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April 29, 1999atimes.com
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Oceania

Pacific Dunlop ditches Australian icons

MELBOURNE - The manufacture of Australian icon brandsBonds, Slazenger, Dunlop, Holeproof, Berlei and Tontine is tobe jettisoned by Pacific Dunlop under aplan which may cost 3,000 local workers their jobs.

In a frank assessment of Pacific Dunlop (PacDun) bymanaging director Rod Chadwick, it was announced these brandswould no longer be made by the company but ''outsourced toaccredited third parties."

While the PacDun chief said the near-abandonment of localmanufacturing after 100 years was ''a shame,'' it was no longersustainable for profitable growth.

Tyres and Ansell rubberware will be the only significantitems made by the group in Australia at the end of the restructuring.

''Just as an aside,'' Chadwick told guests of the AustralianSecurities Institute, ''condoms are less than 10 percent ofAnsell's business, but . . . account for 90 percent of the publicity."

A decade ago, PacDun made more than 90 percent of itsclothing brands, but this had fallen to 60 percent last yearand ''in three years' time, we expect that figure to be at leasthalved,'' he said.

''Quite frankly, we had to change or we risked the good valuewithin our company slowly drifting away over time,'' Chadwick said.''Obviously we were not going to let that happen."

PacDun is to be shaved to those ''growth businesses whichprovide and can sustain acceptable returns to shareholders,''he said. ''As a result we have shed, and will continue to shed thosebusinesses which do not meet . . . rigorous new yardsticks . . . or which we think will be better off in the hands of others."

The decision came ''regretfully'' because Australia was notable to compete with overseas manufacturers, he said.''In recent years the world trading environment has changeddramatically. The globalization of markets . . . makes itincreasingly more challenging for an economy of Australia'scomparitively small size to sustain a competitivemanufacturing industry.

''Personally I think this is a great shame because I am agreat supporter of what vibrant manufacturing businesses cando to employment and their local communities."

Chadwick said there were 6,000 employees affected by the decision, with half expected to lose their jobs under the restructuring.

Pacific Dunlop shares Tuesday slipped two cents to A$2.65.

(Asia Pulse)



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