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Factory industries

by Ian Hunter

Early New Zealand factories were started to supply settlers with the manufactured goods they needed in their new country, and most exports were agricultural products. By the 2000s around one third of exports were manufactured goods, and some New Zealand companies had factories overseas.


Factories before the 1880s

Factory industries have seen dramatic rises and falls in their contribution to New Zealand’s economic output and employment. The factory sector started in the 19th century with many small and medium-sized firms producing a range of goods demanded by the local population. It became a highly protected sector in the 1950s and 1960s, encouraging the development of bigger and bigger firms. After shrinking in the 1980s and early 1990s, the sector grew again, this time with an increasingly global outlook.

Early factory development

Because New Zealand is geographically isolated and its settlements were spread widely across the country, goods needed to be manufactured locally. A reasonably diverse manufacturing base was necessary – the colony could not continue to rely on imports.

Factories were needed to process natural materials – wood and clay – into construction materials for homes, and commercial and industrial buildings. As New Zealand’s settler population (excluding Māori) grew from 137,000 in 1861 to 256,000 in 1871, there was also a pressing need for manufactured foods and beverages. Baked goods, flour, cordial, aerated water (soft drinks), sugar and beer were all products in high demand.

1867 census of factories

The earliest record of the number and scale of New Zealand factories is the 1867 census of factories. Altogether, there were 406 manufacturing establishments. The largest were in sectors that reflected the stage the country’s economic development had reached, such as brick-and-tile works and woodworking factories.

Otago was the richest and most populous province, and its factories made beer (nine factories), bricks and tiles (eight), candles and soap (one), rope and cord (one), tanned hides and scoured wool (seven), processed flax (three) and flour (15), and made ironware and machinery (one). A large category grouped sawmills, sash and door makers together (11) – the same business often handled both milling and joinery.

The same kinds of factories were also found elsewhere in the colony, along with biscuit makers, coachbuilders, and beverage manufacturers.

Skills and equipment

Factories were often set up by immigrants using skills that they had acquired in their home countries. In the 1860s and 1870s provincial councils and central government offered bonuses to manufacturers to encourage the establishment of strategically important factory industries, such as sugar refining, paper production, cheese production for export and wool processing.

In some cases entrepreneurs brought machinery with them from overseas. In other cases they returned to Europe to purchase machinery and sometimes hire staff.

Public interest

 

The local community followed with interest the fortunes of the Mosgiel woollen mill. Detailed accounts of building and extensions, the shipping of new machinery, and the finding and then arrival of skilled staff from England were all reported in the local newspaper. The exact size and material used for buildings, the function of machinery and how many jobs it would create, the home towns and skills of new workers all became public knowledge.

 

Wool processing

The Mosgiel woollen mill was a successful example of a newly established factory. Founder A. J. Burns sailed to England to buy the necessary plant and machinery, and to hire staff. By October 1871 Burns had produced the first Mosgiel tweed and, with the demands of the factory growing, in 1873 the Mosgiel Woollen Factory Company was established. Burns set up a significant industrial enterprise, which by 1885 had electric lighting and shift work. This was a factory that made the transition from personal capital to industrial capital.

Factory work and conditions

In early factories skilled or semi-skilled workers controlled and carried out whole aspects of the manufacturing process, from start to finish. The breakdown of manufacturing into an assembly line controlled by managers – where each worker was responsible for only a small part of the process – would not become typical until the 20th century.

Prevention rather than cure

 

A law protecting women and children was prevention rather than cure, MP James Bradshaw told Parliament. It was needed because ‘love of money-making was as great here as elsewhere, and our morals no better than our neighbours’; and these evils, resulting from too close a worship of mammon, would be perpetuated if not stopped now before vested rights grew up.’1

 

Factories were often unheated, draughty and dirty. They were sometimes insanitary, unsafe and unhealthy. Despite this, factories were accepted as workplaces for men, but were not always regarded as safe or suitable places for women and child workers, who were seen as particularly vulnerable to exploitation.

