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Recent key developments in MAKE│NZ
• For the next few editions, our GuessMasters® questions will relate to the operations or products of members of the MAKE│NZ Community. Unfortunately, that will mean employees of the company in question won’t be eligible to participate in that week.
Here is the first one:
A.W. Fraser are turning scrap metal into cash in a very sophisticated way. How much scrap metal (in weight) are A.W. Fraser using each week to make their bronze machined components?
For the answer to last week’s question, and our latest entry to the MAKE│NZ GuessMasters’ Honours Board, please go to the end of this newsletter.
• Last week was our first Production Managers Meeting for 2025, where we were kindly hosted by Natalie Smith and Lucien Thiele from Kiwicare. They spoke to us about their approaches to motivating their team, how they’ve kept them in focus, involved in processes, and helped grow them to be what the company needs, and what they can be. Kiwicare has grown quickly over the past few years and with that growth they’ve worked to keep their employees in mind. Clear and easy communication throughout all levels of their team is something they were especially proud of – their system for employees to put in requests for change having taken off in a big way. Natalie and Lucien were keen for those in attendance to see just how much goes in to making sure their team are engaged when they come to work; they were able to show us the ‘proof in the pudding’ in terms of positive impacts on productivity, but also the general atmosphere of their workplace. Certainly, everyone walked away with a few new ideas on how to work with their team and we can’t wait to visit again further down the line.
If you’d be interested in hosting a Production Managers Meeting, or you’d like someone in your team to attend, don’t hesitate to reach out to us.
• As most of you will be aware, we’ve been around in various guises for a while – since 1879, to be precise. Over that time, we’ve accumulated a lot of institutional knowledge. Some of it has been lost, and some has been retained – among other things in copies of books and other texts about manufacturing.
These texts help to keep us humble by reminding us that some of the things we are currently occupied with, and even some ‘current best practice’ insights have in fact been around for a while. Here’s an example:
Recent key developments in New Zealand
• Unfortunately, we have to report another victim of this government’s “shoot first, ask questions later” approach to policy making. A reminder of the previous episode: The decision to roll back (unwind) the previous government’s Reform of Vocational Education (RoVE) was made in December 2023. Now, 14 months later, we are still in consultation about the way work-based learning (apprenticeships) is to be organised, with an expectation that “… the legislative amendments needed to give effect to the structural changes that will occur throughout 2025 and 2026” [Cabinet Paper of 18 Dec. 2024]. In the meantime, we have a system that is largely dysfunctional operationally and is likely to continue to be so for at least another 12 to 18 months – a great way to achieve Economic Growth?
• And now, the government confirmed its decision to “disestablish Callaghan Innovation”. Callaghan Innovation’s funding instruments will be ‘lifted and shifted’ into the Research, Science and Innovation Group at MBIE – the R&D Tax Incentive [RDTI] and the following: Ārohia Innovation Trailblazer Grant; New to R&D Grant; Student Grants; Technology Incubator programme; Founder and Start-up Support Programme; Health Tech Activator (Cabinet Paper released on Jan. 23, 2025).
There is no indication of a sorely-needed review of these funding processes, some of which are painfully slow and cumbersome. Whether this will be addressed in the current statutory review of the RDTI scheme, which is quite unrelated to the changes introduced by the current government, remains unclear, too
• “All other of Callaghan Innovation’s innovation capability and advisory services to business will cease as the entity is disestablished.” – including the Better-by-Lean programme, by the way.
In relation to Callaghan Innovation’s R&D Solutions Group, which offered scientific and technical support for industry under it’s SOLVE brand, the Cabinet Paper recommends that:
- “(14) The Minister of Science, Innovation and Technology intends to progress an assessment of the science capabilities within the Research and Development Solutions Group of Callaghan Innovation to identify any high value capabilities that ought to be actively retained and transferred.
- (15) Authorise the Minister of Science, Innovation and Technology to make further decisions regarding any retention and transfer of capabilities within the Research and Development Solutions Group of Callaghan Innovation.”
There is just one minor catch with that – the question where any ‘capabilities’ the Minister deems worthy of “retaining and transferring” would go? The logical place would be the new Advanced Technology Public Research Organisation (PRO) – except that this organisation so far exists on paper only (…ask questions later), with no firm indication / timeline for its establishment. And the scientists and technicians the Minister might deem worthy of retaining will be out of a job on 1 July of this year – and if they’re any good, they should have any trouble finding a new job – if not here, then in Australia, for example …
We are going to approach Minister Collins’ office in this matter and would love to hear from anyone who has an existing Contract for Services with the R&D Solutions Group that they’d wish to continue with beyond June 30- dieter@makenz.org .
Recent key developments in the World
• This is not directly linked to manufacturing, but it may be of use at least for those of you dealing with customers in Europe in general, and Germany in particular. There has been plenty of news coverage around events at last week’s Munich Security Conference [MSC 2025], but to understand the full impact of these developments, a bit of background might help.
After the Second World War, the US decided to make (Western) Germany a key ‘Bulwark against Communism’ in its strategic competition with the Soviet Union. Under the European Recovery Program (Marshall Plan), between 1948 and 1951 the US government spent about 5.2% of its GDP to support rebuilding Europe’s war-torn nations, among them Germany:
The German population was grateful for the US support, and that feeling culminated in enthusiastic expressions of gratitude during the Berlin Blockade (1948-49), when, in response to the Soviet Union military blocking all land connects between West-Berlin and West Germany, the US essentially supplied the city by air. At the height of the campaign, one of these so-called ‘Raison Bombers’ landed every 45 seconds at Berlin Tempelhof Airport.
