US manufacturing entrepreneur Tim Leatherman has said that there’s no reason why manufacturing could not thrive in South Australia, and that the key to success was producing products of value, rather than low labour costs.
Talking to ABC Adelaide, Leatherman – the founder of the company of the same name, which produces multi-tools sold in over 70 countries – conceded that production staff at his Oregon factory make less than Australian workers. However, there would not be any reason why his business would succeed if it hypothetically produced in this country.
"Our average wage for a production worker would be more like $15 per hour," said Leatherman, whose Oregon-based company employs over 500 and made revenues of over $100 million last year. Leatherman the company was established in 1983.
He said that outsourcing to lower-cost countries could be a temptation, but quality production was harder to achieve.
"If you have clever people that are coming up with good products that have good features, that have a lot of value, then the cost of making them is not as high above other low cost countries as you would think, even when you are doing it in a country like this where the wages are pretty high," he said.