In Parliament: TYRE RETREADING

Otago Daily Times, Issue 27211, 14 October 1949, Page 7

In Parliament: TYRE RETREADING

FAIR DISTRIBUTION SOUGHT GOVERNMENT BUSINESS. PA WELLINGTON, Oct. 13. In the House of Representatives today, Mr C. R. Petrie (Govt., Otahuhu), on behalf of the Industries and Commerce Committee, reported oil the petition of Hawke’s Bay Tyre Rebuilders, Ltd., and 13 others (all of whom are 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 was that the petition be referred to the Government for reconsideration. State’s Investment

Mr C. M. Bowden (Oppn., Karori) said there were 63 retreading firms throughout New Zealand, and he could not understand why the Government should have put up £6OOO against £IOOO on the part of the proprietor in this case to develop a process of retreading or recapping which had not been proved and which, 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 having to pay royalties. Several agents had given up using the process in favour of the conventional method of recapping tyres. One estimate was that Government work would be worth £IOO,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 the Government business. Mr J. Mathison (Govt., Avon) said that while he thought the Government should call all parties together to see if agreement could be reached, he did not agree with the view that the Government should not have invested money in the company. It was well known that vested interests purchased the patent rights simply to prevent new processes from being put on the mar ket Mr Mathison said the Retreaders’ 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 the Government had not acted as it did in making finance available to the company, of which the inventor of the flex grip process was a director. Evidence had been given 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 and would probably be more economic in the long run. Mr Mathison said .he supported the committee’s recommendation and felt that efforts should be made to bring the parties together in the interests of the trade. “Unwarranted Gamble”

Mr D. M. Rae (Oppn., 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 actioh.

Mr R. Macdonald *(Govt., Ponsonby) said the evidence of the Retreaders’ Association before the committee had been inadequate and sometimes-mis-leading. The committee was told that Government departments were critical of the flex grip process, but further inquiry did not support that allegation. Mr Macdonald said, however, that he thought there was a case for appointing some additional agents of this process in order to reduce the cost of transporting tyres used by Government departments to the few centres where retreading by the flex grip process was now carried out.

Mr J. T. Watts (Oppn., St. Allans) said that not only had the Government invested six-sevenths of the capital in the company promoted by the inventor of the flex grip process, but the State Advances Corporation had advanced another £IOOO 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 had 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. Mr Nash said he would be glad to look further into the matter and he would be happy if the process were such as to warrant the redistribution of Government business on a wider basis. Mr Nash said that if members of the association were now prepared, as apparently they were, to use the flex grip process in order to obtain Government work he thought that agreement between the parties could be reached, but the Government ought not to be placed in the position of giving work to those whp were pledged not to have anything to do with the new system. He 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.” <•

Mr Petrie,-? summing up the discussion. 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 which had been evident in the past. The committee’s report was adopted.