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Blundstone's boots move offshore -

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Blundstone's boots move offshore

Reporter: Matt Peacock

ALI MOORE: It's as Australian as RM Williams, but for the other famous boot company, Blundstone,
that's about to change. For the first time in its 137 year history, the Hobart based footwear group
is shifting its manufacturing operations to Asia, putting 300 workers out of a job. The
announcement has shocked and angered unions and the local community, however, the company claims
the move is no surprise and comes after a series of warnings about its inability to beat stiff
competition from cheap imports. The move offshore is despite millions of dollars of funding from
the Federal Government. Shortly I'll be speaking to the Federal Industry Minister Ian Macfarlane,
but first this report from Matt Peacock.

MATT PEACOCK: Blunnies, those Blundstone boots with the steel capped toes and elastic sides.
Popular Australian and Tasmanian icon until now.

STEVE GUNN, CHIEF EXECUTIVE, BLUNDSTONE AUSTRALIA: We are proudly Tasmanian, proudly Australian and
intend to stay that way.

MATT PEACOCK: But within months Blundstone will have sacked most of its Tasmanian workers and moved
to Asia, where cheaper labour will be making its boots.

STEVE GUNN: There will have to be some subtle changes. We certainly don't want to mislead people in
terms of where the product is made. However, this company is still Tasmanian. It is still
Australian. The heritage still exists. It is still going to be run from here and it is still going
to be an employer here.

TONY WOOLGAR, TEXTILE, CLOTHING AND FOOTWEAR UNION: They should be putting the new label on their
boots, you know, "Proudly made in India" or Indonesia, or wherever it is they decide to go.

MATT PEACOCK: Blundstone has been making its work boots here in Hobart for nearly a century and a
half. The Cuthbertston family who owns it fought hard to keep the industry alive during the tough
times of the 1970s. The market was flooding with cheap imports.

going to be immune from this general action which will take place across the whole spectrum of the
footwear industry.

STEVE GUNN: It is terribly difficult for them emotionally as well to see this day happen. It's not
something that any of us would like to see occur.

MATT PEACOCK: The company's CEO, Steve Gunn, says the decision was made to retrench the 300-plus
local workforce before Christmas, but he decided to tell them only yesterday.

STEVE GUNN: I think that it was a fair thing to do that. To spoil holidays - and the other is that
we would lose contact with people for such a period that it would create a whole heap of confusion
and difficulty.

TONY WOOLGAR: We are talking about people that have had 20 and 30 years service with the company,
that have got mortgages and went off at Christmas time thinking they had a job to come back to and
this is the news they get.

'CHRISTY': They would have known last year or something but they've never said to us, "Your jobs
are in danger."

'DOMINIC': A lot of people have families - I have got a family myself - and mortgages. A lot of
people are going to go downhill from it.

'TRACEY': Devastated. I just don't know how I feel, really. Just upset. Could have had a bit more
notice. If they had of told us on 15th December when they first found out, we wouldn't have got our

MATT PEACOCK: Ironically, it's the younger generations, X and Y, who've help shift the company's
jobs offshore. It's been the fashionable frills demanded on what was once a plain work boot but
have created the demand for a more labour intensive workforce.

STEVE GUNN: They are actively making buying decisions that sees footwear with different aesthetic
appeal, more features, more like sports shoes, if you like, although still work boots in terms of
function. Now, we're not able to do that in a high cost labour environment.

TONY WOOLGAR: Well, we're never going to be able to compete with labour costs and we shouldn't try,
because that's just going to be a drive to the bottom. Who can produce the products at the cheapest
labour cost? We shouldn't be attempting to do that, but we should just be a little bit smarter than
what we are in our manufacturing processes.

MATT PEACOCK: Tony Woolgar, the national secretary of the Textile, Clothing and Footwear Union,
blames the Federal Government for not protecting the industry more.

TONY WOOLGAR: Obviously, Government policy, as it is for the moment, for the TCF sector is not
working. If it was working we wouldn't see the number of job losses that we are seeing.

MATT PEACOCK: But Blundstone has received millions of dollars of Government assistance over the
years, all, it now appears, to no avail. That's something the company thinks is an easy thing to
say in hindsight.

STEVE GUNN: What we were trying to do is preserve local employment and a local operation in doing
so. It's since proven to be the case that that is not going to work for us, but we should be, I
think, given the credit for having tried.

MATT PEACOCK: Tried, but failed, and now the boot that's been worn on thousands of Australian
construction sites is even facing a building union ban, so great is the dismay about Blundstone's
move offshore.

ALI MOORE: That report from Matt Peacock

(c) 2007 ABC