How to stop major employers closing down
Friday, 27 March 2026
Martin van Beynen is a Press journalist and regular opinion contributor.
OPINION: Another day, another closure.
The story is all too familiar. A factory or plant owned by a global concern decides to consolidate and the operation, sometimes central to a New Zealand town’s livelihood, is closed.
Heartache all round. Jobs are lost, businesses servicing the operation are placed in jeopardy and suppliers are left looking for other customers. The impact is felt throughout the community. The dangers of being at the mercy of decisions made overseas are highlighted.
One of the latest examples is food company Heinz Wattie’s, owned since 1992 by the multinational Kraft-Heinz of the United States, proposing to close three processing factories in Auckland, Christchurch and Dunedin and to cease packing frozens in Hastings. The closures are expected to shed 350 jobs. It’s not known what will happen to the buildings and equipment.
Then, just weeks after the Wattie’s announcement, another of the country’s vegetable processors, the Canadian-owned McCain Foods, announced it too was quitting one of its factories here, expecting to pull out of its Hastings site by the end of January next year. The number of jobs affected has not been revealed.
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Last year Nelson was hit when Sealord shut its coated fish processing factory, a joint venture between Japanese firm Nissui and Māori interests, with the loss of 79 jobs.
Then we go to Tokoroa where last year the Carter Holt Harvey plywood plant closed and also to Ohakune in 2024 when the Kariori Pulp Mill and associated Tangawai Sawmill shut. About 350 jobs were lost in the closure of the timber plants, owned by Japan’s Oji Holdings.
If we look further back we think of Cadbury closing its factory in Dunedin, James Hardie shutting its Penrose factory and Unilever calling it a day in Petone.
Companies closing large operations usually cite one or more of the five horsemen of the business apocalypse. High energy costs, multinational owners needing to consolidate, an inability to compete with cheap imports (such as plywood and Chinese peaches), a reduction or insecurity in raw material (such as sheep or asparagus), and high operating costs generally, namely labour, compliance and transport decisions.
Do we stand back and watch this happen? Sometimes this is the best response as a thriving economy is based on businesses remaining nimble. That means opening and closing and hiring and firing with minimal intervention. Far too many businesses stagger on when they should have cut their losses (and paid their PAYE and GST) before the inevitable collapse.
But some cases justify government stepping in. Identifying those cases is the tricky bit.
State agencies have traditionally been poor at picking winners and nothing appears to have changed.
For instance the Government’s regional development body Crown Regional Holdings reports that half of its $433 million loan book is considered at risk of - or is currently in - default.
Numerous factors come into play when looking at business viability and the national interest. The costs of welfare payments and community dislocation after the collapse of a major employer are just the start.
An important factor that seems the most neglected is whether the country needs to retain the capability provided by the major operation being shuttered.
Should New Zealand, for instance, retain the ability to make its own plywood, even if cheaper plywood can be obtained from overseas? And although the world doesn’t currently suffer from a shortage of beetroot or corn, that can change rapidly.
We have already seen some questionable decisions in this area. The Tiwai Point aluminium smelter owned by global mining giant Rio Tinto uses roughly the same electricity as 680,000 homes in New Zealand. That’s about one third of the entire South Island’s power demand.
The smelter is a large employer in Southland but energy users nationwide appear to be subsidising the operation. The same argument about employment could be made for most major closures.
The current fuel crisis caused by the ructions in the Middle East highlights the wisdom or otherwise of the government allowing the Marsden Point refinery operation, owned by a private company, to close in 2022.
We get most of our petrol from refineries in South Korea, which sources most of its crude oil from exporters relying on safe passage through the Gulf of Hormuz. By terminating our refining ability we reduce our options.
Once a capability is lost, it’s often hard to get back. As President Donald Trump has frequently pointed out, allowing China to become the workshop of the world has inherent dangers.
I have a suggestion. What we need is a ready reaction force of top business analysts from the private and public sector to move in as soon as a major employer signals it is considering closing. Such a trouble-shooting body should be charged with deciding if the business can be saved and whether it’s worth it in the national interest.
A more romantic solution resides in the possibility of workers and management coming together to nut out a survival plan and taking over the operation with or without government help.
This is probably expecting too much but my mind turns to the company that makes Heartland potato chips.
For many years the Bowan family had grown potatoes at their farm near Timaru to be processed at Washdyke by Bluebird. In 2009 PepsiCo bought Bluebird and closed the Washdyke factory, leaving workers out of jobs and the Bowans looking for alternative buyers.
The Bowans bought the factory, changed the manufacturing process and Heartland Chips was officially launched in 2012. Working with former Bluebird sales rep Brian Kirby, the family focused on quality.
This is a wonderful story unlikely to be repeated in many places. But it shows what a can-do, give-it-a-go mentality can achieve and what we need more of.