Working conditions, hours of work, and payment for women and then children were regulated from 1873, but these provisions were seldom enforced. There were no factory inspectors. Police were responsible for checking on hours and conditions, but they usually had other, more pressing, problems.

Footnotes
    • Otago Witness, 22 August 1874, p. 8. Back

Factories, 1880 to 1900

Factories spread

By the late 1800s New Zealand had factories that made biscuits, coaches, saddlery and harnesses, furniture, clothing, textile bags, boots and shoes, rope and twine, sausage skins and violin strings, and which processed meat, dairy products, grain, flax, sugar and tobacco.

In some sectors, factories were the dominant workplace. But other kinds of workplaces continued to exist alongside. For example in the clothing sector factories and traditional tailoring and dressmaking businesses (known as the ‘bespoke’ sector) co-existed.

Agricultural processing factories, 1880s

The most dramatic rise in factory production in the later 19th century occurred in the processing of agricultural products. The development of refrigeration from 1882 created many small and medium-sized factories to process meat, and make butter and cheese for local sale and export. The number of dairy plants rose from 36 in 1885 to 247 in 1900. These small and medium-sized plants relied in turn on engineering firms and their factories to provide the necessary machinery.

Employment

By 1900 industries employing significant numbers included printing (3,134 workers), boot and shoe manufacturing (2,696 workers across 126 boot and shoe factories), clothing (2,512 workers across 21 factories) and meat preserving and freezing (2,221 workers across 34 works).

During the 1880s the public belief that factories meant poor work conditions and the exploitation of women and children strengthened. The ‘sweating evil’ – long hours of work, poor conditions and very poor wages – was linked particularly with the clothing industry, in which large numbers of women and girls were employed. A royal commission in 1890, which became known as the Sweating Commission, investigated factory labour practices. William Pember Reeves, minister of labour in the Liberal government, introduced the Factories acts of 1891 and 1894, which required all factories to be registered, and set up the Department of Labour and its factory inspection branch.

Factory girls

 

Anglican women set up the Girls Friendly Society in 1883 to be a ‘great boon and safeguard’ to the ‘hundreds of girls employed in boot and cloth factories’. 1 The society provided a social base and support for its members, but membership was never high. Many girls enjoyed the ‘attractions of factory life’ – its sociability and the independence it offered.

 

The new department’s inspections found New Zealand’s factories to be generally good, particularly the larger ones. Like the Sweating Commission, the inspectors found little evidence of exploitation of women and children. Where it was found, it was often in clothing factories.

By the end of the 19th century the department increasingly focused on the conditions in which men, the majority of factory employees, worked. Long hours of overtime, often unpaid, were the greatest concern.

Union organisation

Reeves also introduced the Industrial Conciliation and Arbitration Act 1894. The act made arbitration of disputes between employees and unions compulsory, and was intended to stimulate union membership. This act introduced conciliation boards, the Court of Arbitration and registration of trade unions. The act became the cornerstone of industrial relations in New Zealand until the 1980s.

Many skilled workers were increasingly concerned that the mechanisation associated with factories ‘diluted’ or reduced the skill needed to make items. Workers in some industries formed or joined unions, wanting to maintain some control over the work process. In industries such as clothing and boot-making, where factory and ‘bespoke’ sectors existed side by side, the factory workers unionised to a far greater extent than the bespoke workers.

Footnotes
    • Anne Else, ed, Women together: a history of women’s organisations in New Zealand: nga ropu wahine o te motu. Wellington: Historical Branch, Department of Internal Affairs, Daphne Brasell Associates, 1993, p. 129. Back

Gathering strength, 1900 to 1945

Going north

For much of the 19th century Otago had been the centre of industrial production, and was the chief province in both exports and imports. As the population increased and became more urban, the cities of Wellington and Auckland expanded. With substantial investment in buildings and machinery, and the main trunk railway completed in 1908, the North Island was well placed to see an expansion in factory production.

