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Article from the Herald Sun News Paper

George Lekakis

October 06, 2005 12:00am

A PROMINENT figure in Melbourne's business community has lashed out at the Federal Government's push for a free trade agreement with China, claiming that it could destroy Victoria's struggling manufacturing sector.
Ian Campbell, the managing director of GUD Holdings � the maker of Sunbeam home appliances and Victa lawnmowers � warned that an FTA with China was a "big joke" that could cost thousands of Australians their jobs.

"I don't see where there's going to be any commercial benefit to Australia," Mr Campbell said.

"There is no protection at all for Australian industry from Chinese products coming in.

"What access are we going to have to Chinese markets that we don't have now?"

Australian steel makers have also raised concerns about the prospect of an FTA with China.

The Chinese steel industry is approaching self sufficiency and Australian steel makers are worried that domestic sales may come under threat when China boosts its steel exports in the next few years.

In 2003, BlueScope Steel claimed importers of carbon steel plates from China were dumping products in Australia at artificially reduced prices.

Free trade talks are continuing between the Australian and Chinese governments, with the second round of official negotiations held in Beijing in August.

According to a report published by the Department of Foreign Affairs and Trade, the August meeting included discussion of non-tariff barriers and industry assistance in the Chinese economy.

Mr Campbell said there was limited upside for Australia under a free trade arrangement with China.

"With a free trade agreement are they (the Chinese) going to give us an extra $100 a ton for coal? Of course they're not."

Mr Campbell said the Government should consider multilateral agreements with strategic trading partners rather than FTAs.

Since 1983 the contribution of the manufacturing industry to GDP has slid from 18 per cent to around 11 per cent as local companies, including GUD, have relocated operations to low-cost economies in Asia.

"Manufacturing has lost enormous ground," Mr Campbell said.

"Once you decommission that manufacturing capability and ship the jobs to China or elsewhere, you'll never put it back."

Since taking the helm of GUD, Mr Campbell has relocated production of the Sunbeam product range to Asia.

In the past year components for the revamped Victa business have been sourced from Chinese producers.

Mr Campbell said those decisions were necessary to maintain the competitiveness of the Sunbeam and Victa operations.

"My kids are probably going to grow up selling insurance to each other � I hate it but the economics are such that we cannot compete."

Hard to compete when Chineses workers are paid one tenth
what Oz workers receive, although in time {50 years?} this will alter like it did in the Japanese economy.

The service industry is about all school leavers can hope for in future years..?

Hi to All,
Are all our Aussie icons going to disappear to Asia?
This does not auger well for a bright manufacturing future does it!!
It would not be as bad if the products were well made; most outdoor equipment out of China is crap and seems to have planned obsolecence built in; so that if it goes wrong, just chuck it in the bin!!
And we in Oz just sit back and cop it!!

So endeth my "Soap-Box" moment!

I was having a similaer conversation with a mate the other night, buy a chinese mower and you can expect to throw it away within two years. Rebuild an old vc160 (or anything of that era) look after it and you could expect another trouble free 25 years.

That is the problem Joe ..factories can't make money or create employment when items last 25 years. The quick turn over of production is what a modern economy is all about.