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Two views were expressed in last Friday’s Otago Daily Times about Dunedin and its suitability for manufacturing exports. In the first, "Mr Cull said the planned closure of the Cadbury factory was another reminder Dunedin was ‘geographically poorly placed’ to manufacture for overseas markets. He did not blame Mondelez for putting profits first."
In the second, the Otago-Southland Employers Association chief executive, said this: "The high cost of manufacturing in Australia, along with a more regulated environment, meant the decision to close the Cadbury factory in Dunedin went against international trends.
Dunedin had a high quality local milk supply and a port with easy access to international markets, making the decision to move to a more regulated environment in Australia surprising."
The statements from these two city leaders are contradictory on several points, with the leading contradiction, highlighted in italics. One would suspect that when it comes to business conditions, the Employers Association chief executive would be better informed. The Mayor’s statement is therefore particularly disappointing. With statements like this, Mr Cull not only damns the local Cadbury’s operation, but every other company trying to make a crust in Dunedin by manufacturing and exporting. These are companies he should be helping, rather than out of town "fly-ins" who want to run events of highly dubious profitability at the Forsyth Barr Stadium. Most companies you speak to generally say Dunedin is an easier and cheaper town to operate in and export from than any other in this country, and certainly easier and cheaper than this country’s three biggest centres.
What Dunedin lacks is the job-hopping, iPhone-yakking, head-hunting merry-go-round many company executives/managers now consider to be essential to their professional progress in life.
Sadly, these managers appear to be right in this belief. For this reason, Dunedin is only likely to attract and retain companies that are very closely held and managed by individuals or families to whom such a merry-go-round is at best irrelevant. My suspicion is that eliminating the merry-go-round also increases the stability and quality of the management teams they would recruit in cities such as Dunedin.
If the importance of the managerial merry-go-round is eliminated, the advantages of Dunedin become more immediately apparent to individuals to whom the company’s and their own bottom line are inseparable.
Thus, what companies do in this town, manufacturing or otherwise, is of less relevance than who their owners are, and how they are managed.
Companies more reliant on overseas markets are more likely to be attracted to Dunedin than those relying on the North Island population centres.
A couple of years ago, I was talking to a senior marketing manager of one of our leading Auckland-based (inevitably) fast-moving-consumer-goods companies. In the conversation, the manager revealed the jaw-dropping statistic that, at 11 months tenure, she was the longest-serving manager in the company’s 20-plus-strong marketing department.
This situation might be extreme, but management turnover of about three years is apparently not atypical in the major centres. Such a situation can only lead to a state of ongoing pandemonium, memory loss to the company and memory leakage to its competitors that would surely be ripely exploitable by a more stable management team based in, say, Dunedin or Porirua. Perhaps that’s why Whittakers does so well, despite its lack of "global leverage"?
However, I return to Mr Cull’s comments.
With power comes responsibility, and this apparently "knee-jerk" comment inferring Dunedin’s blanket unsuitability for manufacturing and exporting in my view breaches that duty of responsibility, given that it is so global in its nature, comes from the highest official level within the city’s administration and seems to be in direct contradiction to more informed local business sources who could (and should) have been consulted before going public in such a damaging manner.
- Rob Hamlin is a senior lecturer in the marketing department at the University of Otago.