Food-processing factories contributed to the North Island’s growing industrial dominance. Dairying was expanding, and most dairy factories, along with nearly half the meat-processing plants, were in the North Island. Frimley’s, Hawke’s Bay’s first successful fruit cannery, was opened in 1904, followed by Wattie’s in 1934.

Car assembly plants were built from the 1920s, many of them in the Hutt Valley. W. D. & H. O. Wills’s factory began producing Three Castles cut tobacco and Capstan cigarettes, first in Wellington, then in Petone. In Auckland, Fisher & Paykel began manufacturing washing machines in 1939. By 1949 the firm was making 600 washing machines, 500 refrigerators and 700 vacuum cleaners a month.

Factory fun

 

Some factories were more than workplaces. Social halls complete with piano and library, sports teams, debating societies, weekly card evenings, concerts and annual picnics attended by whole families were part of the social life of large workplaces like Dunedin’s Hillside engineering works. The Hillside workshops’ picnic included a baby show judged by the local member of Parliament, tests of skill and strength with prizes donated by local businesses, and a band.

 

Factory work

Between 1900 and 1920 factory employment increased faster (157%) than the number of factories (100%). By 1920 factory workers had become 20% of the labour force. This trend continued, and by the 1950s factories employed approximately 27% of the labour force.

Within many factories the 19th century pattern of drawing supervisory staff from the factory floor continued. At Dunedin’s Hillside railway workshop, for example, the manager was always an ex-fitter, while the foremen in charge of each division were skilled in the relevant trade – a blacksmith, boilermaker or carpenter, as appropriate. Leading hands were the next level of authority down, and in a large factory like Hillside, they did most of the direct supervision. The leading hand would often be called by his first name, while those further up the hierarchy were addressed as ‘Mr’.

Accidents

From 1920 the number of factory accidents rose rapidly, well ahead of the increase in numbers of workers. From 1,218 in 1920 the number reached 4,938 in 1939, and then rose to 7,525 in 1948. Manufacturing processes, chemicals and machinery within factories had become more sophisticated and riskier, and inspections were fewer and less effective.

Electrification and the assembly line

Many factories were using electric power by 1920, replacing steam, water-wheel, coal, gas and horse power. Electricity allowed jobs to be broken into small steps that could be done by a semi-skilled or unskilled worker.

Once freezing works were electrified, the moving chain production line began to replace skilled solo butchers responsible for an entire carcass. The new ‘one man, one cut’ system allowed the employment of cheaper, unskilled workers and resulted in an increase in production in factories that introduced it.

A similar change had occurred in clothing factories. Making a shirt, for example, was broken down into 37 separate steps, each done by a different person. Skilled tailors, who knew the whole process, were replaced by semi-skilled workers able to do one or two parts of the job.

Many New Zealand factories adopted the assembly-line process later than their English or American equivalents. The cost of installing new machinery, resistance from skilled workers, or management not seeing it as a priority were all factors in this delay.

Diversification

Many firms diversified or changed tack in the 1930s and 1940s. The depression of the early 1930s, government policy, and the Second World War all encouraged this development.

Christchurch-based Scott Brothers switched from locomotive manufacture to domestic appliances. Between 1931 and 1957 the firm produced over 200,000 Atlas stoves to service the boom in appliance sales following the Second World War. Similarly, Mason and Porter (Masport), which was founded in 1910 and initially made milking machines, added lawn mowers to its range in the 1930s. During the Second World War, the company also made munitions.

Depression and recovery

With the onset of the 1930s economic depression, factory production in New Zealand fell substantially, as did factory employment (by around 20%). By the mid-1930s recovery was under way: manufacturing output grew by 14% in 1934/35.

In 1938 the government introduced controls on imports to protect New Zealand’s balance of payments. This had a direct impact on the style and type of factory production for the next 40 years. Initially intended as a temporary measure, the controls would remain in place until 1992.

