mill to be consolidated with several mills that are doficient in working capital. It would destroy a wellmanaged mill to tie up with several poorly-managed neighbours. One wellequipped, profitable mill could not carry a lot of obsolete machinery in several other mills. The medicino of rationalisation has been prescribed so freely as tho cure for industrial'malaise, that there is a real danger of overestimating its immediate healing power. COMPETITION ELIMINATED. ■ "With rationalisation of this industry, i.e., each mill making one or two lines demanded by the requirements of the trade in. New Zealand, all competition would bo eliminated," said Mr. Evans. "Experience throughout the world has sliown, wo think, that big combinations in a diversified industry, such as ours, do not manufacture as cheaply as the .well-managed individual mill, and further are against the interests of the buying public. "Apart from the above, there aro many advantages in a mill manufacturing a variety of lines: (a) Tho economical use of all classes of wool sorted from the fleece. This 'wo aro compelled to do owing to tho fact that we have to buy our wool in bulk. (1>) The teaching of young wearers, machinists, darners, and others on such work as flannels, blankets, etc., so that they can eventually be trained in tho higher branches of the industry, (c) The position of the New Zealand mills in being able to adapt their plant to producing seasonal lines throughout the year, (d) The position held by the New Zealand mills owing to facilities they have, in being able to meet the ever changing fashions in both the textile and hosiery trades. The latter is a very important factor; and a very good instance of this is tho way in which most of the present mills have been able to utilise their plants in meeting the present demand for knitting wools. CAPRICE OF FASHION. "If tho ten mills at present operating in New Zealand were organised' to specialise in the making of certain lines there would be times when some of them would be closed down (and very often for long periods), and others would have more, work than they could handle. For instance, if worsted suitings were the fashion for men, the mills making woollen suitings would bo idle, and vice-versa. This applies to many branches of the woollen trade. "It might not be out of place to mention, apart from the fact that tho plant and machinery.in the New Zealand mills aro fully up to the standard of other woollen manufacturing countries, that our mill managers and foremen, in every branch of tho industry, are expert?. The majority of these men have either been brought out from some of the leading mills in Great Britain, or arc New Zealandors who have gone to England or Scotland with the express purpose of training themselves for the positions they arc now holding. BENEFIT TO PUBLIC. "The point we wish to make is, that under the individual mill system, prices to the New Zealand market are regulated by the mill which has bought on tho best terms, and therefore the consuming public get the benefit. Although we do not disparage all the arguments put forward for rationalisation of industry, we firmly believe that on the whole tho well-managed individual mill is in Hie best interests of the industry and the, buying public." .' .