Blundstone Boots Did Well To Hold Out So Long

SO LONG and thanks for all the boots! Another week, another factory closure — this time round its the Blundstone boot factory in Hobart. From now on those brown boots proudly worn on every building site will be made in Asia and 300 Tassie shoemakers will have to do something else for a living. Its bad news for Australian industry, but is it all that bad?

To be honest, I never knew where Blundstone boots were made in the first place. Steve Gunn, managing director of Blundstone, says the location of the boot factory will not matter to the brand. And hes right.

Do you think a Mercedes these days is fully made in Germany or that a Swiss watch is fully put together in the shade of the Alps?

The Blundstone factory closure got lots of coverage in the media over recent days but the closure is hardly a surprise. The real news was that a factory making boots in Hobart since 1870 had somehow stayed open for at least a decade more than anyone might have guessed.

More than 40,000 jobs have been lost in the clothing industry over the past decade because it can be 10 times dearer to make low-tech goods here than in Asia.

Each time a factory closes, the cry goes up to save jobs — but do we really want more ill-fated factory jobs?

Industrial manufacturing has progressively moved to cheaper locations, first from the West to Hong Kong or Singapore. In the 1990s the show moved to Chinas special economic zones. Now its shifting into central China and places such as Thailand and India.

As China becomes more expensive, factories will move inevitably to Africa. Its not a game you really want to be in.

Maybe a better way to look at this is that were on the top of the tree, and our concentration on mining, financial services, agriculture and tourism is ideal — those industries are difficult to lure offshore.

Better still, these jobs offer good prospects and yes, two-thirds of new jobs require a university degree — but there are still one-third that dont.

The cheap labour of Asia, especially China, has created a new workshop of the world. The energy demands of those factories underpin our mining boom while the output of those factories provide the cheap TVs, videos and cameras we all enjoy. More importantly, they keep a lid on inflation, which means almost everyone is better off.

As for sentiment towards something being Australian made — dont waste your time. Who cares where your boots or your barbecue are made, as long as theyre cheap and good quality.

Whats more, industry always reinvents itself. In the same week that Blundstone closed, the head of the ResMed medical company said the group, which already employs 3000 people, could double in four years. Australias ResMed is one of the worlds biggest sleep technology companies: it manufactures a high-tech device for aiding sleep. It has made fortunes for investors on the stockmarket, it improves the lifestyle of millions of people and nobody really cares where it makes its products.

James Kirby is the editor of Eureka Report at www.eurekareport.com.au

jk@eurekareport.com.au

■More than 300 jobs will go offshore.

■Asian-made products are the cheapest in the world.

■Cheap imports actually keep Australian inflation in check.

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