Second World War

The Second World War resulted in rapid development of some factory industries. Clothing and engineering factories grew particularly fast, producing the uniforms, weapons and equipment needed for the war. Protected by war from competition from imported goods, other factory industries, particularly those deemed ‘essential’ and therefore able to retain staff, also grew.

The limited importing possible during the war, combined with import controls, resulted in factory production increasing by 4.5% per year, and the range of goods produced in New Zealand increased by one-third.

At the same time factory conditions deteriorated. Much-needed building work was delayed, new equipment could not be bought, and the pressure of work meant delaying unnecessary activity. So much needed to be done that the shortcomings in New Zealand’s factory sector would not be made up until the early 1950s.


Protecting factories, 1945 to the 1960s

Government protection

From the 1940s the government embarked on an intense programme of diversifying factory production, while providing protection for existing industries. Under this scheme, local factories that demonstrated they could produce particular goods in New Zealand were shielded from competition. Import licences or prohibitive customs duties limited the importing of overseas goods.

The momentum developed immediately before and during the war continued. Between 1950 and 1955, manufacturing output rose more than 30%. In 1930 there had been 5,047 factories in New Zealand employing 70,625 people; by 1957 this had increased to 8,488 factories employing 156,651 people.

Overseas firms

New industries were set up and overseas firms that wanted to maintain access to the New Zealand market began to make goods in New Zealand.

In 1946 international tyre manufacturer Dunlop opened factories in Upper Hutt and Christchurch. Within seven years the company would be one of the largest employers in New Zealand, with more than 700 staff at its two sites. US firm Firestone opened its first New Zealand factory in Christchurch in 1948, and by 1955 had produced one million tyres.

In 1951 English firm McKechnie Brothers started a brass and aluminium extrusion works at New Plymouth (prior to 1953 all aluminium was imported into New Zealand). Seeking to maintain its share of the New Zealand market, English paint manufacturer Lewis Berger established its first New Zealand factory in 1956.

Local firms

Production in locally owned factories developed in new directions, gathering steam as wartime restrictions were relaxed. Electronics company Tait began making two-way radios in 1949. Import protection kept out cheaper international products, and by the mid-1960s the Tait factory employed around 100 people. Following advances in synthetics, Clearlite Plastics and other manufacturers set up factories to make plastic products, including rainwear, signs and building products. The PDL factory, set up in 1947, made plastic, electrical and consumer goods.

In the 1950s and 1960s the annual reports of the Department of Trade and Industry noted the development of new factories producing new goods. Fork-lift trucks, water-jet engines, forage harvesters, Axminster carpets, wallpaper, aluminium sheet and foil, wood screws, glucose, dextrose, instant coffee and television tubes – each new product confirmed the vigour of the factory sector.

Employment

The 1950s and 1960s were the high point of labour-intensive manufacturing in New Zealand. The number of factories with more than 100 workers increased by 43% between 1951 and 1961. The Holeproof factory in Auckland, set up in 1938, had 1,000 staff employed in spinning, knitting, weaving and dying of nylon hosiery in the 1950s. In Hawke’s Bay, Wattie’s, which processed fruit and vegetables, demonstrated not only entrepreneurial flair, but was one of the fastest-growing companies in the 1960s.

Canned self-sufficiency

 

By the late 1950s Wattie’s had made New Zealand self-sufficient in canned foods. The company’s factories produced 88 varieties, including fruit, baked beans and pet food. Supplies were so abundant that the company became the world’s largest exporter of canned peas.

 

Factory expansion was slowed by an ongoing and severe shortage of labour. To deal with this, migration programmes brought in tens of thousands of first skilled and then unskilled workers. Businesses were encouraged by government to employ married women, who had historically been excluded from the workplace, and even pregnant women. Some factories became so desperate that shifts were arranged to fit in with the school day.

Location

There was an increasing concentration of manufacturing in the North Island, consistent with its greater population. By the 1960s more than 70% of factory employment was based there, of which 30% was in the Auckland area.


