Firms threaten to quit NZ over high dollar

CWF Hamilton chief Keith Whiteley (left, with fellow submitter David Bennett of Pacific Helmets) yesterday told the parliamentary inquiry that the exchange rate had to become part of the policy mix. Photo / Mark Mitchell
CWF Hamilton chief Keith Whiteley (left, with fellow submitter David Bennett of Pacific Helmets) yesterday told the parliamentary inquiry that the exchange rate had to become part of the policy mix. Photo / Mark Mitchell
More leading export companies are on the verge of moving overseas due to the high dollar, Opposition MPs were told yesterday by manufacturers, who challenged the Government to do more to control the exchange rate.

Labour, the Greens, New Zealand First and Mana were holding the first of a series of hearings into what they say is the crisis in manufacturing.

MPs heard from business and union leaders as well as the chief executives of several leading export companies.

All said the exchange rate was their biggest headache and most warned they were considering moving overseas to stay in business.

David Bennett, managing director of Pacific Helmets, which manufactures helmets for fire services and other specialist applications, said his company wanted to stay in Wanganui, where it began in the 1970s, "but things are against us".

In 2001, a helmet selling for US$100 would generate $250 for the company; today the same helmet cost the same to manufacture but was generating just $127, Mr Bennett said.

Even at the average exchange rate over the last 10 years the return on the helmet would have been about $140 to $150.

Today's exchange rate meant a loss of about $27, Mr Bennett told MPs.

"Now you multiply that across tens of thousands of helmets and then across lots of companies that sell products overseas and that's the dollars that we're missing out in the New Zealand economy."

Stewart Hyde, manufacturing manager of Wyma Engineering, which makes vegetable polishing and handling machinery, said his company was recognised internationally as producing state-of-the-art equipment.

But difficulties competing internationally with a high exchange rate had forced it to source about four-fifths of its componentry from overseas, mainly China.

That had cost about 40 local jobs. The company was now considering moving its final assembly overseas.

"The question I would pose is how much does the Government want us to stay in New Zealand?"

Economic Development Minister Steven Joyce yesterday said he didn't agree there was a crisis.

"Nobody is arguing that being a manufacturer isn't challenging - in my history in business every time in business is challenging - but going around and trying to talk down the New Zealand economy and talk about a crisis in manufacturing is not particularly helpful."

Hamilton Jets managing director Keith Whiteley said other countries were "moving away from the single policy setting and are using interest rates to control exchange rates. New Zealand has to start looking at those issues."

- Adam Bennett of the New Zealand Herald

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