May 30th 2020


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Articles from this issue:

COVER STORY Why success has eluded our automotive industry

EDITORIAL Will survival instincts drive new industry policies?

CANBERRA OBSERVED What's China's beef with our barley?

MANUFACTURING Reversing a bad trend

PUBLIC HEALTH Inquiries needed into major covid19 outbreaks

NATIONAL AFFAIRS ABS makes employment figures bend over backwards

NATIONAL AFFAIRS Green 'charities' continue to undermine development

NATIONAL AFFAIRS Royal commission denies Principle of fairness to Cardinal Pell

REFLECTION Woman is ... the answer to a question

ECONOMICS Breaking the shackles of deep globalisation

TRADE AND INDUSTRY Alarm bell is ringing loud on China's trade threats

ASIAN AFFAIRS Taiwan an island of sanity in a sea of contagion

COVID19 LOCKDOWN Should churches be the first to reopen?

HUMOUR Troubling sino-signs at batflu press conference

MUSIC Let's be thankful for small mercies: No Eurovision!

CINEMA Onward: Recovering the everyday magic

BOOK REVIEW KEEPING HANNAH ARENDT CURRENT AND ARENDT'S THESIS ON SAINT AUGUSTINE

BOOK REVIEW SKEWED VISION OF DEMOCRACY

POETRY

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MANUFACTURING
Reversing a bad trend


by Chris McCormack

News Weekly, May 30, 2020

 

  • Melbourne clothing maker diversifies to produce essential PPE
  • Government procurements total 15 per cent of GDP
  • “Buy Australian First” procurement policy would reinvigorate local manufacturing

Amid the economic Armageddon due to the covid19 lockdown, a ray of hope has emerged for one Australian manufacturer.

Fella Hamilton, named after its female founder in 1969, is a Melbourne-based clothing manufacturer. Initially a wholesaler to boutiques and department stores, it expanded in the 1980s to the 31 retail outlets today, selling exclusively its own-brand clothing.

Approximately half of its range is still made in Australia, while some products such as knitwear are produced offshore due to the high costs of labour here and the dearth of locally produced items such as studs for denim jackets.

“We’ve tried to resist that [going offshore] because we know our customers love Australian made,” co-owner David Hamilton said.

With the covid19 shutdown, Fella Hamilton (FH) shut all its retail outlets and was looking at standing all its employees down. Then friends in the medical field approached David Hamilton (Fella’s son, who now owns the business with his wife Sharon) asking if FH could produce scrubs and gowns (personal protective equipment, or PPE), which were in short supply.

What started out as a favour to friends spread through word of mouth and FH began fielding requests from other health providers. This has translated into FH producing thousands of the products.

GP clinics, dentists, a private Melbourne endoscopy hospital requiring water-resistant gowns, an aged-care facility in Perth and Cabrini Hospital in Melbourne have all placed orders, and other hospitals and aged-care facilities are considering buying FH products.

FH’s PPE garments are reusable for at least 20 washes, so they are more economically and environmentally sustainable than the imported disposable single-use items hospitals have been using.

FH created a Fella Healthcare section on its website, where doctors, nurses and dentists can order PPE online and even choose embroidery with company logos on the garments. Other practitioners are requesting tailor-made medical clothing for their specific needs.

The newfound production line has kept FH’s 40 odd factory employees employed, albeit under the JobSeeker program. FH did not need to do any retooling to diversify into producing PPE, simply liaising with clients and building up familiarity with the requirements of PPE.

FH’s stores are currently open by appointment only, while customers can continue to order from the website the standard clothing line as well as PPE.

For local businesses to survive here with our high labour costs, Mr Hamilton said that more people needed to “Buy Australian”. He mentioned the closure of the car and clothing industries here as evidence of the effect of withdrawing government support for Australian manufacturing. This, while foreign governments continue to subsidise their essential industries.

If our governments supported industry through grants similar to what were once known as “strategic investment programs”, which would lower business capital expenditure, the local product could be sold at a price comparable to the imported product, which would sustain and grow jobs and encourage new Australian manufacturing, he said. “What we want in this country is to build the industry here so we’re not reliant on anybody.”

A $9 million contract was awarded to Australian Defence Apparel in 2016 to source Australian Defence Force dress uniforms from China. In 2014, the Abbott government awarded a $6.3 million contract to replace the locally produced Holden Caprice Prime Ministerial car fleet with BMWs. Over time, reduction of subsidies to the automotive industry led to the exit of three locally built car manufacturers and the death of the industry in 2016-17.

FH is considering buying a machine that could produce 50,000 (N98+ equivalent) respirator facemasks per day. It has asked Federal Industry Minister Karen Andrews whether a government grant (combined with a “Buy Australian First” government procurement policy) would be possible so as to assist FH in making such a substantial investment.

Federal, state and local government procurements comprise around 15 per cent of Australian GDP. Federal Government procurements alone totalled around $65 billion in 2018-19.

The survival of domestic manufacturing requires subsidisation and/or the application of tariffs on selected imported products. Our higher-than-most cost of production ensures there is no level playing field in which local producers (and jobs) can survive without government intervention. With skyrocketing unemployment, the time is ripe for state and federal governments to adopt a “Buy Australian First” procurement policy.




























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