Inflation and deregulation, 1970s to 2000s

For nearly 35 years factory production had surged ahead in employment, scale and the range of goods offered. However, rising inflation, triggered by the 1973 and 1978 oil shocks (massive and sudden price rises), put severe strain on the protectionist model of economic development, which restricted imports, especially within the manufacturing sector.

With inflation pushing prices up, factory industries were hit by rising costs. While still protected by import controls, firms could pass some of these costs on to the consumer.

Deregulation

From 1984 import licensing was dismantled, subsidies removed, and tariffs progressively reduced. Many factory industries struggled to compete against lower-priced imported goods. In some cases, goods were produced in countries with significantly higher rates of mechanisation or automation in their factories, such as Japanese car plants. In others, such as the clothing and footwear industries, lower input costs and rates of pay were an advantage.

Domestic production of some goods, including cars and electrical appliances such as radios, televisions, and washing machines, was progressively wound down.

Competition was not the only problem factory industries faced in the 1980s and 1990s. An oversupply of processing capacity, and higher standards required by export destinations, led to the closure of many meat works. Among them were the Gear meat works in Petone (1981), AFFCO’s Southdown freezing works (1981), and works in Pātea (1982), Whakatū (1987), Tōmoana (1994) and others in Gisborne and Hawke’s Bay.

Factory employment

As a result of restructuring, which coincided with an economic downturn, many factories closed down, with resulting unemployment. The clothing, footwear and textile industry, for example, which had employed 47,961 people in 1976, dropped to 26,604 in 1992, and further to 16,058 in 2007. In small towns where one or two factories were the major employers there was significant loss of population, as people moved elsewhere to find work.

Death of a town

 

When Pātea’s freezing works closed ‘it was the death of the town’.1 The population dropped from 2,000 to 1,140, the school roll dropped from 400 to 250, the town’s three doctors, one solicitor and two accountants left, and the 53-bed hospital and five banks closed. Job opportunities were very limited and in 1993, 11 years after the works’ closure, 61% of the population was on a benefit.

 

Export-led recovery

Exporting led a recovery in numbers of factories and people employed within them. Diversification of both the goods produced and the markets to which they were exported took place in response to trade liberalisation. Much of this diversification was in non-agricultural industries.

By 1995, 25% of New Zealand manufactured products were exported, up from less than 20% in 1980. In the 1980s, prior to deregulation, meat and dairy products were the largest categories of New Zealand factory produce exported. By 1995 meat, wool and dairy accounted for only 38% of exported product in comparison with 84% in 1960. This trend continued – in 2008, meat, dairy and wool were 35.8% of exports. Plastics, organic chemicals, paper and paper products, electrical and electronic goods and machinery all showed substantial growth from 1991 to 1996.

Overseas ownership

In the shift from a highly protected environment to a deregulated market, some firms were bought by overseas owners. Wattie’s was sold to Heinz, DB Breweries to Dutch conglomerate Heineken and specialised saw-blade manufacturer Izard to the US-based Irwin Industrial Tool Company. These firms have pointed to gains from such a transition, including improvement to operating procedures and access to international management expertise and markets, though it has meant profits have been gone to overseas owners.

Emerging trend

An emerging trend in the 2000s was a new model of factory management that combined efficient production processes with both local and overseas factory ownership. Furniture and mattress makers Sleepyhead and Criterion Furniture, and electronics firms PDL and Tait Electronics all had operations both in New Zealand and overseas.

With increasing international operations, the number of employees in New Zealand factories alone no longer reflects the nature of contemporary New Zealand factory industries.

Footnotes
    • Quoted in Mick Calder and Janet Tyson, Meat acts: the New Zealand meat industry, 1972–1997. Wellington: Meat New Zealand, 1999, p. 191. Back

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How to cite this page: Ian Hunter, 'Factory industries', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/factory-industries/print (accessed 21 August 2017)

Story by Ian Hunter, published 11 Mar 2010