• Ever since that time, having strong ties with the US and depending on it for miliary protection was a constitutional element of German foreign policy, widely supported in the German population. In return, the US were ‘allowed’ to maintain a significant military presence in Germany – peaking at 400,000 troops in 1962. Today, the US still has close to 35,000 troops in 42 military installations in Germany and is conducting global military and intelligence operations from these installations without any German oversight.
Over the years, there have been ‘minor’ irritations in the relationship, as in the early 1980s, when the US stationed medium-range nuclear missiles in Germany against the express wish of a majority of the population – but with the ‘consent’ of the then German government. Or in 2013, when it became known that the US had been listening in on German Chancellor Angela Merkel’s phone calls for the past ten years.
But the first serious warning signs of the ‘unshakeable’ alliance between the US and Germany maybe not being as secure as had been assumed arose in 2017, when President Trump referred to NATO as ‘obsolete’ during his first presidency, questing the USA’s commitment to come to the defence of NATO members that, in his assessment, didn’t spend enough on defence themselves – Germany included. And not only did President Trump cast doubt on future military ties through NATO, he also started to impose tariffs on EU member states.
Come the Biden Presidency and the Russian invasion of Ukraine, and the German (and American) world view of their relationship reverted to “as strong as it has ever been” – the years of the Trump presidency to be forgotten as a short historical aberration, the sooner forgotten, the better. There was a resurgence of the influence of the ‘Transatlantiker’ – politicians who advocated for the continued strong alignment between Germany and the US – led by the Green’s Minister of Foreign Affairs, Anna Baerbock, and senior leaders of the conservatives, the CDU. The alignment occurred at all levels – politically, militarily (Germany is the second-biggest donor of military and financial aid to Ukraine) and, last but not least, economically. The US is Germany’s biggest export market by a significant margin, imports to the US from Germany rank roughly 4th-equal with Japan, and many Germany manufacturers have set up operations in the US. Moreover, after the disruption of natural gas supplies from the Russian Federation, LNG imports to Germany from the US grew from zero in 2021 to 205 Bcf in 2023, with a value of almost 27bn USD.
German politicians were aware of the ‘potential threats’ from another Trump presidency last year and, in an unprecedented move, senior German politicians interfered with US election campaign by strongly suggesting that President Biden should step aside in favour of Kamala Harris.
Whether they anticipated what happened over the past fortnight, is another question. The fact that President Trump picked up the phone to his Russian counterpart to discuss an end to the Ukraine war can’t have come as a surprise, but Vice-president JD Vance’s address at MSC 2025 certainly wasn’t expected. In it the Vice-President expressed his concerns that “the threat that I worry the most about vis-a-vis Europe is not Russia, it’s not China, it’s not any other external actor. And what I worry about is the threat from within, the retreat of Europe from some of its most fundamental values, values shared with the United States of America”. These comments were widely condemned as inappropriate and incorrect; the German Minister of Defence called them “unacceptable”– without actually trying to counter the evidence for his claim JD Vance referred to in his speech. And a review of the full text of the speech shows that there may well be an element of “The lady doth protest too much, methinks” (https://singjupost.com/full-transcript-vp-jd-vance-remarks-at-the-munich-security-conference/?singlepage=1 ).
To make matters worse was the announcement by the US special envoy to Ukraine, LtGen (ret.) Keith Kellogg, at MSC 2025 that representatives from European countries would not be involved in the Ukraine peace negotiations initiated by President Trump, or at least not directly. Mr Kellogg referred to the failed Minsk Agreement that also involved France and Germany in that context: “There were a lot of people at the table, but it didn’t work out. That’s why Europe will not be involved in the negotiations, but its interests will be taken into account.”
These events have shaken the views of German political leaders, or at least the vast majority of those claiming to occupy the ‘democratic middle ground’, to the core, with consequences as yet to fully play out. They have pulled the rug from underneath where these leader’s see Germany’s place in the community of nations – the USA’s staunchest ally in continental Europe at least. The immediate response was predictable: “More than ever, Europe’s nations must stand together now” … which presents its own challenges, considering the sympathy for President Trump’s expressed by Giorgia Meloni and Viktor Orbán, for example, and the rather chilly relationship that has existed between France and Germany for quite a while now. There was a hastily-arranged ‘informal meeting’ of some European leaders on Feb. 17 that ended without a formal declaration but revealed, among other things, a difference in stance between the UK and Germany in a key question.
Nothing could demonstrate the bafflement of the ‘Transatlantikers’ better than the fact that their foreign policy spokesperson for the conservatives in the EU parliament, Michael Gahler, when asked in a recent interview about the future of the relationship between European countries and the US, referred to the length of the remaining term of President Trump in office: “three years, eleven months and one week “ – with the implicit expectation that things will go back to ‘normal’ after that …
The Germans will go to the polls this weekend. It will be interesting to see whether these recent developments will have any influence on the outcome. There certainly are political parties outside of the self-declared ‘democratic centre’ that are uncomfortable with Germany’s strong ties with and dependence on the US.
• And the correct answer to last week’s question is –
17.4 c/KWh, or $174/MWh. The actual price in 1985 was 5.1 c/KWh, to be multiplied by a factor of 3.42 according to the RBNZ’s Inflation Calculator.
And the winner for last week’s GuessMasters® challenge is: Steve Lockhart, Manager- Manufacturing Engineering for Hamilton Jet – Congratulations!
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