It’s happened again: the equivalent of the whole adult population of some country towns is about to be sacked from a manufacturing company in Victoria, the sackingest state in Australia. This time it’s Kraft. Which makes, among other things, Vegemite. Hence the title. (Vegemite will still be produced in Victoria, while other products will be outsourced – a heartwarming show of support for our cultural icon, especially since it’ll soon be all these workers can afford to eat.)
Heather Ridout, the CEO of the Australian Industry Group, came out with one of her intriguing fudged statements, which I have always filed under “dead giveaway”:
NEAL WOOLRICH: The Chief Executive Officer of the Australian Industry Group Heather Ridout says Kraft’s decision is another sign of how difficult it is for Australian businesses to compete with low cost overseas rivals.
HEATHER RIDOUT: Part of this decision will be to become more capital intensive to get costs out of their business. And, you know, the fact is you can employ a worker in China for the cost of the workers compensation premium in Victoria.
And whilst it’s not the only consideration, you really do have to become more efficient. And that’s where Kraft is headed, as are other manufacturing companies….
….Kraft is committed to Australia. They want to be here for the long haul. They’ve been in Australia for approaching 100 years; I think it’s about 80 years. And they’re committed to staying here. But they can only stay here while they’re competitive here.
And what they’re trying to do is make the tough decisions that will guarantee their survival.
In other words, despite the lovely advertisements depicting the WorkChoices nirvana with smiling bosses and workers working it all out together to the satisfaction of all… it’s compete with the workers in China, Sunshine, and lose that onerous worker’s compensation, or the company’ll outsource your job.
So, remind me again of the logic behind Ms Ridout’s statements?
1. We want the economy to prosper because we live in a developed or “first world” country where we are able to earn a decent income (with important exceptions, of course.)
2. The economy can’t prosper unless we are competitive with developing or “third world” countries.
3. Therefore, if we get our wages and salaries down to a level comparable to those in the third world, the economy will really be prospering, which means that everybo…
For the record, the Cast Iron Balcony prefers Promite.