Made in China
REPORTER: Rodney Lohse
BROADCAST DATE: May 25, 2006
While some worry about overseas workers coming into Australia, another looming concern is the businesses that are leaving.
Vegemite's owner, the US food giant Kraft, says it would never happen. But Dick Smith insists Vegemite could end up being made in China.
"The second they can save a few cents by making Vegemite in China, or Brazil or Indonesia, that's what they will do," Dick said.
Last week, Kraft closed down its Melbourne biscuit-making plant with the loss of 150 jobs, opting to set up operations in China.
But Kraft is not alone. Plenty of other Australian manufacturers have done the same.
Chris Spindler from the Australian Manufacturers Workers Union estimates China has stolen 50,000 jobs in the last 12 months, mostly from the auto components industry.
"If government policy remains the same ... I can't see any halt to the loss in the auto components industry and then possibly the car makers themselves," Mr Spindler said.
It is the fallout from free trade agreements and those most vulnerable are Australia's unskilled and semi-skilled workers.
Late last year, we reported that 460 workers at car parts manufacturer Silcraft had lost their jobs, just like the 1400 Holden workers who lost their jobs when it downsized.
Mitsubishi has had cut jobs to stay afloat and the flow-on effect has also cost jobs at parts suppliers.
Car parts makers Ion, Dana, Autoliv and Trico are among the companies to cut jobs. Already about half the components of so-called Australian made cars come from overseas.
Local manufacturers who have not already put off workers are taking stock, ready to cut jobs.
Chief economist with Austrade, Tim Harcourt, has just returned from China and says it is not all doom and gloom.
"I think for the most part we are competing on things that we are good at," Mr Harcourt said. "Particularly in design and highly-skilled industries."
"We are never going to be a large manufacturer like China or Germany, but we're finding that we are creating jobs and unemployment's been the lowest it's been in 30 years."
But not everyone is convinced. A major survey by the Australian Industry Group found the power of China was constantly on the agenda.
Sixty-eight per cent of manufacturers reported being affected by China, while 87 per cent saw China as a manufacturing threat.
Chinese imports were named as a threat by 55 per cent, while a further 32 per cent claimed china also threatened their export markets.
While most Australians say they prefer to buy Australian over imported goods, their shopping habits tell a different story. Shoppers often buy on price alone.
Look on the back of a Coles or Woolworths home brand pack: most likely it is imported, and most likely from China.
It is not uncommon to see local farmers unable to compete with imports, going broke and being forced off their property.
"I think we should get our politicians from China," Dick Smith said. "Because they'll be a lot cheaper, too."