Army contract to China

[vgp]

Army shifts $2m contract to China

A small-town clothing manufacturer has been dealt a blow on the eve of the Government's jobs summit after being told a $2 million contract to supply the army is shifting to China.


Levin's Swazi Apparel has made wet-weather gear for troops for the past three years, but the Defence Force says his contact will be cut by 93 per cent - more than $1.9 million - this year.

Swazi owner Davey Hughes said he had been told the work was going to China. He was "saddened and deeply disillusioned".

"For a small town like Levin, that is a big chunk of work to lose. As a New Zealander, I feel deeply betrayed. As an employer, I am lost for words to deliver my staff."

News of the contract cut comes a day before the much-heralded summit called by Prime Minister John Key to find ways to protect jobs as the recession deepens.

Mr Key said, through a spokesman, Kiwi companies should always get a "full and fair opportunity" to compete for government contracts, but departments were also bound by longstanding procurement policies.

These had to be in keeping with trade agreements which meant preference could not be given to Kiwi firms, and companies bidding for tenders could not be ruled out simply because they were foreign.

Defence Minister Wayne Mapp said concerns about cutting the Swazi contract had been raised with him and he had raised it with the Defence Force.

He said the issue was complicated because Swazi supplied the army through a contract the Defence Force had with a third party and which was not due to expire till June 2010.

Though the contract is brokered through Australia-based Yakka Apparel Solutions, a Defence Force spokesman confirmed last night it was up to Defence to sign it off. He could not confirm whether the Swazi contract would go to China.

Yakka workwear general manager David Lilburne said the company could not comment on work going to China as it was up to the Defence Force.

But Mr Hughes said the decision to allow his contract to go to China flew in the face of the objectives of the job summit, which aimed to build on initiatives to ease the economic slowdown, such as bringing forward infrastructure projects.

"I am aghast the Government can commit such an act with one hand, while on the other hold a job summit.

"Promising infrastructure spending is terrific, but the ladies who work here have long forgotten how to push wheelbarrows and pour hotmix."

He employs 70 people and is hoping to avoid staff cuts by taking innovative measures including selling directly to the public from his factory.

Mr Hughes said the Government should follow the lead of the United States, where Congress this week required the US Defence Department to buy 100 per cent US-made products deemed essential to military readiness.

www.stuff.co.nz/4860134a13.html

[phil]

It's not just the army, it's the whole NZDF.

Suffice to say we were quite impressed to get wet weather gear made by Swazi, as it's very well made to a very high standard.

[Dave Homewood]

Realistically what do they expect? This is exactly what was always going to happen after the last Government and big business pushed through that bloody free trade deal with China. So far it has been of very little benefit to NZ and great benefit to China. Now the new Government is looking at doing the same thing with India.

Mr Hughes said the Government should follow the lead of the United States, where Congress this week required the US Defence Department to buy 100 per cent US-made products deemed essential to military readiness.

Yeah, that would work. Is he going to fund setting up the industry in NZ that can build helicopters, aircraft and tanks? Not to mention all the other hardware needed. It's a very nice notion but sadly it won't happen. We should however be building our Navy ships here since we do have (or did have) capable shipyards and not leaving it to the cheapest, nastiest foreign bidder who does a half arsed job.

[30sqnatc]

[quote author=vgp board=army thread=8640 post=68284 time=1235584948
Mr Hughes said the Government should follow the lead of the United States, where Congress this week required the US Defence Department to buy 100 per cent US-made products deemed essential to military readiness.

www.stuff.co.nz/4860134a13.html
[/quote]

And the response to this was discussed in the recent issue of US Defense News which reported US defence industries reminded Congress that their direction was actually illegal under international trade laws which the US were signatories to and would potentially have a backlash with other countries refusing to buy defence products from the US.

Paul

[Dave Homewood]

Other countries not buying US weaponry, that'll stop a lot of wars. Good move.

[flyjoe180]

The NZDF should provide it's personnel with the best equipment possible. If that means a contract going overseas then so be it, if the product is better. But I personally do not think Chinese made wet weather clothing will ever be as good as a New Zealand product. Speaking, of course, as a consumer of raincoats and jackets over the years.

[30sqnatc]

I had an interesting discussion with someone in the know. Guess where British uniforms are made. You guessed it, China and the contract is a lot more than a $2M loss to the UK economy.

[flyjoe180]

Regardles, still disappointing considering the economic gloom and the National Government's talking up of supporting NZ business during the election campaign.

[caromeg]

NZDF has a very poor reputation with NZ Business/Industry. It undervalues it and takes it for granted with no long term commitment or vision. I can't see why people are surprised with this. You talk to anyone in major companies, the rep who has to deal with defence is often the chump who peeved someone off.

[phil82]

Caromeg says:"NZDF has a very poor reputation with NZ Business/Industry. It undervalues it and takes it for granted with no long term commitment or vision. I can't see why people are surprised with this. You talk to anyone in major companies, the rep who has to deal with defence is often the chump who peeved someone off".




On what statistical basis do you make that assumption? Are you intimately involved, or have detailed knowledge of every single purchase or contract made by Defence? How many "major" companies have you actually talked to?

[Dave Homewood]

I do vaguely recall a big fuss some years back where the traditional contractor to Defence, Hills Hats, who made all the military hats for many decades, possibly forever, were dumped for a cheaper foreign brand, and Hills soon after nearly went bust. They have survived however.

[phil82]

Is the point being missed here? First; Defence is obliged to get the best possible price for everything it buys, from uniforms to toilet paper. Secondly; NZ has a Free Trade Agreement with China, ergo, as they are obliged to get the best possible deal, and as China is the cheapest, Defence are doing precisely what Government policy intends they should!

[philip]

Agreed - that is the logical rationale albeit a trifle short sighted.

ALso as I understand it - it is the supplier that is sourcing the product from China, not defence going direct.

My experience with buying Chinese on a commercial level is that the samples and initial shipment are of impecable quality. It's after that you have to be very wary.

Of course the fact that in 2 years time when the NZ tax take is down and unemployment up and the government will inevitably slash the defence budget even further plays no part in the decision. Just buy the next frigates from China. Or maybe even a carrier
www.bobhenneman.info/china.htm

[phil82]

Mar 16, 2009 11:01:57 GMT 12 philip said:

Agreed - that is the logical rationale albeit a trifle short sighted.

ALso as I understand it - it is the supplier that is sourcing the product from China, not defence going direct.

Correct. It is the main Defence contractor who has shifted supply to China, and not Defence itself, a fact the man with the long hair conveniently omitted!

[Dave Homewood]

Why doesn't Swazi move it's factory to China, get cheaper workers and bid for the contract? Everyone will be happy. Not.